Guidance helps CFOs plan for nature-related risks

The Taskforce on Nature-related Financial Disclosures and Accounting for Sustainability have partnered on a new guide to help chief financial officers assess how nature-related dependencies, impacts, risks and opportunities can affect their businesses' financial performance and future prospects.

The new guide, Asking Better Questions on Nature for CFOs, was released Tuesday at the A4S Summit in London. It includes questions for CFOs and finance teams to support the integration of nature-related issues into risk management, capital allocation, valuation, performance management, financial planning and strategic decision making. It's part of a series of guides for decision makers on nature being produced by the TNFD. The International Sustainability Standards Board is set to take over the work of the TNFD later this year. 

Through a focused set of questions, the guide supports CFOs in connecting nature-related information and insights to financial and risk management processes and ultimately to their decision making and that of their leadership teams. It discusses what CFOs should look for in information and recommendations prepared by their team and helps CFOs prepare for increasing scrutiny from boards, investors and other stakeholders.

"Nature has quickly shifted from a CSR and compliance issue to a strategic risk and opportunity management imperative," said TNFD CEO Tony Goldner in a statement. "CFOs need to understand how the resilience of the cash flows of their business depend on nature's flows of essential inputs into their operations and business model. We are delighted to have teamed up with A4S to produce this practical and personal guidance for CFOs — the third in our 'Asking Better Questions on Nature' series for senior decision makers in business and finance."

Accounting for Sustainability is a group originally established by King Charles when he was the Prince of Wales to encourage accountants to get involved with sustainability reporting. "CFOs are at the heart of sustainable value creation," said A4S executive chair Jessica Fries in a statement. "With S&P research suggesting that 85% of companies in the S&P Global 1200 index have a significant dependency on nature in their direct operations, gaining a better understanding of nature-related risks and opportunities, impacts and dependencies, is critical. This guide — developed by finance, for finance — helps CFOs and other senior finance professionals ask the right questions of their business, and translate awareness into action."

While sustainability reporting is still widely supported in the U.K. and Europe, the U.S. government has been moving away from environmental efforts under the Trump administration, with the Securities and Exchange Commission proposing last Friday to formally rescind the climate-related disclosure rules approved in 2024 under the Biden administration, although they never took effect amid a wave of industry lawsuits.