Nature-Dependent Firms Now Lead the Biodiversity Disclosure Race, Study Finds

A quiet revolution is unfolding in the world of corporate environmental reporting. For decades, the companies most likely to publish detailed biodiversity information were those with the biggest environmental footprints—miners, oil majors, and heavy manufacturers seeking to defend their reputations. But new research suggests that the arrival of the Taskforce on Nature-related Financial Disclosures, or TNFD, has flipped the script. According to a study published in Environmental and Sustainability Indicators by Keishi Nakao and Ryo Kohsaka of the University of Tokyo, the firms now producing the richest biodiversity disclosures are not those that harm nature the most, but those that depend on it the most.

The stakes could hardly be higher. Scientists warn that the planet is entering a sixth mass extinction, with as many as one million species at risk of disappearing by the end of the century, according to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. Corporate operations are deeply implicated in this crisis: land-use change, direct exploitation of organisms, climate change, pollution, and invasive alien species—the five principal drivers of biodiversity loss identified by IPBES—are all closely tied to business activity. Yet the relationship runs in both directions. The World Economic Forum and PwC estimate that more than half of global GDP, roughly 44 trillion dollars annually, is moderately or highly dependent on natural capital. When pollinating insects decline, coffee and cocoa supplies falter; when ecosystems degrade, the services that underpin entire industries erode with them.

It was against this backdrop that the TNFD emerged. Conceived at the World Economic Forum in Davos and formally established in 2019 with support from organizations including the United Nations Environment Programme, the taskforce released its first set of disclosure recommendations in September 2023. What distinguishes the TNFD from earlier frameworks is its dual emphasis. Companies are asked to report not only their impacts on nature—changes in the state of ecosystems caused by their activities—but also their dependencies: the environmental assets and ecosystem services they rely upon to operate. Earlier initiatives such as the Natural Capital Protocol had introduced these concepts, but corporate biodiversity assessments historically fixated on impacts, leaving dependency largely unexamined.

Nakao and Kohsaka set out to determine whether the TNFD’s conceptual shift had actually changed which companies disclose biodiversity information, and how well. Rather than sampling the largest firms by market capitalization, as many previous studies had done, they focused on 228 companies registered as TNFD adopters as of May 2024, excluding the financial sector. These firms, spread across ten industry groups and dozens of countries—Japan alone accounted for 73 of them—had publicly committed to aligning their disclosures with TNFD recommendations. The researchers then compared the same firms’ biodiversity reporting in 2019, before the TNFD framework existed, and in 2023, after its release.

To measure disclosure quality, the team built a new instrument called the Biodiversity Disclosure Performance Index, or BDPI. Structured around three dimensions—Assessment, Practice, and Target—the index scores companies on ten items, each rated from 0 to 3. Crucially, the index incorporates two cross-cutting criteria drawn directly from the TNFD worldview: whether a firm addresses both impacts and dependencies, and whether its analysis spans the entire value chain rather than just direct operations. Scoring was performed through manual content analysis of integrated reports, sustainability reports, and other formal documents, using nine keywords derived from the TNFD Glossary, because the authors judged that even advanced automated tools could not yet reliably extract contextually accurate information from complex corporate reports.

The results were striking. The mean BDPI score rose from 10.44 in 2019 to 14.49 in 2023, signaling broad improvement. Wilcoxon signed-rank tests showed statistically significant gains in seven of ten sectors, including Food and Beverage, Health Care, Infrastructure, Services, Technology and Communications, and Transportation, with no significant change in consumer goods, extractives, or resource transformation. Regionally, median scores rose significantly in Asia, Europe, and North America. Variance increased in Technology and Communications and Transportation, suggesting firms within those sectors are diverging in their reporting progress rather than converging.

The most provocative finding, however, came from the regression analysis. Using ordinary least squares models with the BDPI as the dependent variable, the researchers tested whether a firm’s impact on nature and its dependency on nature—both measured using ENCORE scores, a tool maintained by Global Canopy, UNEP FI, and UNEP-WCMC that rates industries across 12 impact drivers and 21 ecosystem services—explained disclosure quality. In 2019, the impact score was a statistically significant positive predictor, consistent with the long-standing view that environmentally intensive firms disclose more to legitimize their operations. By 2023, that significance had vanished. In its place, the dependency score emerged as a significant predictor at the one percent level. Firm size, measured by log-transformed employee numbers, remained significant in both years, but no other control variable—profitability, listing status, TCFD adoption, or business type—showed a consistent effect. A robustness check with reweighted index scores confirmed the pattern.

Why would companies voluntarily advertise their vulnerability to nature? The authors offer a three-part explanation. First, investors are expanding their attention beyond environmental harm to the physical and supply-chain risks that arise when businesses depend on degrading ecosystems, a shift documented in studies of institutional investor behavior. Second, competitive dynamics are at play: as TNFD adopters within an industry establish new reporting benchmarks, peers feel pressure to keep pace, and the sectors with the most adopters showed the largest disclosure gains. Third, and perhaps most interesting, is an internal reorientation. Under the Natural Resource-Based View of the firm, the ability to manage rare and vulnerable natural resources can itself become a source of competitive advantage, giving highly dependent firms an intrinsic incentive to measure and communicate their nature-related risk management.

The researchers interpret this shift through the lens of signaling theory. In Spence’s classic framework, firms with superior attributes send costly signals that weaker firms cannot credibly imitate. Assessing and disclosing biodiversity dependencies is genuinely expensive—it demands data collection across value chains and carries reputational risk from exposing vulnerabilities. Yet by doing so, dependency-intensive firms signal to capital markets that they understand and can manage the natural-capital risks that increasingly matter financially. The content of the signal, the authors argue, is changing: from demonstrating low environmental impact to demonstrating the capability to identify and disclose financially material dependencies in a decision-useful way. Legitimacy, in this reading, is being redefined—from proving that a firm harms nature less, to proving that a firm comprehends the natural foundations of its own business continuity.

The study has clear limitations. Its sample consists entirely of early adopters, a self-selected group of frontrunners that may be unusually capable and motivated; whether dependency will predict disclosure quality as reporting diffuses through the wider economy remains an open question. The keyword-based retrieval process may have missed biodiversity content expressed in unconventional terms, and the ENCORE-based scores capture sectoral patterns rather than the specific scale and location of individual firms’ activities. Still, the implications are considerable. If dependency is becoming a genuine driver of corporate transparency, then biodiversity reporting may be evolving from a defensive exercise in reputation management into a strategic instrument for communicating resilience—one in which the firms most exposed to nature’s decline are, paradoxically, the ones most willing to say so out loud.

Subject of Research: Determinants of corporate biodiversity disclosure quality among TNFD adopter firms before and after the TNFD framework

Article Title: Shifting from impact to Dependency?: Determinants of corporate biodiversity reporting among TNFD adopter firms

Article References: Nakao, K., & Kohsaka, R. (2026). Shifting from impact to Dependency?: Determinants of corporate biodiversity reporting among TNFD adopter firms. Environmental and Sustainability Indicators, 32, Article 101567. https://doi.org/10.1016/j.indic.2026.101567

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Keywords: biodiversity disclosure, TNFD, corporate reporting, natural capital, ecosystem services, ENCORE, signaling theory, sustainability reporting, nature-related risk, Kunming-Montreal Global Biodiversity Framework, regression analysis, firm dependency