For most Nigerian sustainability managers, ESG reporting starts and ends with carbon emissions, energy use, and employee welfare data. These are legitimate metrics. But an entirely different category of environmental risk is now being priced into investment decisions and supply chain contracts globally, and Nigerian companies with land-use footprints are being affected whether they know it or not.
That category is nature and biodiversity risk, and the framework driving it is called TNFD: the Taskforce on Nature-related Financial Disclosures.
By the end of this article, you will understand what TNFD is asking for, why it is relevant to Nigerian operations specifically, and why the companies that start building nature data now will have a significant advantage over those who wait.
What Is TNFD and Why Does It Matter Now?
TNFD is a global disclosure framework that asks companies and financial institutions to assess, disclose, and manage their dependencies and impacts on nature. It was formally launched in September 2023 and is already being adopted by over 400 companies globally, including major banks, agricultural commodity traders, and infrastructure investors.
The logic of TNFD is straightforward: businesses depend on nature for inputs like clean water, pollination, and fertile soil. At the same time, many business activities degrade the ecosystems that underpin those inputs. That creates financial risk, both from the loss of the natural resource itself and from regulatory and market responses to the degradation.
What distinguishes TNFD from earlier environmental frameworks is that it goes beyond carbon. It asks: what ecosystems does your business depend on, what are you doing to those ecosystems, and what would it cost your business if those ecosystems were significantly degraded?
The Nigerian Exposure
Nigeria’s economy is unusually exposed to nature-related risk for three reasons.
First, agricultural value chains from cocoa and palm oil to cassava and rubber are directly dependent on soil health, rainfall patterns, and pollinators. Climate-driven disruptions to any of these inputs translate directly to yield loss and price volatility.
Second, the Niger Delta contains one of the most biodiverse ecosystems in West Africa, and decades of oil extraction have created documented losses of mangrove coverage, fish stock depletion, and water contamination. Companies operating in or sourcing from the Delta carry legacy nature-related liabilities that are beginning to appear on investor risk registers.
Third, Nigeria’s agricultural export growth strategy puts Nigerian producers directly in the path of new EU and UK import regulations that are incorporating biodiversity and deforestation-free requirements.
What Biodiversity Accounting Actually Involves
The term sounds academic, but the core of biodiversity accounting is a set of practical questions about your operations and supply chain.
- Which ecosystems are within your facility footprint or supply catchment area?
- What natural resources does your operation depend on directly, water, soil, biological materials?
- What is the condition of those ecosystems and is it improving or declining?
- What would your operation look like if those ecosystems degraded significantly?
- What actions are you taking to maintain or restore ecosystem health?
The tools for answering these questions range from free, open-access platforms like the IBAT biodiversity screening tool and Global Forest Watch, to more formal site-level assessments. Most Nigerian companies with modest land footprints can conduct a useful biodiversity screen using publicly available data at very low cost.
What Early Movers Are Getting Right
A number of Nigerian food companies and agricultural exporters are already responding to buyer requests for nature-related data. The ones doing it well share a common approach: they are building documentation systems now rather than waiting for a specific reporting deadline.
They are mapping their facility locations against official biodiversity sensitivity layers. They are recording any water abstraction volumes and the sources those volumes come from. They are beginning to track land management practices in their supplier base. None of this requires expensive consultants or sophisticated software at the initial stage. It requires organised data collection and a decision that this information matters.
The Risk of Waiting
The companies that will struggle are those who treat TNFD as a future compliance exercise and do nothing until it is formally mandatory in their market. The challenge is that building baseline data takes time. If you have no recorded baseline for ecosystem condition at your sites today, any future disclosure that claims improvement will have nothing to compare against.
Investors and buyers who use TNFD-aligned frameworks are not going to wait for Nigerian regulation to catch up. They will simply source from suppliers who have the data, and divert capital to companies that have it on their ESG disclosure.
Want to understand your company’s nature-related risk exposure? Teasoo Consulting offers biodiversity risk screening and TNFD readiness assessments tailored for Nigerian businesses in agriculture, extractives, and land-use sectors. Email info@teasooconsulting.com to find out where to start.
