TNFD research confirms financial materiality of nature-related risks

The TNFD, with Oxford's Environmental Change Institute and Global Canopy, released research confirming the financial materiality of nature-related risks from over 600 evidence pieces. The findings strengthen the case for Indian companies to integrate nature metrics into sustainability reporting and TNFD-aligned disclosures.

The Taskforce on Nature-related Financial Disclosures, with the University of Oxford's Environmental Change Institute and Global Canopy, released research affirming the financial materiality of nature-related risks. Published during London Climate Action Week, the report consolidates over 600 evidence pieces from 360 sources, including peer-reviewed studies, company reports, and stakeholder interviews. Alongside it, TNFD issued finalised sector-specific guidance for water utilities and joint business case studies developed with the Global Reporting Initiative, showing how corporates identify nature-related risks based on dependencies and impacts on ecosystems.

Corporates, financial institutions, water utilities, data providers, and regulators are most affected. The research finds nature degradation through biodiversity loss, ecosystem collapse, or resource scarcity can significantly affect corporate cash flows, access to capital, and insurance exposure, and warns of systemic risks to the global financial system. It notes a current lack of consistent nature risk assessment practices at company level, underlining a major gap in disclosure regimes, with cascading impacts on the insurance sector and asset valuation.

Companies preparing TNFD-aligned disclosures should use the report as a knowledge base and contribute to the accompanying database on nature-related financial risks, open to public consultation until 31 December 2025. TNFD argues integrated risk assessments, scenario planning, and better nature-linked datasets are critical to futureproofing business models. Stakeholders should monitor growing expectations that companies account for both impacts on nature and dependencies, as investors increasingly demand transparent ESG compliance and regulators craft biodiversity-related disclosure requirements.

Key figure — Database consultation deadline: 31 December 2025