TNFD UK Consultation Group

Green Finance Institute / GFI Hive / Taskforce on Nature-related Financial Disclosures / TNFD and CSRD

TNFD and CSRD

 

How can UK companies report against CSRD and TNFD together?

The TNFD have provided detailed guidance on how to approach CSRD and TNFD together. Below is a summary of this guidance along with the relevant links.

The EU has approved mandatory reporting requirements through the Corporate Sustainability Reporting Directive (CSRD), with first reports required by 2025 for companies that meet at least two of the below criteria:

  • More than 250 employees;
  • A net turnover exceeding €40 million or
  • Total assets exceeding €20 million.

It is estimated that 80% of UK PLC is covered by the regulation. Companies outside the reporting net may also be asked for relevant information if they sell goods or services to those within. As a result, a large share of UK companies will be impacted by the regulation.

The European Sustainability Reporting Standards1 (ESRS), the core requirement of CSRD, cover all Environment, Social and Governance (ESG) elements and its nature component explicitly references the Taskforce on Nature-related Disclosures (TNFD) guidance. In order to demonstrate the alignment between both frameworks, TNFD and EFRAG (the technical body that advises the EU on CSRD design) have worked closely to produce a mapping between the TNFD recommendations and the ESRS (see Figure 1). This shows that:

  • All 14 TNFD recommended disclosures are reflected in the ESRS.
  • Both TNFD and ESRS recommend disclosure of nature-related dependencies, impacts, risks and opportunities, and their materiality to the reporting entity.
  • Both frameworks have a shared approach to assessing dependencies, impacts, risks and opportunities at the physical, transition and systemic level.
  • There is consistency between TNFD core global disclosure metrics and the related ESRS metrics.

Figure 1: TNFD and CSRD mapping

As a result, many companies are interested in

  1. using TNFD guidance to help meet their CSRD requirements, or
  2. demonstrating that their CSRD disclosures also meet TNFD requirements.

The TNFD supports the use of cross-reference tables in companies’ corporate reporting ‘to help simplify and streamline the presentation of TNFD-aligned recommended disclosures in existing voluntary or mandatory corporate reporting.’ This allows companies to demonstrate how a single disclosure meets both sets of requirements. Note this is supported but not required, and organisations may choose to publish separate reports, to suit their specific context and circumstances.

Figure 2 provides an example of what a cross-reference table looks like in practice from Orsted’s 2023 annual report.

Figure 2: Orsted example correspondence table in its 2023 annual report, Pg 140

The TNFD and Global Reporting Initiative (GRI) have also published correspondence mapping to allow companies to cross-reference in the same way.

If your company has published a TNFD-aligned report and would like it to be featured on the TNFD website, please submit it here.

1 European Sustainability Reporting Standards (ESRS) and CSRD are often used interchangeably. ESRS are the standards, which are part of the overall CSRD requirements.