Following the launch of the TNFD Recommendations at the New York Stock Exchange in September 2023, TNFD embarked on a campaign to encourage financial institutions and businesses to start adopting the TNFD Recommendations.

Earlier in 2024 at the World Economic Forum meeting in Davos, over 320 companies and financial institutions from 46 countries committed to publishing TNFD-aligned disclosures in the next three years, demonstrating a commitment to start or continue their nature journeys. The Norwegian Government Pension Fund, NBIM, has published a pilot review as a first step towards their adoption of the TNFD disclosure framework.

The framework sets out disclosure recommendations and guidance on how organisations should manage and report on evolving nature-related dependencies, impacts, risks, and opportunities.

In total, the first cohort of TNFD Adopters included organisations from 46 countries in 5 continents. The global breadth of Early Adopters is an indicator for future uptake of the Recommendations. One-third of Early Adopters are financial institutions, with corporates representing over half of the total number and the remaining include market service providers, data providers, NGOs, and more. Eighty financial institutions and companies are registered from Japan — the largest share from a single country. Forty-nine Early Adopters are from the major EU economies and forty-six Early Adopters are from the UK. These countries have engaged strongly with TNFD, including through piloting, feedback, and Consultation Groups.

This positive move by market participants makes clear a trend we had already begun to observe since TNFD started its work two years ago; that companies and financial institutions are increasingly understanding the importance of nature to their businesses and are thinking about how to address both their dependencies and impacts on nature as well as the risk to their business or portfolio. In the case of Japan, it is further evidence of the commitment to halting and reversing the degradation of satoyama, and the need to map and restore nature to its legacy impact.

Climate and nature are largely acknowledged as inextricably linked, requiring integrated assessment, management, and disclosures. Increasingly, many organisations are now seeing nature as a core strategic risk management issue and no longer just a CSR issue — evidenced in the conversations we had with CEOs from across the globe in Davos. The reality is that there is nature risk sitting on balance sheets and cash flows today. Through the work of TNFD, SBTN and others, the tools to see and manage these issues are now available.

Among the 320 organisations that committed publicly to TNFD-aligned disclosures, Japan and Europe stand out as regions with a significant number of TNFD Early Adopters. In Europe, the Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), with which TNFD has strong alignment, have pushed companies to look closely at their interfaces with nature. CSRD and ESRS will also affect international companies with European footprints. The TNFD has collaborated with EFRAG, (the organisation that was tasked by the European Commission to develop the ESRS) to map the consistencies between the two. TNFD's LEAP approach can be used by companies to understand the impact materiality and financial materiality of their nature-related issues as required by the CSRD framework.

Over the past year, I have seen impressive uptake of the TNFD's work in Japan, through the work of the Japanese Consultation Group, led by the Keidanren Committee on Nature Conservation and TNFD Taskforce Members Makoto Haraguchi of MS&AD Insurance Holdings and Hirotaka Hideshima of Norinchukin Bank.

Japan has emerged as a leader for business and finance taking action on nature-related issues by committing to disclose aligned with the TNFD Recommendations, with some Japanese companies having piloted the LEAP approach and others beginning to report on some of the recommended disclosures. While challenges remain, for example in navigating the landscape of nature-related data, upskilling risk, finance, ESG and other internal teams, or uncertainty in the regulatory space, companies and financial institutions are already making meaningful progress by using the tools available in the TNFD's additional guidance and learning from peers in order to start on disclosures and increase ambition over time.

Japan, already a leader in the Asia Pacific region in terms of ESG reporting and investment, has the highest number of TNFD Early Adopters of any country. Japan and Europe are two of the regions most engaged with TNFD, with almost 15% of TNFD website traffic coming from Japan and 35% from Europe. This consistent engagement and commitment to start disclosing, reflects an acknowledgement of the risk posed by nature and biodiversity loss, and echoed in the World Economic Forum's Global Risk Report, where "Biodiversity loss and ecosystem collapse" rank in the top 10 global risks over the long-term. The TNFD Recommendations provide the tools and approaches to minimise the future risk from biodiversity loss and ecosystem collapse, helping organisations to translate data into decision-making that can lead to nature-positive outcomes and new opportunities.

TNFD is now focusing on three key priorities: raising awareness about the importance of corporate and financial institution action on nature loss and the recommendations of the TNFD; encouraging organisations to get started with assessment and disclosure; and working with a network of global partners to help build market capabilities though a range of education, training, and data initiatives. We continue to invite feedback on the draft sector guidance, draft sector disclosure metrics, and discussion papers on scenario analysis and biodiversity footprinting methodologies, while also continuing to create tools and resources for capacity-building, such as TNFD in a Box. Additionally, we expect to see the number of TNFD Adopters continue to grow, as more organisations across global markets and sectors indicate to us that they are working on assessing and disclosing their nature-related issues. Organisations can sign up whenever they are ready and will join a second cohort of Adopters to be announced at COP16 in Colombia later in 2024.