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Nature matters: the risks are here and now

Why companies should engage with the fast-rising nature risk agenda

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The environmental agenda, particularly climate change and net zero, has become central to many aspects of business planning and risk management. But climate is far from the only environmental challenge facing companies: a wider set of nature-related risks are fast rising up the corporate agenda. More than half of global GDP is either moderately or highly dependent on nature and its services, including for the provision of raw materials and water, recreation and tourism opportunities, protection from flooding, erosion and wildfires, and carbon sequestration. This makes it all the more alarming that nature loss is at unprecedent levels, threatening the capacity of the natural world to provide these critical services on which companies depend.

This report sets out the channels through which companies are exposed to nature-related risks in ways they might not fully appreciate. It also sets out opportunities, the road ahead, and key questions companies should be asking to ensure they are on top of this emerging issue. The report covers:

  • The need for net zero emissions plans to incorporate nature-related issues, and the ‘climate-nature nexus’.
  • The implications of financial services providers being pushed to factor nature into their risk management and client relationships.
  • Changing customer purchasing decisions and procurement frameworks that will be increasingly influenced by nature-related issues.
  • The global crackdown on greenwashing which will put nature-related claims to the test.
  • The sizeable nature-related regulatory agenda being developed at international, regional and national levels.

Nature and nature-related transition risk is not a problem for another day: it is embedded in multiple areas, many of which companies are already working through, including net zero and greenwashing risk. Companies need to assess these risks, and ultimately embed a science-based analysis of nature in the day-to-day management of their businesses. With nature-related risks rising on the public agenda, there is no better time than now to begin.

 

About the Centre for Regulatory Strategy, EMEA

The Deloitte Centre for Regulatory Strategy is a powerful resource of information and insight, designed to assist financial institutions manage the complexity and convergence of rapidly increasing new regulation.

With regional hubs in the Americas, Asia Pacific and EMEA, the Centre combines the strength of Deloitte’s regional and international network of experienced risk, regulatory, and industry professionals – including a deep roster of former regulators, industry specialists, and business advisers – with a rich understanding of the impact of regulations on business models and strategy.

About the Sustainability Regulation Hub

The Sustainability Regulation Hub is an EMEA multi-industry initiative, that helps Deloitte practitioners and businesses successfully navigate the complex regulatory environment by providing critical insights on European sustainability regulatory strategy.

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