Prepare: Responding and Reporting
From assessment to action
The Prepare phase is where the analytical work of LEAP translates into business decisions and public disclosures. It encompasses strategy development, target setting, metric selection, and the preparation of disclosures aligned with TNFD's four disclosure pillars. Critically, Prepare is not the end of a one-time exercise - it initiates an iterative management cycle.
What the Prepare Phase Involves
The Prepare phase has four interconnected components: (1) developing or refining business strategy to address material nature-related risks and opportunities; (2) setting targets and goals for nature performance; (3) selecting appropriate metrics to measure progress; and (4) assembling the information needed for TNFD-aligned disclosures across all four pillars.
These components do not necessarily happen in strict sequence. Target setting may inform strategy choices, and metric selection must happen before targets can be defined. In practice, Prepare is an iterative internal process that may take several months for a large organisation conducting its first full LEAP cycle.
Strategy Development in Response to Nature Risk
Strategy development in the Prepare phase translates the risk and opportunity inventory from Assess into concrete business choices. For each material risk, the organisation needs to decide whether to avoid, reduce, mitigate, or transfer that risk. For each material opportunity, it needs to decide whether and how to pursue it through product innovation, supply chain restructuring, investment, or partnership.
TNFD's Strategy disclosure pillar (specifically S1 and S2) asks organisations to describe the nature-related risks and opportunities identified, and how these have affected or may affect the organisation's business model, value chain, strategy, and financial planning. A credible strategy response must be specific about which risks are being addressed, through what actions, over what timeframe, and with what expected effect. Vague commitments to "work with nature" without specific actions and targets do not satisfy TNFD disclosure standards.
Target Setting for Nature
Nature targets are more complex to set than climate targets, primarily because nature is inherently location-specific and multi-dimensional. Unlike a single global temperature target that translates into a universal direction to reduce GHG emissions, biodiversity goals must account for geographic context, species composition, ecosystem function, and the availability of baseline data.
TNFD encourages companies to align their nature targets with the Kunming-Montreal Global Biodiversity Framework's 2030 targets, which provide the global policy framework. The framework most directly applicable to corporate target setting is the Science Based Targets for Nature (SBTN) initiative, which provides a methodology for companies to set targets that are both scientifically grounded and verifiable. The TNFD and SBTN have developed joint guidance for corporates on science-based targets for nature, recognising the close alignment between TNFD assessment and SBTN target setting.
| Target Category | Example | KM-GBF Alignment |
|---|---|---|
| No net deforestation | Zero deforestation across all sourcing by 2025, covering all forest-risk commodities | Target 3 (30x30), Target 10 (agriculture sustainability) |
| Water stewardship | Reduce freshwater withdrawals by 25% in water-stressed catchments by 2030 | Target 7 (pollution reduction), Target 8 (climate-related biodiversity) |
| Land restoration | Restore or support restoration of 10,000 ha of degraded habitat in key sourcing regions by 2030 | Target 2 (restoration of 30% of degraded areas) |
| Nature-positive supply chain | 100% of Tier 1 suppliers to conduct nature risk assessments by 2026 | Target 15 (business disclosure and action) |
| Pollution reduction | 50% reduction in pesticide-equivalent toxicity in sourcing regions by 2030 | Target 7 (pollution halved) |
Metric Selection: Core Global Metrics and Beyond
TNFD's Metrics and Targets pillar requires organisations to select and disclose metrics that reflect their material nature-related risks, dependencies, and impacts. The TNFD has defined a set of core global metrics applicable to all sectors, which organisations are expected to disclose on a comply-or-explain basis. These core metrics provide the foundation of comparability across companies and sectors.
The core global metrics cover five areas:
- Metrics related to the state of nature: Extent and condition of ecosystems, including deforestation rates and habitat quality indicators.
- Metrics related to pressures on nature: Quantitative measures of impact drivers, such as tonnes of pollutants discharged, water withdrawal volumes, or area of habitat converted.
- Metrics related to dependencies: The extent to which key ecosystem services are declining or degraded in areas of material business dependency.
- Metrics related to the state of the response: Progress against targets, including certification coverage, restoration area, and supplier engagement rates.
- Metrics related to nature-related risks and opportunities: Quantification of financial exposure where possible, including asset values at risk and investment in nature-positive activities.
The Four TNFD Disclosure Pillars
TNFD disclosures are structured around four pillars inherited from TCFD but adapted for nature: Governance, Strategy, Risk and Impact Management, and Metrics and Targets. The Prepare phase involves assembling disclosure content for all four pillars.
Example: What Each Pillar Requires in Practice
Governance: Describe which board committee has oversight of nature-related issues; how management reports to the board; and what policies address Indigenous Peoples and local community engagement.
Strategy: Describe the material nature-related risks and opportunities identified through LEAP; how they affect business model and financial planning; and disclose the locations of priority sites (output of Locate phase).
Risk and Impact Management: Describe the processes for identifying, assessing, and prioritising nature-related risks in direct operations and value chain; explain how these are integrated into the organisation's overall enterprise risk management.
Metrics and Targets: Disclose the core global metrics relevant to the organisation; report against nature targets; explain methodology and data sources for metrics.
Getting Started: A Proportionate Approach
The TNFD recognises that not all organisations can complete a full LEAP cycle and produce comprehensive disclosures in their first reporting period. The framework adopts a proportionate and progressive approach, particularly for smaller organisations or those in earlier stages of nature risk management.
The "getting started" pathway recommended by TNFD involves three stages. In year one, focus on Governance and Strategy disclosures: establish board oversight, identify material nature-related risks at a high level using sector-level ENCORE data, and disclose the scope and approach of your nature risk assessment. In years two and three, deepen the Locate and Evaluate analysis, particularly for priority locations, and begin reporting core metrics with whatever data is available, explaining gaps. By year three to five, a full LEAP cycle should be operational, targets set against SBTN methods, and core metrics reported with improving data quality and assurance.
The Iterative Nature of LEAP
An important characteristic of LEAP is that it is designed as a recurring management cycle, not a one-time exercise. As data quality improves, as supplier relationships deepen, and as ecosystem conditions change, each iteration of LEAP should produce more nuanced and complete outputs. The first cycle typically surfaces the biggest gaps and hotspots. Subsequent cycles deepen the analysis and demonstrate management progress.
This iterative design is particularly important for nature because ecological conditions, regulatory environments, and data availability are all changing rapidly. A company that conducts LEAP once and considers the exercise complete will quickly find its assessment outdated. Building LEAP into annual planning and risk management cycles ensures that nature-related information remains current and decision-relevant.
LEAP as a Management System, Not a Report
The most common misconception about LEAP is that it is primarily a reporting framework - something you do once to produce a disclosure document. In reality, the TNFD intends LEAP as a management system: a structured process for continuously improving your understanding of nature interfaces, refining your risk assessment, and embedding nature considerations into core business decisions. The disclosure that results from Prepare is the external-facing output of an internal management process. Companies that build genuine management capability around LEAP will produce better disclosures as a natural consequence, while companies that treat disclosure as the goal often produce hollow reports that satisfy neither investors nor regulators.
Key Takeaways
- 1The Prepare phase converts LEAP assessment findings into strategy decisions, target setting, metric selection, and TNFD-aligned disclosures across all four pillars: Governance, Strategy, Risk and Impact Management, and Metrics and Targets
- 2Nature targets are more complex than climate targets because biodiversity is location-specific and multi-dimensional; the SBTN initiative provides the methodology for setting science-based nature targets aligned with KM-GBF goals
- 3TNFD core global metrics cover ecosystem state, pressures on nature, dependencies, response progress, and financial exposure to nature risks and opportunities
- 4The TNFD recommends a progressive and proportionate approach: year one focuses on governance and high-level strategy disclosures, with deeper analysis and metrics reporting phased over subsequent years
- 5LEAP is designed as an iterative management cycle, not a one-time reporting exercise - each iteration should produce more refined analysis and demonstrate management progress over time