ESRS-TNFD interoperability mapping finds ‘very good alignment’

Interoperability mapping between the European Sustainability Reporting Standards (ESRS) and the Taskforce for Nature-Related Financial Disclosures recommendations has found that the two are mostly aligned, with all 14 TNFD disclosures covered “to some extent” under the ESRS.

This is according to Emily McKenzie, Technical Director at the TNFD, and Pedro Faria, Environmental Leader at EFRAG, who were speaking at a meeting of the EFRAG sustainability reporting board meeting yesterday (May 15), where a draft of the interoperability guidance was approved.

“We have not spotted a lot of differences,” said Faria, noting that nature disclosures remain more “narrative than quantitative”. “We don't have a methodology to say this is 80% aligned, so this relies on perceptions and I would say that overall we have a very good alignment on the principles and high level disclosures,” he added.

McKenzie, who worked with Faria on mapping the similarities between the two frameworks, admitted that the TNFD disclosures tend to be more specific than the ESRS “because we heard from investors that they wanted that specificity for consistency and reporting”.

“But from what I've seen, with the mapping in the direction we've done, ESRS means all 14 of our recommended disclosures are covered to some extent,” she said.

EFRAG approves ESRS-TNFD interoperability guidance draft

During the meeting, the EFRAG sustainability reporting board approved the draft document mapping interoperability between the ESRS and TNFD recommendations, which should now be published shortly.

The guidance is meant to support companies planning to disclose their nature and biodiversity impacts based on the TNFD framework – nearly 400 firms have now committed to this – in using these disclosures for ESRS compliance as part of the Corporate Sustainability Reporting Directive (CSRD).

“We see huge interest from market participants, both financial institutions and corporates who are adopting the TNFD, in having this documentation to enable them to see (...) correspondence or interoperability from the ESRS through to the TNFD, and the complementarity. I think this is going to be an extremely important and useful document for the market,” added McKenzie.

Based on a memorandum of understanding (MoU) signed between the two entities in December 2023, the guidance follows similar documents mapping the correspondences between ESRS and the International Sustainability Standards Board (ISSB) standards, as well as Global Reporting Initiative (GRI) disclosures. 

In the same way, the ESRS-TNFD interoperability guidance was developed with informal feedback from preparers but will not be subject to public consultation.