CGM Conversations: Session 1 – Nature, Risk, and Responsibility: A TNFD Deep Dive for Decision-Makers

The Climate Governance Malaysia (CGM) Conversations Series provides a dynamic forum for corporate leaders to engage directly with global experts and peers. These sessions deliver timely insights into emerging trends, regulatory developments, and actionable strategies that are shaping corporate climate ambition. Held on 9 May 2025, the inaugural session of the series focused on the Taskforce on Nature-related Financial Disclosures (TNFD), featuring Tony Goldner, CEO of the TNFD.

In his presentation, Tony emphasized the urgent need for a fundamental shift in how businesses and financial institutions engage with nature. While the past two decades has seen significant progress in developing analytical tools to address carbon emissions, such as carbon budgets and emission scopes, Tony highlighted the importance of applying similar strategic thinking and investment to nature. He positioned this not as an exercise in compliance or corporate social responsibility, but as a matter of strategic risk management and long-term value creation.

Businesses, he suggested, must move beyond the binary lens of mitigation and adaptation to consider the resilience of natural systems as integral to their own operational resilience. Ecosystem services—such as water regulation, pollination, and soil stability—are not peripheral concerns; they are the foundational infrastructure upon which supply chains and profitability depend. Rather than treating nature as an externality, companies should invest in it as they would any other form of critical infrastructure. Tony encouraged more integrated, “three-dimensional” restoration approaches that generate benefits across carbon, biodiversity, and social dimensions rather than “one-dimensional” carbon-focused efforts, such as fast-growing monoculture forestry. As nature degradation increasingly threatens multiple planetary boundaries, ecosystem decline must be acknowledged as a real and material threat to financial stability.

Moreover, Tony highlighted that investor expectations are now moving faster than regulatory requirements. Global asset owners and financial institutions are demanding greater accountability and transparency regarding nature-related risks. Referencing TNFD’s When the Bee Stings report, he illustrated how unmanaged nature risks have already impacted company valuations—Tesla, for example, saw a significant share price drop due to groundwater issues in Germany, while Pacific Gas and Electric Company (PG&E) filed for bankruptcy following wildfire liabilities. TNFD’s engagement with universal asset owners reveals a growing recognition that nature-related risks are systemic and non-substitutable. Unlike other risks, investors cannot diversify away from nature dependence, nor can they "denature" their portfolios. For instance, Norway’s Norges Investment Management, the world’s largest sovereign wealth fund, has divested from companies over their inadequate responses to nature-related issues—only reinvesting once those companies began taking credible action.

Addressing perceptions that nature-related disclosures are new, Tony clarified that the International Financial Reporting Standards (IFRS) S1 already requires companies to disclose material sustainability risks—including those related to nature. The TNFD offers a structured approach to support such assessments, anchored in its LEAP framework: Locate, Evaluate, Assess, Prepare. Additionally, TNFD’s disclosures are just the tip of the iceberg; beneath that lies comprehensive guidance on assessments and transition planning. Capacity building remains a critical priority, and TNFD is expanding its efforts across ASEAN to support institutions in integrating nature into their strategic and financial decision-making.  He noted that the TNFD is not a regulator, but a market-led initiative that collaborates with standard-setters like the International Sustainability Standards Board (ISSB) to ensure coherence and integration. The long-term ambition is for TNFD’s recommendations to be absorbed into existing global sustainability standards, at which point TNFD’s role will naturally conclude.

Tony also spoke about the financial opportunities presented by nature, describing nature as the “biggest opportunity since the Industrial Revolution”. While much of the focus on TNFD has been around risk and disclosure, a core aim is also to catalyse action and unlock investment in nature-positive solutions. The primary limitation, in his view, is not a shortage of ideas or projects, but a lack of scale and bankability that can attract institutional capital. He encouraged efforts to develop commercially viable nature-based initiatives, citing examples such as Goldman Sachs’ $500 million biodiversity fund and emerging debt-for-nature swaps.

In closing, Tony emphasized that Asia has both the most to lose from inaction and the most to gain from leadership. He expressed optimism that Malaysia and its regional peers can lead in designing financially viable, nature-positive solutions that respond to growing market expectations while addressing regional vulnerabilities.

Following the presentation, a Q&A session was held, moderated by Dr. Gary Theseira, Chair of the CGM Council. During the discussion, Tony responded to a range of questions covering topics such as incentives and costs associated with disclosure, support mechanisms for SMEs, risks of greenwashing, and the broader social implications of nature-related financial reporting.

To explore the conversation, watch the recording of the session here.

Click here for the presentation slide and photos.