TNFD: The Nature-Related Financial Disclosures Framework India Must Prepare For

The Taskforce on Nature-related Financial Disclosures (TNFD) is the biodiversity equivalent of TCFD. Just as TCFD provides a framework for disclosing climate-related financial risks, TNFD provides a framework for disclosing nature-related risks and dependencies — the ways that business operations depend on, and impact, natural ecosystems. For Indian companies — many of which operate in sectors with significant land, water, and biodiversity dependencies — TNFD represents the next frontier of ESG disclosure.

Why Nature Risk Matters Financially

Half of the world's economic output — approximately $44 trillion — is moderately or highly dependent on nature. For Indian industries like agriculture, pharmaceuticals, food and beverage, chemicals, and construction, nature dependencies are not abstract: they include water availability from river systems, soil health for agricultural raw materials, pollination services for food crops, and the regulatory risk of operating in or near protected ecosystems. As biodiversity loss accelerates, the financial risk associated with nature degradation is becoming material enough that investors and lenders are beginning to require disclosure.

The LEAP Framework: How TNFD Works

TNFD uses a four-step assessment framework called LEAP: Locate your interface with nature (identify which of your operations and supply chains interact with which ecosystems), Evaluate dependencies and impacts (assess how your business depends on nature and how it impacts nature), Assess risks and opportunities (translate nature dependencies and impacts into financial risks and opportunities), and Prepare your disclosures (report your findings using the TNFD's recommended disclosures, which are structured around the same four pillars as TCFD). India's extraordinary biodiversity — it is one of 17 megadiverse countries — means that the nature risk landscape for Indian companies is both rich and complex.

How TNFD Connects to Biodiversity Credits and Afforestation

Companies that implement the TNFD framework often identify both their negative impacts on nature and opportunities to invest in nature restoration. Biodiversity credits — which represent verified improvements in ecosystem health and species abundance — are the emerging instrument for companies to demonstrate positive nature action. Afforestation projects, which Csquare develops and manages across India, simultaneously address carbon sequestration, biodiversity restoration, and water catchment services — creating assets that support both TCFD and TNFD disclosures. As institutional investors begin requiring TNFD-aligned disclosures, companies with proactive nature strategies will be better positioned.