Efforts to quantify the risks and opportunities related to nature have proved difficult but progress has been made.
Nature-derived services are important for the global economy. Research from the World Economic Forum (WEF) found that over half of the world’s Gross Domestic Product (GDP) is either moderately or highly dependent on nature and its services(1). For example, fresh water is critical to many businesses, including agriculture, mining, and food retailing; genetic diversity in nature is critical to the pharmaceutical industry; and intact wetlands and forests protect buildings and infrastructure from flooding, storms, and natural disasters.
Nature refers to the natural world. It is generally considered to consist of four realms: land, ocean, freshwater and atmosphere. Each of these differs in terms of their organization and function and provides an important starting point for understanding how organizations and people depend, and have impacts, on nature(2).
The potential systemic impacts of nature-related factors are also increasingly being recognized. While not a legally binding agreement, the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF) by 188 countries in December 2022 was an important development as it set out goals, targets, and expectations regarding national commitments that aim to halt and reverse nature loss(3).
Despite the global economy’s dependence on nature, efforts to quantify related risks and opportunities have been constrained by a lack of consistent and reliable data and methodologies. Recent progress has been made with the release of the Taskforce on Nature-related Financial Disclosures’ (TNFD) final recommendations in September 2023(4). The TNFD provides a voluntary framework and sector-specific guidance for the disclosure of nature-related dependencies, impacts, risks, and opportunities(5).
1 New Nature Economy Report II: The Future of Nature and Business, World Economic Forum, July 2020.
2 Recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD), TNFD, September 2023.
3 COP15: Nations adopt four goals, 23 targets for 2030 in landmark UN Biodiversity Agreement, Convention on Biological Diversity, December 2022.
4 Taskforce on Nature-related Financial Disclosures (TNFD) Recommendations, September 2023.
5 Additional Guidance for financial institutions, TNFD, September 19, 2023.
