(Our TNFD Journey Part 4)
In a world that feels more divided than ever, there’s one thing we all share—Nature. It’s not just for tree huggers; it’s the foundation of life and value for everyone and everything we rely on.
🌱 Nature sustains us—our economies, health, and the future of humanity depend on it.
🤝 It unites us—beyond borders, beliefs, and politics, we all need a thriving planet. We’ve yet to meet a ‘nature denier’.
💰 Investing in Nature makes sense—with just 1-2% of global assets under management ($711B-$1.3T a year), we can regenerate ecosystems and unlock both financial and environmental returns; generating >$10T in economic value and sustaining a home for our species.
Last week, COP16 negotiations officially concluded in Rome to resolve crucial pending decisions from biodiversity negotiations last year in Colombia. The successful results prove countries can work together amidst divisiveness and find common ground.
Countries agreed to boost biodiversity funding to $200 billion per year by 2030.
A resource mobilization strategy that identifies a broad range of instruments, mechanisms, and institutions (including public finance, private and philanthropic resources, banks, blended finance).
The adoption of a monitoring framework to assess progress toward the Biodiversity Plan's 23 targets and 4 goals (including protecting 30% of the planet’s land and water and restoring 30% of degraded ecosystems by 2030).
Common ground allows us to see Nature for what it is, a unifier and a value creator. And the Taskforce on Nature-related Financial Disclosures (TNFD) can help.
the Biodiversity Plan and the TNFD
The Biodiversity Plan (also known as the Global Biodiversity Framework) and the TNFD are closely connected in their shared goal of integrating nature and biodiversity considerations into financial and business decision-making.
The TNFD can unlock financing for biodiversity-friendly investments by providing standardized risk assessment and disclosure practices, making it easier for investors and businesses to contribute to the Biodiversity Plan and help mobilize the $200 billion per year for biodiversity by 2030.
As a TNFD Early Adopter, EcoAdvisors has been walking through each step of the LEAP approach (see recap below) to demonstrate how organizations can integrate biodiversity into decision-making (Target 14). In our TNFD Journey Part 3, we conducted a scoping exercise and zeroed in on the Locate and Evaluate phases of the LEAP process. In our TNFD Journey Part 4, we now focus on the Assess and Prepare phases to assess and disclose risks, dependencies and impacts on biodiversity (Target 15).
Due to the unique nature of EcoAdvisors’ business, we took two approaches to our LEAP assessment: (1) a consulting sector approach (where we look at the clients we engage and their sectors) and (2) a project sector approach (where we look at the sectors in which the projects we support operate).
The Locate and Evaluate phases identified our most material nature-related impacts and dependencies. In these phases, we learned that the most significant negative nature-related issues associated with our 2024 advisory projects included potential pollution from infrastructure holdings (solid waste, water, soil, air) from our clients’ buildings. Although this negative nature-related issue is beyond our direct manageable control, this exercise still provides a window on how organizations across sectors can also screen and assess activities and projects for unintended side effects.
We are now ready to Assess our nature-related risks and opportunities, and Prepare to respond and report our findings in our TNFD disclosures. We will also share how we believe this approach helps create long-term value for our business, our clients, and the planet.
ASSESS RISKS & OPPORTUNITIES
The Assess phase encourages us to identify and quantify our resulting nature-related risks and opportunities, as well as assess and adjust existing risk mitigation frameworks to adequately incorporate nature-related issues.
 | A1 Consulting Sector Approach Based off the Locate and Evaluate phase findings, the nature-related risks for the consulting sector approach include primarily transition risks (liability risks and changes in policies and/or international goals away from sustainability) and systemic risks (ecosystem and financial stability risks).
Project Sector Approach In addition to the transition and systemic risks listed above (which impact the ability of EcoAdvisors to fundamentally function), several physical risks emerge associated with the 2024 project portfolio’s key dependencies, such as risks associated with the loss of stabilization & erosion control, bioremediation, water-related ecosystem services, and climate regulation.
A2 Due to the sustainability-centred focus of EcoAdvisors’ work, our existing risk mitigation and opportunity management systems fundamentally integrate both nature-related risks and opportunities. For example, the use of due diligence checklists, our IMM Framework, and internal policies help ensure that the projects we engage in maximize positive outcomes while decreasing – or altogether avoiding – negative ones.
A3 & A4 Consulting Sector Approach The most material nature-related risks from the consulting sector approach include severe losses in ecosystem stability, shifts in financial stability and market focus away from sustainable initiatives, and shifts away from sustainability in policies and international goals. The greatest opportunities remain the same as EcoAdvisors’ current goals: to improve the management of nature in ways which benefit the economy, people, and the planet.
Project Sector Approach Most project-sector specific risks are relatively low materiality to EcoAdvisors’ and the projects’ functionality. Although the projects we support depend on ecosystem services, their relative intactness does not affect the existence of the projects. For example, when ecosystem services are present, the project goals (opportunities) are to preserve and protect them, and when they are lacking, projects seek to restore and improve them.
Outcomes EcoAdvisors’ largest nature-related risks pertain to societal, political and market shifts away from sustainability (reduces business) and irreversible ecosystem damage (reduces efficacy of projects supported). When adopting a project-specific lens, the nature-related risks are largely immaterial as reductions in ecosystem services either minimally impact the project or even bolster the need for the project. Lastly, recognition of and progress towards nature-related opportunities are fundamentally integrated into all of EcoAdvisors’ work. |
PREPARE TO RESPOND & REPORT
With our nature-related dependencies, impacts, risks and opportunities identified, assessed, and analyzed, we are ready to report on material issues in our TNFD disclosure.
 | P1 This step asks us to discuss, as an organization, the implications of the LEAP approach findings on our risk management, strategy, governance processes, and resource allocation. It also encourages us to consider the preferences of investors and stakeholders/ rightsholders, as well as consider government policies in place.
As a sustainability-centered company, EcoAdvisors already integrates nature-related impacts, dependencies, risks and opportunities into the fabric of our operations. This includes our structure, governance, risk management and resource allocation.
P2 EcoAdvisors has performance management systems in place: our Impact Measurement and Management (IMM) Framework is fully rooted in assessing and tracking nature-related impacts, and while it primarily focuses on tracking positive impacts, negative impacts are accounted for when they are identified. The IMM Framework assesses the cumulative impact of EcoAdvisors' work on (1) financial capital influenced towards sustainability, (2) land and water supported, (3) biodiversity supported, (4) impact influence on carbon, (5) livelihoods supported, and (6) people educated on sustainability. It is also directly aligned with our Theory of Change to ensure we stay on-track with our vision, as well as with key international sustainability frameworks and protocols (including the GBF, GHG Protocol, IRIS+, and TCFD).
IMM tracking occurs for every project, retrospectively and presently. Tracking timelines change depending on the nature of EcoAdvisors’ involvement, from the short-term to the long-term (entire project lifespans). Tracking is on-going as new projects are taken on, and all KPI will be updated annually for projects with on-going tracking.
P3 & P4 In P3 & P4, it is time to report on and disclose the information from the LEAP Assessment that enables users of general-purpose financial reports to understand the interplay between nature-related issues and EcoAdvisors’ strategy and decision-making processes. Key topics to cover include: how we plan to respond to our identified nature-related issues, how to track progress across reporting periods, stating trade-offs between nature-related issues, and meeting all TNFD general requirements.
Outcomes Stay tuned for our final TNFD report! |
creating long-term value
Once organizations understand their nature-related dependencies, impacts, risks and opportunities, they can carve out pathways to create long-term value through:
increased cost savings: taking action to avoid or reduce impacts and dependencies on nature can improve operational efficiencies, reducing capital expenditure and variable costs.
new revenue sources: identifying and capitalizing on new business opportunities that arise from a nature-positive approach, such as new markets for sustainable products.
enhanced brand reputation: retaining (and gaining) customers, employees, investors, and other stakeholders by demonstrating a commitment to sustainability and responsible business practices.
better access to financing for sustainable growth: strong nature-based impact performance can reduce the cost of financing, providing organizations better access to capital.
The TNFD's LEAP approach serves as a key tool for businesses and financial institutions to implement the GBF’s goals by integrating nature-related risks and opportunities into decision-making. As regulatory and investor pressure increases, aligning with TNFD will help organizations stay ahead while contributing to a global effort to protect and restore biodiversity.
The narrative around Nature as our greatest asset is gaining momentum. We feel that the opportunities for meaningful impact have never been greater. With the help of the TNFD, our focus remains clear: find common ground and see Nature for what it is, the unifier and value creator. Join us and help safeguard our future and unlock new financial and economic potential.
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