Assessment of nature-related risks
Does the company assess its nature-related risks?
The WBA Nature Benchmark measures and ranks the world's most influential companies on their efforts to protect the environment and its biodiversity, tracking how companies are reducing their negative impacts on nature and contributing to the protection and restoration of ecosystems, aligned with the goals of the Global Biodiversity Framework. The 2026 edition assessed 750 companies across multiple sectors including agro-food, forestry, building, tourism and the blue economy. The benchmark is developed in close collaboration with an Expert Review Committee and partners including GRI, SBTN, and TNFD, with a methodology designed to incentivise companies to understand where nature-related risks are highest and act to halt damaging trends, while keeping human rights and social impacts at its core.
More information can be found here.
More information can be found here.
Ecosystem services are the benefits that humans derive from ecosystems and on which
human life and activities, including corporate activities, rely. Research shows that more than 50% of
global gross domestic product is directly linked to these ecosystem services (WEF and PwC, 2020),
exposing companies to significant nature-related dependencies, risks and opportunities. The 2024
Global Risks Report shows that the top four risks identified over the next ten years are all
environmental: extreme weather events, critical change to Earth systems, biodiversity loss and
ecosystem collapse, and natural resource shortages. Understanding and disclosing these factors is
essential for companies to develop resilient strategies and contribute to a sustainable economyCompanies must:
Identify nature-related risks, and
Quantify how these risks could impact the company’s operations, financial performance, or reputation, using metrics such as potential financial losses, affected area (in hectares), or other relevant units.
Nature-related risks, following [TNFD’s definition](https://tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-related_Financial_Disclosures_September_2023.pdf?v=1695118661) (p. 33), are potential threats posed to an organisation that arise from both its (and society’s) dependencies and impacts on nature.
Types of nature-related risks:
**Physical Risks** are risks to an organisation that result from the degradation of nature and consequential loss of ecosystem services. These risks are usually location-specific:
**Acute risks**: Short-term, specific events that change the state of nature. For example, oil spills, forest fires or pests affecting harvests
**Chronic risks**: Gradual changes to the state of nature. For example, pollution stemming from pesticide use or climate change.
**Transition Risks** are risks to an organisation that result from a misalignment of economic actors with actions aimed at protecting, restoring and/or reducing negative impacts on nature:
**Policy risks**: Changes in the policy context due to new (or enforcement of existing) policies associated with creating positive impacts on nature or mitigating negative impacts on nature.
**Market risks**: Changing dynamics in overall markets, including changes in consumer preferences, which arise from other risk categories as a result of changing physical, regulatory, technological and reputational conditions and stakeholder dynamics
**Technology risks**: Substitution of products or services with a reduced impact on nature and/or reduced dependency on nature.
**Reputational risks**: Changes in perception concerning an organisation’s actual or perceived nature impacts, including at the local, economic and societal level. This can result from direct company impacts, industry impacts and/or impacts of activities upstream and/or downstream in a value chain.
**Liability risks**: Risks that arise from legal claims.
**Systemic Risks** are risks to an organisation that arise from the breakdown of the entire system, rather than the failure of individual parts. These risks are characterised by modest tipping points combining indirectly to produce large failures, where one loss triggers a chain of others, and prevents the system from reverting to its prior equilibrium:
**Ecosystem stability risk**: Risk of the destabilisation of a critical natural system, so it can no longer provide ecosystem services in the same manner as before.
**Financial stability risk**: Risk that a materialisation and compounding of physical or transition risk leads to the destabilisation of an entire financial system
Tools/methodologies that companies can use to assess nature-related risks include but not limited to:
Natural Capital Protocol
Taskforce on Nature-related Financial Disclosures (TNFD)
LEAP (Locate, Evaluate, Assess, Prepare) Approach by TNFD
human life and activities, including corporate activities, rely. Research shows that more than 50% of
global gross domestic product is directly linked to these ecosystem services (WEF and PwC, 2020),
exposing companies to significant nature-related dependencies, risks and opportunities. The 2024
Global Risks Report shows that the top four risks identified over the next ten years are all
environmental: extreme weather events, critical change to Earth systems, biodiversity loss and
ecosystem collapse, and natural resource shortages. Understanding and disclosing these factors is
essential for companies to develop resilient strategies and contribute to a sustainable economyCompanies must:
Identify nature-related risks, and
Quantify how these risks could impact the company’s operations, financial performance, or reputation, using metrics such as potential financial losses, affected area (in hectares), or other relevant units.
Nature-related risks, following [TNFD’s definition](https://tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-related_Financial_Disclosures_September_2023.pdf?v=1695118661) (p. 33), are potential threats posed to an organisation that arise from both its (and society’s) dependencies and impacts on nature.
Types of nature-related risks:
**Physical Risks** are risks to an organisation that result from the degradation of nature and consequential loss of ecosystem services. These risks are usually location-specific:
**Acute risks**: Short-term, specific events that change the state of nature. For example, oil spills, forest fires or pests affecting harvests
**Chronic risks**: Gradual changes to the state of nature. For example, pollution stemming from pesticide use or climate change.
**Transition Risks** are risks to an organisation that result from a misalignment of economic actors with actions aimed at protecting, restoring and/or reducing negative impacts on nature:
**Policy risks**: Changes in the policy context due to new (or enforcement of existing) policies associated with creating positive impacts on nature or mitigating negative impacts on nature.
**Market risks**: Changing dynamics in overall markets, including changes in consumer preferences, which arise from other risk categories as a result of changing physical, regulatory, technological and reputational conditions and stakeholder dynamics
**Technology risks**: Substitution of products or services with a reduced impact on nature and/or reduced dependency on nature.
**Reputational risks**: Changes in perception concerning an organisation’s actual or perceived nature impacts, including at the local, economic and societal level. This can result from direct company impacts, industry impacts and/or impacts of activities upstream and/or downstream in a value chain.
**Liability risks**: Risks that arise from legal claims.
**Systemic Risks** are risks to an organisation that arise from the breakdown of the entire system, rather than the failure of individual parts. These risks are characterised by modest tipping points combining indirectly to produce large failures, where one loss triggers a chain of others, and prevents the system from reverting to its prior equilibrium:
**Ecosystem stability risk**: Risk of the destabilisation of a critical natural system, so it can no longer provide ecosystem services in the same manner as before.
**Financial stability risk**: Risk that a materialisation and compounding of physical or transition risk leads to the destabilisation of an entire financial system
Tools/methodologies that companies can use to assess nature-related risks include but not limited to:
Natural Capital Protocol
Taskforce on Nature-related Financial Disclosures (TNFD)
LEAP (Locate, Evaluate, Assess, Prepare) Approach by TNFD