Nature-Related Disclosure: LEAP, Natural Capital and the GBF

If your business depends on water, soil, pollinators or a stable climate, you already have nature-related risks and opportunities on your books. The question is whether you can see them, measure them and explain them to investors. That is what nature-related disclosure is for, and it is why the Taskforce on Nature-related Financial Disclosures (TNFD) exists. Its recommendations help organisations identify and disclose material nature-related dependencies, impacts, risks and opportunities across four pillars: governance, strategy, risk and impact management, and metrics and targets. If you are new to this, start with the companion guide TNFD Made Simple: A Practical Guide to Nature-related Disclosures.

Start with where you touch nature

The TNFD's practical assessment process is called LEAP: Locate your interfaces with nature, Evaluate your dependencies and impacts, Assess your nature-related risks and opportunities, and Prepare to respond and report on what is material. Location matters more than many teams expect. A factory in a water-stressed catchment faces different issues from one beside a protected mangrove. LEAP asks you to locate where your activities and value chains interface with nature, including potentially sensitive locations, so the assessment sits in its geographic context.

One important point: LEAP is optional. The TNFD describes it as an internal due-diligence approach, not a required method for making TNFD-recommended disclosures. Use it as a thinking tool, not a compliance checkbox.

Nature as natural capital: stocks and flows

Natural capital is the renewable and non-renewable natural resources — plants, animals, air, water, soils and minerals — that combine to provide benefits to people. Think of ecosystems and other environmental assets as stocks, and ecosystem services as the benefits flowing from them. A brewery depends on clean water and healthy soil; it impacts nature through abstraction, land use and emissions. Dependencies and impacts are distinct, and TNFD guidance links measurement to impact drivers, changes in the state of nature, and the resulting business or societal consequences.

When you value these dependencies and impacts, be explicit. TNFD points corporates to the Natural Capital Protocol and its valuation guidance. For valuers, that is a prompt to state the valuation object, perspective, scope, assumptions and intended use — not to treat a single "value of nature" as self-evident.

The policy backdrop: the Kunming-Montreal GBF

Adopted in December 2022, the Kunming-Montreal Global Biodiversity Framework (GBF) sets four goals for 2050 and 23 targets for 2030. Several targets speak directly to business and finance:

• Target 15 calls for measures to encourage and enable businesses and financial institutions to assess and disclose biodiversity-related risks, dependencies and impacts.
• Target 14 calls for integrating biodiversity's multiple values into policies and planning and progressively aligning public and private activities and financial flows with the framework.
• Target 2 calls for effective restoration of at least 30% of degraded terrestrial, inland-water, marine and coastal ecosystems.
• Target 3 calls for effective conservation and management of at least 30% of terrestrial and inland-water areas and marine and coastal areas.

You can read the full targets at the Convention on Biological Diversity and see how countries are translating them, for example through FAO's biodiversity pages.

Keep the frameworks distinct

For Hong Kong reporting teams, clarity matters. TNFD is a disclosure framework. LEAP is an optional assessment approach. The GBF is an intergovernmental framework whose targets are implemented by countries. This briefing does not establish current HKFRS/IFRS adoption dates or IVS-specific requirements, so check those against the relevant Hong Kong and standard-setting publications before you publish. If you want a plain-English walkthrough, the companion guide is a useful starting point: TNFD Made Simple.

Nature is not a side issue. It is the operating system your business runs on. Disclosing your relationship with it is simply good risk management.