When nature makes the balance sheet

What if financial performance wasn’t the only metric that mattered?

What if we started asking not only how well is the company doing, but also how well is nature doing based on the company’s actions? This is the shift driven by the Taskforce on Nature-related Financial Disclosures (TNFD) – a global initiative redefining how businesses account for their impact on the natural world. “TNFD is helping make nature visible – in boardrooms, on balance sheets, and soon in our everyday lives,” says Bahati Hassan, ESG and Impact Graduate Trainee at Sanlam Investments.

Why TNFD matters
Traditionally, finance excels at valuing companies, spotting upside and calculating risk. But as Hassan asks: “How do we measure the value of a coral reef? Or the cost of a disappearing wetland? What’s the financial worth of those carefree beach moments we love – and what happens when they’re gone?” Could we quantify the cost of the ocean?

TNFD provides a framework to answer these questions. It helps companies and financial institutions identify, manage and report their dependencies and impacts on nature – moving beyond vague statements like we use too much water to structured disclosures on how biodiversity loss, water scarcity, and other environmental factors affect financial performance.

The approach: treating nature as an asset
“TNFD is about treating nature like an asset – recognising that it has value, risk, and financial consequences,” explains Hassan. Rather than asking businesses to put a rand value on every ecosystem, TNFD encourages them to map how their operations depend on nature and to report those relationships transparently.

This information empowers investors, regulators, and analysts to price risks more accurately and identify opportunities tied to environmental stewardship.

A practical example
TNFD structures such analysis through its LEAP approach – Locate, Evaluate, Assess, Prepare – enabling companies to integrate nature into strategic decision-making.

Consider a coffee shop to illustrate the TNFD approach:
• Dependencies: Healthy pollinator populations and reliable rainfall are essential for coffee farming; clean water is vital for processing beans.
• Impacts: Coffee plantations may drive deforestation, overuse water and harm local insect and bird populations.
• Risks: Drought, regulation, or reputational damage from unsustainable practices could threaten profitability.
• Opportunities: Investing in regenerative farming and marketing biodiversity-friendly coffee could improve resilience and attract customers.

Beyond compliance – communicating what matters
According to the Morgan Stanley Institute for Sustainable Investing, nearly 90% of global individual investors say they are interested in sustainable investing – not only for returns but also to support positive outcomes. Consumers, too, are willing to pay a 9.7% premium for sustainability, even with inflation weighing on them.

Yet, TNFD and most environmental disclosures are not designed for everyday people – not for consumers, nor retail investors. Hassan says, “Shouldn’t they be? This kind of information could help us make smarter choices about where we shop, who we trust and where we invest.”

The CDP Disclosure Project found that companies are twice as likely to publish sustainability information when stakeholders ask for it. So why aren’t we asking more?

“We say we want people to care about nature,” says Hassan, “but then we hide all the important information in 90-page PDFs written in finance-ese. What’s the point of disclosure if the only people reading it are the ones writing it?”

Meanwhile:
• 67% of consumers use social media to discover brands
• 70% check reviews before making a purchase

Imagine breaking down complex nature-related risks into short, relatable videos or eye-catching infographics that show why these issues matter – not in abstract financial terms, but in ways that connect to our lives: summer days at the beach, hikes in the mountains and even our daily walks. Partnering with environmental advocates, finance educators, and trusted influencers can amplify these messages, turning finance jargon into everyday conversations. Beyond social media, even simple “nature impact” labels on products and investments could help people make smarter choices without drowning in reports.

“If companies want to make an even bigger difference,” Hassan adds, “we need to communicate sustainability in a way people can understand. Let’s invite ordinary voices into the boardroom.”

TNFD is helping bridge that gap. It is making nature visible – in boardrooms, on balance sheets, and potentially beyond, reaching into people’s everyday lives. Hassan concludes, “The Sanlam Group is an early adopter of the TNFD recommendations, demonstrating our sustained commitment to preserving the planet. Putting nature first is the only way to invest in the future we all need.”