Nature has been dropped in climate-related conversations for years, but only recently has there been a resounding narrative that nature should be centre stage of these discussions. The intersection of nature and finance is rapidly evolving from a niche sustainability concern to a critical business imperative. As regulatory frameworks like The International Sustainability Standards Board (ISSB) and Taskforce on Nature-related Financial Disclosures (TNFD) recommendations gain momentum, organisations are grappling with a fundamental challenge: translating complex ecological concepts into actionable financial insights to enable them to make future-fit decisions. Despite the momentum, nature-related investments still represent only 1% of total funds – a sobering reminder of how far we have to go.
Shortcomings of the current state
The regulatory landscape is shifting
ISSB is proposing significant amendments to the SASB standards, working closely with the TNFD. This collaboration signals a major step towards standardising how companies assess and report on nature-related risks. The focus will be on establishing industry-specific baselines for improved comparability and addressing critical areas such as water usage, soil health, and land use impacts.
The comparability challenge
TNFD, alongside the University of Oxford and Global Canopy, has published a paper comprehensively evidencing the financial effects of nature-related risks. It highlights a crucial gap in current approaches - a symptom of the over-reliance on qualitative stakeholder input in identifying and assessing risk (as opposed to data-driven or model-based approaches), and a lack of disclosure on the full causal chain from nature impacts/dependencies to financial outcomes. While companies have started to use TNFD’s LEAP approach to assess the materiality thresholds of their sites, more should be disclosed to help financial institutions gather better insight into the assets at risk and help them determine their portfolio risk exposure (including disclosing asset location and footprint footage).
The feedback loop
Companies need to acknowledge the feedback loop between location-based and corporate-based decision-making, which currently remains fragmented. While tools like ENCORE, IBAT, and the Biodiversity Risk Filter provide valuable data, the real challenge lies in translating this information into meaningful corporate strategies that consider local-level impacts and learnings. While communicating relevant policies allows you to meet some ESG raters and rankers’ scoring criteria, best practice is to be transparent on the actions taken on the ground across material assets, as a ‘one-size-fits-all’ approach doesn’t cut it when considering ecosystem services.
The Data Disconnect
Here's where things get interesting and problematic. While academic research provides compelling evidence as to nature's financial impact, this knowledge isn't translating effectively at the corporate level. TNFD has published a nature-related financial risks database , signposting to existing academic research, case studies and empirical data providing evidence on the relevant financial effects of nature-related risks on corporations and financial institutions. Financial institutions are increasingly using sophisticated quantitative methods to assess nature-related financial effects, but companies are lagging significantly behind in this space.
Rethinking our approach to nature
Taking all of this into consideration, how can we take nature seriously? It’s not about trees and pollinators, although important, nature is also about water, soil, land use and marine ecosystems.
Several fundamental shifts are needed:
01 Language matters
The challenge isn't just technical – it's linguistic. The way we talk about ‘nature’ in business contexts needs to evolve to bridge the gap between scientific accuracy and corporate comprehension.
02 Simplifying the concept of nature
There's a critical lack of understanding about what ‘nature’ actually means in business contexts. Ecosystem services remain abstract concepts for many politicians and board members. The solution? Focus on the two to three ecosystem services which are critical to your business and that can be easily communicated and understood.
03 The risk-externality feedback Loop
The concept of risk externalities and exposure creates a feedback loop that many organisations are still learning to navigate. Understanding where risks originate, how they manifest as externalities, and how they circle back to impact business operations is crucial for effective nature-related risk management.
04 Addressing data gaps
Current data doesn't capture transition channels effectively. By assessing these channels, it’s possible to translate how nature-related hazards lead to physical and transition risks that can affect the economy at micro, sectoral/regional and macro levels. While academics study specific elements like pollinators or fisheries, they often miss broader impacts like water scarcity that cascade across industries and supply chains. As an example, when mining operations shut down due to water shortages, the ripple effects extend far beyond a single sector.
05 Productivity redefined
We need to fundamentally rethink productivity, considering not just individual and corporate performance, but ecosystem health and true costs. This holistic approach recognises that long-term business success is inextricably linked to environmental sustainability.
Spotlight: ACCIONA
ACCIONA has launched ATLAS, an innovative digital platform that provides detailed, project-level ESG impact reporting across 240+ projects. This represents a shift from traditional corporate-level sustainability reporting to granular, location-specific transparency.
Key Platform Features:
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Real-time data with last update timestamps
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Complete project portfolio visibility with total project counts
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Key sustainability metrics dashboard
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Geographic mapping of operations across multiple countries
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Value chain impact analysis throughout project lifecycles
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AI-powered navigation and data customisation for enhanced user experience
Strategic Purpose:
The platform serves dual objectives: providing contextual information about ACCIONA's territorial impact whilst meeting the increasingly demanding requirements of ESG rating agencies and international reporting frameworks. This approach exemplifies the shift towards location-based sustainability reporting that bridges corporate strategy with local community impact, exactly the type of innovation needed to address the nature-related financial risk reporting challenges outlined in current TNFD discussions. Such a shift from corporate-level to local-level reporting provides more granular, actionable insights, which also helps financial institutions to assess the portfolio risk exposure.
Moving forward
The path ahead requires unprecedented collaboration between academics, regulators, financial institutions, and corporations. We need frameworks that are scientifically robust yet practically applicable, data systems that capture both local nuances and global trends, and communication strategies that make complex ecological concepts accessible to decision-makers.
The stakes couldn't be higher. As climate change accelerates and biodiversity loss intensifies, the organisations that successfully integrate nature-related considerations into their financial decision-making will not only contribute to planetary health – they'll also position themselves for long-term resilience and success.
The question isn't whether nature-related financial risk will become mainstream; it's whether your organisation will be ready when it does.