Understanding TCFD vs TNFD: Navigating Climate and Nature-Related Financial Disclosures for Australian Businesses

As climate change and biodiversity loss increasingly shape Australia’s economic and environmental landscape, transparency around environmental risks and impacts is becoming paramount for businesses. In this shifting framework, two global standards are guiding how Australian companies disclose their sustainability risks: the Taskforce on Climate-related Financial Disclosures (TCFD) and the Taskforce on Nature-related Financial Disclosures (TNFD). Although these frameworks share the goal of boosting accountability and informing investors, their distinctive focuses and approaches reflect critical challenges unique to Australia’s climate and natural heritage.

TCFD, introduced in 2015 by the Financial Stability Board, has become the foundation for climate-related financial reporting globally and is now embedded in many Australian regulatory and investor requirements. This framework helps Australian businesses assess and disclose climate-related governance, strategy, risk management, and metrics. It guides companies in recognising both physical climate impacts such as severe bushfires and droughts, as well as transitional risks from evolving policies, market shifts, and technology changes that affect bottom lines in Australia’s energy-intensive economy. Increasingly, Australian regulators and stakeholders are expecting TCFD-aligned disclosures to meet transparency and resilience standards.

The TNFD is a more recent initiative, launched in 2021, that responds to the critical need for businesses to account for risks and opportunities related to nature — Australia’s diverse ecosystems, unique biodiversity, water systems, and soils. For Australian companies, whose operations and supply chains often extend into ecologically sensitive and Indigenous lands, the TNFD provides a structure to understand and report on nature dependencies and impacts. Its LEAP approach encourages locating sensitive ecosystems, evaluating business dependencies, assessing the risks posed by biodiversity loss or environmental degradation, and preparing strategies to address those risks. For Australian businesses, this means integrating a nuanced, place-based understanding of nature’s value and vulnerabilities into corporate governance and reporting.

While the focus of TCFD remains climate-specific — emphasizing exposure to climate-related financial risks — TNFD broadens this scope to capture nature-related financial considerations that impact Australian businesses differently. Biodiversity loss, water scarcity, and ecosystem damage present tangible risks particularly relevant in contexts such as agriculture, mining, and manufacturing, sectors pivotal to Australia’s economy. Additionally, TNFD places strong emphasis on local stakeholder engagement, requiring companies in Australia to deepen relationships with Indigenous communities and environmental groups to address the socio-environmental realities of their operations. Where TCFD-based reporting often aggregates data at a global or organizational level, TNFD’s call for site-specific disclosures aligns closely with Australia’s landscape diversity and complex ecological jurisdictions.

Despite their differences, TCFD and TNFD are complementary frameworks. The climate and nature crises in Australia are intrinsically linked—bushfires, coral bleaching on the Great Barrier Reef, and habitat fragmentation all reflect this intertwined reality. For Australian businesses, using both frameworks together provides a more complete understanding of environmental risks and opportunities. This comprehensive outlook helps attract investment, manage risk more effectively, and build trust with consumers and regulators focused on genuine sustainability.

In 2025 and beyond, Australian companies face increasing regulatory expectations. The Australian government’s commitment to adopt and align with global sustainability reporting standards means that disclosures aligned with TCFD and, increasingly, TNFD will become part of regulatory and market norms. The emphasis on sustainability as a driver of resilience and value creation means Australian businesses must expand beyond climate risks alone to include nature-related considerations in their reporting and strategy.

Climate Logic supports Australian companies on this journey by translating these global frameworks into tailored, practical guidance. From carbon accounting to biodiversity impact management, stakeholder engagement with Indigenous and local communities, and ESG reporting aligned with regulatory standards, our consulting helps Australian businesses move beyond compliance and into strategic leadership.

By integrating TCFD and TNFD disclosures, Australian businesses can future-proof their sustainability reporting and governance, aligning with evolving international norms while respecting Australia’s unique environmental and cultural contexts. Together, these frameworks offer a pathway for Australian businesses to embrace holistic environmental stewardship that accounts for the full suite of climate and nature-related risks shaping their future.