Nature-related financial reporting is rapidly moving into the mainstream, but investors are struggling to translate assessments into portfolio decisions, according to the Taskforce on Nature-related Financial Disclosures (TNFD).
More than 1,000 organisations are now making some form of TNFD-aligned disclosure, roughly twice as many as a year ago, according to the TNFD’s 2026 status report, published yesterday during Climate Week NYC.
However, the report found that nature assessments and disclosures were informing stewardship and risk management but had yet to feed substantially into portfolio construction or capital allocation.
The number of organisations identified as producing TNFD-aligned disclosures rose from 542 to 1,154, while declared TNFD adopters reached 802. The adopters represented an estimated $26.6trn (€23.2trn) in assets under management.
Only 23% of investors that had conducted a LEAP assessment said it had informed capital-allocation decisions, while 10% said it had shaped portfolio construction. By comparison, 73% had applied the assessment to stewardship and 60% to risk management.
LEAP is the TNFD’s approach for identifying and assessing nature-related dependencies, impacts, risks and opportunities.
Investors increasingly regard nature loss as a source of physical, transition and systemic financial risk. However, inconsistent data, measurement methods and market-data coverage remain major obstacles.
The findings come as investors continue to scrutinise the ISSB’s proposed approach to nature-related reporting.
“All the providers have their own methodologies, their own metrics, and so it’s been very hard to define what success looks like,” said an unnamed Australian superannuation fund in a Morningstar survey cited in the report.
“What we would like to see is providers come together and develop an industry-wide standard of measurement,” it added.
David Craig and Razan Al-Mubarak, co-chairs of the TNFD, said: “The issue for policymakers and regulator consideration is not regulation per se, but the consistency of approach taken and its application.”
Investor concern
All surveyed investors expressed some concern about the effect of nature loss on financial markets, with 58% saying they were “very concerned” and 42% “somewhat concerned”.
Around 96% were concerned about the potential effects of nature loss on the financial performance of the funds they manage.
More than 90% of investor respondents supported the introduction of nature-related reporting standards within the next one to three years.
Launched in 2021, the TNFD is a market-led initiative that provides a framework for companies and financial institutions to assess and report their nature-related dependencies, impacts, risks and opportunities.
It published its final disclosure recommendations in September 2023 and has since worked with the IFRS Foundation to improve nature-related financial disclosures.
The report distinguishes between TNFD adopters, which have committed to TNFD-aligned reporting, and organisations identified as already publishing aligned disclosures.
