SLR response to TNFD consultation on LEAP guidance refinement and scenario analysis

SLR Response to the Consultation

Drawing on our experience delivering nature-related risk assessments, climate and nature scenario analyses, sustainability reporting and transition planning projects, SLR welcomed the opportunity to contribute to the TNFD consultation.

In general, SLR supports the proposed refinements and agrees with the Taskforce on Nature-related Financial Disclosures (TNFD) focus on improving the practical application of the Assess phase and scenario analysis.

We have added some commentary where we see the guidance could be strengthened, specifically where companies are seeking practical support to apply the framework consistently, quantify financial effects and integrate nature-related risks into existing climate, risk management and decision-making processes.

Key areas targeted by the proposed TNFD refinements

SLR supports the TNFD's proposed focus on:

• Improving the identification of nature-related risks and opportunities through clearer definitions, conceptual diagrams and practical examples.
• Strengthening guidance on embedding nature-related risks and opportunities within existing enterprise risk management processes.
• Enhancing risk and opportunity measurement, quantification and prioritisation methodologies.
• Clarifying materiality assessment processes and approaches for estimating financial effects.
• Improving scenario analysis guidance, including the selection and application of scenarios, modelling approaches and assessment methodologies.

Additional refinement opportunities identified by SLR

There are a number of key areas we believe the guidance could be strengthened:

• Integration of climate & nature: including guidance on how organisations can leverage existing climate risk governance, risk management frameworks and scenario analysis methodologies to assess nature-related risks in a more efficient and consistent manner.
• Practical guidance on translating dependencies and impacts into business risks: focusing on practical examples, worked calculations and approaches to estimating financial effects.
• Expanding guidance on the treatment and communication of uncertainty: including the use of assumptions, proxy data, sensitivity analysis and ranges of outcomes.
• More detail on scenario analysis: including approaches to managing data limitations, applying available datasets and translating scenario outputs into strategic planning, risk management and business decision-making processes.
• A maturity-based implementation pathway: supported by self-assessment tools, training resources and guidance on phased assessments for organisations at earlier stages of TNFD adoption. Such pathways should explicitly distinguish between:
  • Foundational users, who require clear starting points, illustrative worked examples and simplified tools to build organisational understanding and capability.
  • Advanced users, who are ready to progress towards quantification, scenario analysis and integration with enterprise risk management and financial risk frameworks.