akar.earthTNFD: Definition
What is TNFD? The Taskforce on Nature-related Financial Disclosures, its LEAP approach, and what it means for land and commodity companies in Indonesia.
TNFD (Taskforce on Nature-related Financial Disclosures) is a global initiative that published a framework for companies and financial institutions to identify, assess, manage and disclose their nature-related dependencies, impacts, risks and opportunities. Its recommendations, released in 2023, follow the structure of the earlier climate-focused TCFD.
Why it matters
Businesses depend on nature for water, soil, pollination and raw materials, and their operations affect ecosystems. TNFD gives investors and lenders a consistent way to see those links. Companies sourcing palm oil, pulp, rubber, cocoa or coffee are among the most exposed, because their supply chains drive land use change. Disclosing well can lower capital costs; ignoring nature risk can bring stranded assets and reputational damage.
How it works
- Four pillars: governance, strategy, risk and impact management, metrics and targets.
- LEAP approach: Locate interfaces with nature, Evaluate dependencies and impacts, Assess risks and opportunities, Prepare to respond and report.
- Metrics: core global and sector metrics, such as extent of land use change and pollution.
- Location specificity: analysis tied to actual sites and sourcing areas, not just company-level averages.
Indonesia and Southeast Asia angle
Indonesian plantation, forestry and mining groups, plus global buyers of Indonesian commodities, face clear TNFD exposures: deforestation, peat drainage and fire, water and biodiversity loss. Many already collect plot and concession data for certification, EUDR or carbon projects, which can feed the location-specific analysis TNFD asks for. Restoration and conservation, including projects that generate carbon or biodiversity credits, can be reported as nature-positive responses.
Data is the main gap for most companies. Location-specific analysis needs maps of where commodities come from, what ecosystems surround them and how land use is changing. Plot-level data collected for EUDR and carbon work can fill much of that gap.
Common mistakes
- Treating TNFD as a carbon report with a nature chapter.
- Using company averages instead of site-level data.
- Disclosing risks without a plan to address them.
Our biodiversity valuation service supports this work. More on the biodiversity hub.
Frequently asked questions
Is TNFD mandatory?
TNFD recommendations are voluntary, but some regulators and stock exchanges are referencing them, and they align with sustainability reporting standards. Check your jurisdiction's rules.
What is the LEAP approach?
LEAP stands for Locate, Evaluate, Assess and Prepare. It is TNFD's guidance for identifying where a business interfaces with nature, its dependencies and impacts, the risks and opportunities, and how to respond and report.