TNFD, CSRD to Nurture Demand for Nature Data in 2025
Investors expected to rely on technology to handle increasing information flows, as IPBES underlines nature dependencies and urgent need for transformational change.
Demand for nature data and related solutions will accelerate in 2025, driven by industry initiatives and mandatory reporting requirements, set against a backdrop of increasing pressure on policymakers to accelerate nature-positive policy action.
According to pitch participants at ESG Investor’s 2024 Nature Data event, adoption of the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) and compliance with the EU’s Corporate Sustainability Reporting Directive (CSRD) will fuel appetite among investors.
“The growing prominence of the TNFD has sparked investor demand, especially for more nuanced data and guidance,” said Frederick Fabian, CEO of UK-based stewardship platform provider Root, which won the event’s pitch competition. “Suddenly there are a couple of dozen specific data points that investors want to see. The lack of granular data and the ability to make existing data actionable is a key issue.”
In 2025, the TNFD will step up its efforts to support the availability and robustness of decision-useful information over the course of 2025. The TNFD’s disclosure recommendations already have more than 500 adopters.
TNFD priorities for the next 12 months include the development of a long-mooted open access Nature Data Public Facility (NDPF). The facility is expected to establish a core foundation of high-quality data on an array of nature topics, such as biodiversity and land degradation, similarly to the Net Zero Data Public Utility for climate.
The utility is intended to help investors analyse their exposures to nature risks, dependencies and opportunities, and support governments in shaping more robust nature-focused policies.
A consultation to inform the NDPF’s development closes on 17 January. Earlier this month, businesses called on the UK government to outline a plan for mandatory adoption of TNFD’s reporting recommendations to help drive the development of a nature-positive economy.
Data and analytics provider GIST Impact’s CEO, Pavan Sukhdev, said he expects TNFD to contribute to the “quick establishment of best practice approaches”, noting also the importance of collaboration between standards setters, which is ensuring alignment of disclosure requirements, including between the EU’s CSRD and the TNFD’s guidelines.
According to a report released this week by the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES), US$13 trillion of the annual value of industries, accounting for 15% of global GDP, is highly dependent on nature, with a further US$31 trillion, representing 37% of global GDP, moderately dependent on nature.
The report, which outlined options for achieving the “transformational change” needed to halt biodiversity collapse, estimated at US$10 trillion the business opportunity value that could be generated by 2030, while also supporting 395 million jobs.
This year also saw the biodiversity-focused COP16 take place in Cali, Colombia. While incremental progress was made, it was largely limited by frictions between industrialised and developing nations largely centring on the size, sources and supporting structures of the funding needed to reverse biodiversity loss and nature degradation. Discussions over issues such as resource mobilisation and the Global Environment Facility, including its Global Biodiversity Framework Fund, are due to resume at a reconvened COP16 from 25-27 February 2025 in Rome, Italy.
The conference was also due to see Global Biodiversity Framework signatory countries present their national biodiversity strategies and action plans, but just 44 of 196 participating countries had formally submitted these plans by the end of the summit.
Mandatory momentum
Investors are expecting a boost in transparency on companies’ nature-related risks from the roll-out of CSRD, which mandates firms to disclose on their environmental and social impacts, including nature and biodiversity. It has applied since 1 January, with reporting starting early 2025 for large public-interest entities.
The European Commission has proposed an omnibus which would consolidate three pieces of legislation, including CSRD. Experts have warned this could risk significant uncertainty and cost for both investors and businesses, while investors have raised concerns over its implications. Further information is expected on 26 February 2025.
Over time CSRD is expected to impact as many as 50,000 entities across Europe that did not previously have to report on ESG risks, as well as extending to firms beyond the EU.
“CSRD will definitely fuel market growth,” said Root’s Fabian. “We will see a surge in demand for data services, and we will see the nature data ecosystem evolve around that.”
According to Sukhdev, the prospect of CSRD has seen nature and biodiversity emerge as a “material issue” for many companies. “They’ll need to start to get a handle on it, starting with using the right data,” he said. “It will require businesses to invest in the latest data and education about how to approach this topic and derive actionable insights that help them to mitigate unseen risks and discover opportunities for value creation.”
John Rowley-Conwy, Director at UK-based clean-tech company Klere, noted the CSRD’s requirements to report on nature impacts, dependencies, and risks – alongside “greater awareness” of the TNFD disclosure framework – will likely see a spike in investor demand.
“Tools that give users meaningful and actionable interpretations of the data for their respective business will be needed,” he said. “More data is continually becoming available, and companies face being confused or swamped by [that] data.”
Klere today officially launched its Nature Impact Metric, which measures corporate biodiversity footprints. Unveiled at ESG Investor‘s Nature Data event earlier this month, the tool’s data outputs can help companies comply with directives such as the CSRD and international frameworks like the TNFD.
Rowley-Conwy added CSRD will likely increase demand for comparisons across businesses and jurisdictions, prompting demand for “commonly understood and accepted” metrics, which he described as “essential for the development of a well-functioning nature data market”.
The TNFD has recommended that investors and corporates will need to use multiple metrics to complement each other and address their limitations in providing a comprehensive picture of nature impacts and ecosystem health. Speakers at ESG Investor‘s Nature Data event underlined the risks of oversimplification, while also flagging the need to assess impacts and dependencies across multiple locations.
Ben Levett, Lead ESG Researcher at fintech Neural Alpha, said that mandatory nature reporting will see “increased demand for nature-data solutions, greater accountability across supply chains, and operational-level transparency, standardisation and interoperability of data.”
He also highlighted that geospatial solutions are a growing part of the nature data toolkit, while Root’s Fabian also noted improvements in geospatial analytics made in 2025. Geospatial tools are key in assessing nature risks and dependencies and tracking location-specific impacts, with risk assessment tools and satellite technologies to track deforestation and voluntary carbon market projects being launched this year.
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