TNFD Pilots:

Why Deforestation Is a Natural Entry Point for TNFD

Global Canopy led a suite of piloting projects of which Frontierra was appointed as a Technical Lead. The projects identified deforestation as an effective starting point for financial institutions approaching TNFD. Data availability is relatively strong compared to other nature domains, and the risks, financial, regulatory and reputational, are well understood. Incoming legislation such as EU Deforestation Regulation (EUDR), growing investor scrutiny, and commitments such as the Financial Sector Deforestation Action (FSDA) all mean deforestation exposure is a pressing concern for institutions with portfolio links to agriculture and land use.

Frontierra led two pilot projects working with two institutions with different structures and exposure profiles. JGP Asset Management is one of the three largest independent asset managers in Brazil and had already been actively managing deforestation risk across its portfolio since COP26. Grupo SURA is a Latin American investment management consortium with indirect exposure through subsidiaries in insurance, asset management and banking, and was earlier in the process of developing systematic approaches to nature-related risk.

How Frontierra Applied the LEAP Process

Frontierra supported both institutions through an asset-level assessment structured around the TNFD LEAP approach: Locate, Evaluate, Assess and Prepare.

Locate

The first challenge was identifying which portfolio companies had material deforestation exposure and, critically, where their assets were located. Location is foundational in nature risk assessment in a way it is not for greenhouse gas emissions. The same type of asset presents a fundamentally different risk profile depending on whether it sits within a biodiversity hotspot, near a protected area, or in a region with high recent forest loss.

Frontierra used three data approaches depending on availability: direct GIS analysis where boundary data was provided; buffer analysis where only a point location or address was available; and the Trase platform to identify sourcing municipalities where no direct location data existed. Even municipality-level data is sufficient to generate a meaningful risk signal and inform engagement with the investee company.

Evaluate and Assess

With locations established, Frontierra mapped each site against key state-of-nature indicators: protected areas, Indigenous territories, biodiversity hotspots, forest integrity, land use change and water stress. Satellite imagery from Planet Labs via the NICFI programme and the European Space Agency, alongside open-source data from Global Forest Watch and government datasets, was used to detect deforestation at and around each asset. Indicators were combined into a classification that allowed both institutions to triage their portfolios, identifying assets requiring immediate attention and those that could be monitored on a lighter-touch basis.

Financial risk implications were assessed in the context of each institution's specific exposure. For JGP, with a public 2025 deforestation-free commitment, any detected deforestation was highly material. For Grupo SURA, the focus was on developing internal processes and engagement frameworks for managing indirect exposure over time.

What the Institutions Found

JGP entered the pilot with a relatively advanced baseline, having built a deforestation monitoring protocol and active ownership programme across its portfolio since its FSDA commitment at COP26. One significant outcome of the TNFD-structured assessment was the ability to improve carbon credit pricing on a portfolio project and begin measuring biodiversity credits alongside carbon within the same investment structure. For Jose Pugas, JGP's Head of Responsible Investments, the process demonstrated that rigorous nature assessment opens up financial opportunities that would not otherwise be visible.

Grupo SURA's experience reflected the challenges many financial institutions face when exposure is indirect and asset-level data limited. Most location data was drawn from public sources. Translating site-level findings into portfolio-level financial risk remains a methodological work in progress. The key learnings from the pilot were practical: familiarity with the LEAP process, knowledge of the available data tools, and a clearer picture of how to strengthen due diligence and engagement processes going forward.

Frontierra's Contribution

Frontierra's role in the pilots centered on providing expert advice and guidance on how to design a method for nature assessment appropriate to the unique characteristics of each of the organisations, and one that produced meaningful and useful outputs. Frontierra leveraged their expertise in geospatial and satellite analysis to undertake the Locate and Evaluate stages of the LEAP process, including deriving location data where institutions had limited direct access, conducting satellite-based deforestation analysis at the asset level, and building the nature indicator framework used to classify and triage each portfolio. A key aspect of Frontierra's approach is combining automated initial assessment with expert verification, specifically to avoid the risk of erroneous findings that could disadvantage smallholder producers in agricultural supply chains.

The data hierarchy used in the pilots, prioritising government-produced datasets, trusted NGOs and authoritative satellite sources, is consistent with Frontierra's standard methodology for nature assessment.

You can explore the deforestation monitoring service and nature risk and opportunity assessment in more detail on our services pages.

For a full introduction to the framework, read our guide to TNFD: what it is, who it applies to, and how to get started.

Get Started with Frontierra

Whether you are assessing deforestation exposure in a lending or investment portfolio, preparing for TNFD disclosure, or working through the LEAP process for the first time, Frontierra has the tools and experience to support you.

Get in touch with our team to discuss your requirements, or visit the Media page for further thinking on deforestation regulation and nature risk.

Watch the full presentation from New York Climate Week on the Global Canopy YouTube channel.