20/06/2024 - TNFD and EFRAG publish correspondence mapping

​As companies around the world are increasingly expected to disclose nature and biodiversity-related information, the correspondence table has been created to help companies understand the commonalities between ESRS and TNFD, through a detailed mapping of the disclosures and core metrics recommended by the TNFD and required under ESRS. This will also help European undertakings in scope of the Corporate Sustainability Reporting Directive (CSRD) that consider alignment with TNFD.

EFRAG and TNFD have collaborated closely for over two years to maximise the consistency of the ESRS environmental standards and the TNFD recommendations as they were being developed in parallel. The ESRS were issued as Delegated Act in July 2023 and the TNFD recommendations in September 2023. In December 2023, EFRAG and TNFD signed a Memorandum of Understanding (MoU), to continue this collaboration as both organisations look to respond to the assessment and reporting guidance needs of market participants subject to the CSRD reporting requirements.

The high level of correspondence between the ESRS environmental standards beyond climate change (E2-E5) and the TNFD recommendations and core metrics is reflected, among others, through the following:

Concepts and definitions: Both the TNFD and ESRS recommend the need to disclose nature-related impacts, risks and opportunities, including dependencies on nature to the extent that they generate material risks. 

Approach to materiality: The ESRS require disclosures to be based on a double materiality principle. The TNFD approach enables different approaches to materiality, including the double materiality approach required by the ESRS. 

The LEAP approach: The TNFD developed the LEAP approach for market participants to identify and assess their nature-related issues. The ESRS state that companies may conduct their materiality assessment on the sustainability matters of pollution, water, biodiversity and ecosystems, and circular economy (all ESRS environmental standards beyond climate change) using the LEAP approach. The LEAP approach has been designed to help reporting organisations identify both impact materiality (at the end of the 'Evaluate' phase of LEAP) and financial materiality (at the end of the 'Assess' phase of LEAP) providing a comprehensive approach for CSRD report preparers.

Reporting pillars: Both the TNFD recommended disclosures and the ESRS reporting areas are organised around the four disclosure pillars of the Task Force on Climate-related Financial Disclosures (TCFD): Governance, Strategy, Risk Management, and Metrics and Targets.

Recommended disclosures and metrics: All 14 disclosures recommended by the TNFD are reflected in the ESRS. The disclosures recommended by the TNFD and the ESRS requirements are both designed to provide relevant and faithful information on nature-related sustainability matters. There is also strong consistency between the TNFD core global disclosure metrics and the related metrics in the ESRS. 

EFRAG and the TNFD are committed to continue promoting nature-related transparency, providing much needed robust data for all stakeholders to foster sustainable development.  EFRAG and TNFD will work closely together on the development of upcoming guidance and tools to support disclosure of nature-related information.

Tony Goldner, Executive Director of TNFD, said:

"As market participants from over 45 countries have started to assess and report on their nature-related issues aligned with our recommendations, many have asked us for further guidance to ensure their reporting complies with their mandatory CSRD requirements. The assessment released today provides that additional clarity to market participants.

We have benefited from input from the EFRAG Secretariat in the development of the TNFD recommendations, and we are equally delighted that the ESRS recommend the use of the LEAP assessment process developed by the TNFD. 

We look forward to continuing to collaborate with the European Union in the development and sharing of practical guidance to ensure high-quality, consistent sustainability reporting disclosures."

Patrick de Cambourg, EFRAG SRB Chair, stated:

"Today's release of the correspondence mapping between the ESRS and the TNFD recommendations marks a significant milestone in advancing nature-related transparency in corporate reporting. The high level of commonality achieved between the ESRS and TNFD's disclosures underscores our shared commitment to fostering sustainable development and providing robust data for stakeholders.

As Chair of the EFRAG SRB, I am pleased to see the culmination of our collaborative efforts with TNFD in maximising consistency and providing clarity for market participants. This mapping will practically support preparers and other stakeholders to understand how to leverage on TNFD when reporting on ESRS and vice versa. Moving forward, EFRAG remains dedicated to supporting the implementation of nature-related disclosures and collaborating with TNFD to develop further guidance and tools for market participants."

Access the TNFD-ESRS correspondence mapping.

Download the press release.