1. Higher expectations being placed on companies, regarding ESG performance

Maintaining success in sales, profits, stock price and other financial factors is increasingly related to ESG performance.  

This includes more consumers informing themselves on the ESG performance of the brands they buy – and don’t buy. Corporate customers also face greater pressures to build good sustainability practices into their own operations, as well as their supply chain. Financial sources, including banks and institutional investors, have higher expectations about ESG performance. And employees now ask probing questions about the ethics and values of potential employers. 

This means that businesses must focus on the systemic ESG-related risks they face and be aware of the benefits of shifting towards better environmental management. Compliance with standards such as TNFD are a big part of demonstrating due diligence to all parties that a company deals with. 

2. Compliance and alignment with other reporting frameworks 

ESG reporting is maturing, and policy and legislation are also being updated to include additional requirements for nature outcomes.  In 2024, there have been efforts to align updates to existing standards, such as the Global Reporting Initiative, with the TNFD framework which is increasingly being seen as best practice across the industry. The EU’s Corporate Sustainability Reporting Directive, ESRS 4, refers directly to the LEAP framework from the TNFD. 

Through complying with these other reporting standards and by digging deeper into your company records, you may find that you already have much of the data you need to determine your impacts for TNFD purposes. 

3. You don’t have to do it all at once

All of this takes time. It is a new journey for everyone, and this journey has already produced a wealth of how-to information. One useful resource is the TNFD getting-started guide WSP developed in partnership with the UN Global Compact Network Canada: TNFD Essentials: A Beginner’s Guide to Nature-Related Financial Disclosures

One of your first steps should be to engage with people across your business (procurement, finance, sustainability leads, executive leadership) to get buy-in and to identify existing data and knowledge. Then undertake a gap analysis, indicating areas that need improvement. Sometimes those improvements will be in how your company collects data relevant to the TNFD process. Others might be in relation to risk management or governance processes. 

4. Start with your impacts and dependencies on nature from direct operations

As ESG reporting becomes more integral, it’s essential to consider the broader impact of your business through the value chain. For those in the finance sector, this is particularly pertinent as the greatest nature-related risk is likely to occur within investment portfolios rather than direct operations. However, for corporations, starting with direct operations – the impacts and dependencies your company manages directly – can provide a solid foundation. These figures are generally more readily available and simpler to calculate, setting the stage for a comprehensive evaluation of your environmental, social, and governance contributions. 

Then, work on understanding impacts and dependencies in the value chain, such as your Tier 1 suppliers. This requires understanding the processes of third parties that you don’t control and exploring the potential risks associated with their operations. This requires asking your business partners about their impacts and dependencies from a TNFD perspective or using some basic scoping tools such as ENCORE. As ESG reporting matures, the accessibility of necessary data is expected to improve. We encourage considering collaborative approaches with your suppliers to ensure they can meet your data requirements for assessing value chain risks, fostering a partnership that evolves together and supports the transition of supply chains to a nature positive future. 

5. Get the professional help you need

One of the best sources of support for meeting TNFD requirements is professional firms in the environmental and sustainability management fields. WSP, for example, has professionals in many parts of the world and from a wide range of disciplines, able to provide support to companies meeting their TNFD requirements and building internal capacity. These include environmental subject matter experts but also ESG specialists, strategic and transformation advisory experts. 

Reach out to our team to start a conversation on how we may be able to help you gain a competitive edge through being an early adopter of the TNFD.