TNFD Explained: Nature-Related Disclosure for GCC Companies

Start from what you already know

If your team has done TCFD or IFRS S2 work, you already have most of the reporting architecture in your head. TNFD was built that way on purpose. The Taskforce on Nature-related Financial Disclosures published its final recommendations in September 2023, with 14 recommended disclosures grouped under the same four pillars the climate framework uses:

• Governance
• Strategy
• Risk and impact management
• Metrics and targets

There is one visible difference in the pillar names. Climate frameworks talk about risk management. TNFD says risk and impact management, and that extra word is not decorative. Climate reporting is largely concerned with how the outside world affects you. Nature reporting insists you also account for how you affect the outside world, in both directions, which is a genuinely different scope of question.

So the shape is familiar and the filing cabinet is the same. What goes inside it is not.

The difference that actually matters

Here is the thing that catches out every team arriving from climate.

Carbon aggregates. Nature does not.

A tonne of CO2 is equivalent wherever it is emitted, so you can add up twelve sites, publish one number, and that number means something. Nature has no equivalent unit. There is no tonne of biodiversity. A hectare of coastal habitat in Abu Dhabi is not fungible with a hectare elsewhere, even if the habitat type looks similar.

The consequences are practical and they land immediately:

Assessment is site by site. You cannot assess nature at group level and push it down. You have to start from locations.

The data problem is spatial, not financial. Climate inventories pull from finance, procurement and facilities systems. Nature assessment pulls from maps, designations, habitat data and field survey. Different data, different owners, often nobody currently responsible for it.

There is no single headline number. Treat any published one-figure biodiversity metric with suspicion. It has almost certainly discarded the thing that makes the assessment meaningful.

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There is no tonne of biodiversity. Everything difficult about nature disclosure follows from that one sentence.

LEAP, and what it is for

TNFD sets out an assessment process called LEAP: locate, evaluate, assess, prepare.

Locate your interface with nature. Where do you actually operate and source from, which biomes and ecosystems do those places sit in, and which of them are sensitive.

Evaluate your dependencies and impacts at those locations. Dependencies are what you rely on nature to provide. Impacts are what you do to it.

Assess the risks and opportunities that follow from those dependencies and impacts.

Prepare to respond and report.

Two things worth knowing about LEAP. First, it is a tool rather than a requirement. TNFD offers it as an internal process to help organisations get started; the recommendations are the 14 disclosures, not the method. Second, the L does most of the work. Locating your interface with nature is where the effort and the surprises are concentrated, and organisations that rush it produce assessments that fall apart later, because everything downstream inherits the location list.

Where it currently sits, and what that means in the GCC

TNFD is a voluntary framework. It is not law anywhere by virtue of being TNFD.

What gives it force is adoption by other people. Lenders and investors ask for alignment. Large customers ask about nature in supplier questionnaires. Sector guidance, including for financial institutions, gives those parties a common vocabulary to ask in. That is usually how these frameworks become effectively compulsory well before any regulator writes them down.

For GCC companies the practical position today is that the pressure is arriving through financing and through counterparties rather than through domestic regulation. That is worth stating plainly rather than implying a mandate that does not exist. It is also worth checking your own position rather than relying on a general statement in an article, because this area is moving and any dated summary ages quickly.

What is not in doubt is the project level picture. If your financing references the IFC Performance Standards, biodiversity obligations already apply through IFC Performance Standard 6, and those are contractual rather than voluntary.

What is worth preparing now

The honest answer is that some of this pays off regardless of what the framework does next, and some of it does not. Split them.

Worth doing now, because it pays off either way:

• The location inventory. A definitive list of where you operate, and for material supply chains, where you source from. Companies routinely discover this does not exist in one place. It is useful for insurance, permitting, tax and continuity planning quite apart from nature.
• A sensitivity screen against that list. What is designated, protected or known to be ecologically significant near each location. Public data gets you most of the way.
• Collecting the project assessments you already hold. Any company with a history of ESIA or lender-driven biodiversity work is sitting on baseline surveys and management plans in project folders. That is disclosure evidence nobody has connected to corporate reporting.

Can wait:

• Full dependency and impact valuation
• Target setting, which is premature before you know your locations
• Any attempt at a group-level metric

How this connects to work you are already doing

The overlap with existing obligations is larger than most teams expect.

Critical habitat assessment tells you which of your sites are ecologically sensitive, which is the locate step arriving from a different direction. Biodiversity baselines and adaptive management give you the metrics and the monitoring cycle. ESIA scoping already documents impact pathways. The mitigation hierarchy is your response strategy.

For banks and investors the exposure is the portfolio rather than the premises, which is closer to the framing in pricing nature risk in GCC portfolios and structurally similar to the financed emissions work many GCC banks have already done.

How ESGweise helps

We build nature disclosure from the bottom up, starting with the location inventory and the sensitivity screen, because that is the step that decides whether everything after it is sound. Where you already hold project assessments we connect them into the corporate picture rather than commissioning work twice.

We will also tell you when preparation is premature. For a company with no material site footprint, a full nature assessment is not a good use of budget this year, and we would rather say so.

See our nature and biodiversity and sustainability reporting services, and our work with banking and financial services.

If you want the plain-language ground floor first, start with what biodiversity actually is. For the offsetting question, see biodiversity credits.

Conclusion

TNFD gives nature the reporting architecture climate already had: 14 disclosures, four pillars, published September 2023, with LEAP offered as the assessment process. The structure will feel familiar. The substance will not, because nature is local, does not aggregate, and turns the exercise into a spatial problem rather than a rollup. It is voluntary, and it is arriving through lenders and counterparties rather than regulation, at least in the GCC today. The preparation worth starting now is the location inventory and the sensitivity screen, both of which earn their cost whatever the framework does next.

Sources: TNFD, TNFD LEAP approach, Kirkland & Ellis on the final framework