ABSTRACT

This panel examined how biodiversity isbecoming a core pillar of sustainable finance, with investors increasingly required to manage nature‑related risks and opportunities. Speakers discussed the Taskforce on Nature‑related Financial Disclosures (TNFD) as the emerging market reference for governance, strategy, risk management, and metrics & targets, and contrasted its evolution with TCFD. The discussion focused on implementation realities for asset managers—notably data gaps, non‑standard metrics, and the conversion of ecological impacts into financially material insights and portfolio actions. Finally, the panel defined best‑in‑class corporate practice and the role of investor engagement in accelerating adoption, improving disclosure quality, and aligning business models with nature‑positive outcomes. 

Keywords: Biodiversity; Nature‑related risks; Dependencies & impacts; Risks & Opportunities; TNFD; TCFD; Governance; Metrics & Targets; Financial materiality; Portfolio integration; Investor engagement; Greenwashing; Nature‑positive. 

Key Findings

• Biodiversity is becoming a more mainstream topic in finance following the signing of the Kunming Montreal Global Biodiversity Framework in 2022 and the development of disclosure frameworks.   Investors are increasingly adopting measures to identify, assess and manage nature‑related risks, dependencies and impacts, not only climate risks.   
• TNFD is the reference framework for nature disclosure, echoing TCFD’s four pillars while widening scope to nature dependencies and impacts; adoption is accelerating but remains voluntary and heterogeneous across sectors and regions. 
• Challenges remain regarding implementation, including limited data availability, absence of standardized metrics, and difficulties in translating ecological impacts into financially material outcomes and actionable portfolio decisions. 
• Leaders in biodiversity include governance accountability, strategy tied to sector‑relevant pressures on nature, credible targets and KPIs, and transparent methodologies. 
• Investors are increasingly using engagement strategies to influence corporate behaviour, pushing companies toward robust management of nature-related risks and opportunities, where these are material, TNFD‑aligned disclosures, and nature‑positive strategies. 

Contents

The panel opened by framing biodiversity as a financially material theme that intersects physical risks (e.g., disruption of ecosystem services such as water regulation, pollination and soil health) and transition risks (e.g., policy changes, liability exposure, shifting consumer preferences). For diversified investors, these risks surface through supply chains and asset locations, often in naturesensitive geographies. Beyond risk, biodiversity presents opportunities—from naturebased solutions and ecosystem restoration to technologies and solutions that monitor, measure or mitigate nature loss—provided capital allocators can distinguish credible impact pathways from marketing claims. 

Afterwards, the panelists discussed the role of the TNFD, which mirrors TCFD across Governance, Strategy, Risk Management, and Metrics & Targets, but expands beyond climate to incorporate nature dependencies and impacts alongside risks and opportunities. Whereas TCFD is embedded in multiple regulatory regimes, TNFD remains voluntary—yet is gaining momentum as investors request naturerelated transparency and issuers seek coherence with emerging standards. The panel highlighted that TNFD’s emphasis on location, ecosystems, and drivers of nature loss introduces analytical complexity but ultimately enhances decisionusefulness for capital markets.  It also discussed TNFD’s LEAP process, which involves the following steps for corporates to assess:

1. Locate your interface with nature;
2. Evaluate dependencies and impact that your activities have on nature;
3. Assess the risks and opportunities arising from those dependencies and impacts;
4. Prepare to integrate the findings into governance, strategy, risk management, and
   metrics / targets.

Corporate responses to TNFD (over 500 organisations had adopted the recommendations of the TNFD at the time of the FIDE event) are uneven. Some early movers are integrating board oversight, while gaps remain at the stage of highlevel commitments with limited underlying metrics. The divergence reflects sectoral exposure, data scarcity, and internal capabilities. The panel underscored that investor demand for comparability is accelerating convergence, but methodology choices and metrics still vary widely. 

While TNFD is voluntary, the regulatory direction of travel is toward stronger naturerelated disclosure expectations. Asset owners increasingly ask managers to evidence alignment with emerging frameworks. Issuers that proactively map nature hotspots, integrate sitelevel risk management, and build traceability are better positioned for future requirements and for cost of capital advantages tied to improved risk profiles. 

Asset managers face three core frictions. First, data scarcity and quality: biodiversity metrics are dispersed across providers, often modeled, and locationdependent, complicating aggregation. Second, metric standardization: translating ecological indicators (e.g., habitat condition, deforestation footprints, water intensity) into financial materiality and portfoliolevel KPIs remains challenging. Third, integration in investment processes: aligning research, risk systems and active ownership to prioritize naturematerial holdings requires new tools, and crossfunctional expertise spanning sustainability, investment and data science. 

Panelists discussed what “good” looks like from a biodiversity point of view—and how to assess it. In this sense, from an investor perspective, leaders in biodiversity exhibit: 

• Governance with clear board and management accountability for nature; management remuneration that is linked to non-financial KPIs  

• Strategy that identifies material risks (e.g., landuse change, freshwater use, pollution) and dependencies (e.g., water availability, pollination) and links them to business models and capital allocation, and potential opportunities 

• Clear disclosure of nature related data (water, deforestation, waste, location), and a commitment to align with or adopt the recommendations of the TNFD 

• Metrics & Targets that are relevant, comparable, and locationspecific; 

• Transparent methodologies (baselines, estimation techniques, and uncertainty ranges) that reduce greenwashing risk. 

• Stakeholder engagement and leadership – taking a proactive stance to drive more positive outcomes nature related outcomes  

The panel emphasized active engagement with issuers as a primary driver of improvement. Effective engagements are thematic (e.g., deforestation, water stewardship), timebound, and anchored in clear asks (TNFDaligned disclosures, target adoption, traceability milestones). Success metrics include disclosure quality, policy adoption, and demonstrable reductions in pressure indicators (e.g., verified noconversion in priority biomes). Collaborative engagements can mitigate data asymmetries and reduce the burden on issuers, while escalation pathways (voting, resolutions, divestment in last resort) maintain credibility. 

Naturethemed strategies are evolving from exclusionary screens to explicit naturepositive objectives. Portfolio managers are steering thematic funds (restoration, clean water, circular economy, sustainable land use, sustainable food, green technology) and embedding nature KPIs in broader ESG strategies. Policy signals and market demand are channelling a pipeline of investable projects, though the panel stressed the importance of impact integrity and additionality in any naturelinked product.  In this respect, clear engagement targets and bottom up KPIs for monitoring impact outcomes are important elements that need to be incorporated into the impact case and theory of change for individual investments.  

Conclusion and proposals

To address these challenges, several proposals can be made: 

1. Adopt TNFDaligned governance and strategy, even where disclosure is voluntary, to build internal capabilities and anticipate to risks while taking advantage of opportunities.  

2. Close data gaps collaboratively (issuers–investors–providers): prioritize locationspecific data on dependencies/impacts; disclose methodologies and uncertainty to enhance credibility.  

3. Standardize KPIs and methodologies by sector: mix pressure indicators (e.g., land conversion, water withdrawals in stressed basins) with outcome measures where feasible; set time-bound targets and interim milestones.  

4. Integrate biodiversity into investment processes: add nature screens to research notes, embed analytics in risk systems, and align portfolio monitoring with interim milestones and targets.  

5. Scale effective engagement: systematically incorporate biodiversity into engagement programmes, and link voting policies to naturerelated performance and disclosure progress to avoid greenwashing and take advantage of the opportunities.  

6. Develop nature-related strategies to channel capital toward credible naturepositive opportunities. 

Links to Recommended Readings / Specific Bibliography: 

• Taskforce on Naturerelated Financial Disclosures (TNFD) – Framework & guidance: https://tnfd.global/ 

• Taskforce on Climaterelated Financial Disclosures (TCFD) – Framework: https://www.fsb-tcfd.org/ 

• Finance for Biodiversity Foundation – Investor initiatives & tools: https://www.financeforbiodiversity.org/ 

• Science Based Targets Network (SBTN) – Nature targets guidance: https://sciencebasedtargetsnetwork.org/  

• UNEPFI Nature workstream – Naturerelated risk management resources: https://www.unepfi.org/themes/nature/ 

Authors

• Charlie Anniss, Portfolio Manager, M&G.
• Juan Salazar, Senior Engagement Specialist, Pictet Asset Management 
• Moderator: Gonzalo Yebes Gómez, Senior Financial Risk Manager, Banco de España.

Furthermore, this document is signed in a personal capacity and does not represent the official position of the institutions or entities to which the author may belong.

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