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Physical: Pandemics and social impact

The interconnectedness of human health, biodiversity, and business has never been more evident. Pandemics and their cascading social impacts present significant physical risks to operations, labour markets, and financial performance—particularly in an increasingly globalised economy.

Zoonotic disease outbreaks, such as COVID-19, are closely linked to biodiversity loss, deforestation, and human encroachment on natural ecosystems. As these pressures intensify, so too does the risk of new pandemics—each with the potential to halt production, disrupt supply chains, and destabilise entire markets.

The social impact of such crises—ranging from workforce displacement and community health breakdowns to civil unrest—can further exacerbate physical risks. Businesses operating in socially vulnerable regions or labour-dependent sectors may face sharp declines in productivity, increased absenteeism, and long-term reputational damage.

These challenges are often magnified in areas with weak healthcare infrastructure or inadequate resilience planning, increasing the likelihood of sustained disruption and delayed recovery.

NatureAlpha’s Geoverse 2.0 helps organisations assess exposure to pandemic-related risks by analysing asset proximity to ecological disruption and vulnerable regions.Combined with nature risk scoring and biodiversity mapping, the platform enables companies to identify weak points in their value chains and build more resilient, socially responsible, and future-ready strategies.

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NatureAlpha Team
April 11, 2025

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Transitional: Investor divestment & strategy revision

As nature-related risk becomes a core consideration in sustainable finance, investor divestment is emerging as a significant transitional risk for companies failing to align with biodiversity and ecosystem protection goals.

Transitional: Litigation and liability risk

As environmental regulations tighten and public scrutiny intensifies, litigation and liability risk is becoming a critical transitional issue for businesses and financial institutions.

Transitional: Supply chains, systems & processes

As the global economy undergoes a transition toward sustainability, companies face increasing pressure to re-evaluate the supply chains, systems, and processes that underpin their operations.

Transitional: Policy change and activism

As awareness of biodiversity loss and environmental degradation rises, policy change and activism are rapidly reshaping the operating environment for businesses and investors.

Transitional: Natural resource availability

As the global economy shifts toward sustainability, natural resource availability is becoming a central transitional risk. Businesses that rely heavily on finite or declining resources are increasingly exposed.

Transitional: Regulatory and compliance changes

As global momentum builds around sustainability and biodiversity protection, regulatory and compliance changes are emerging as a key transitional risk for businesses and financial institutions.

Physical: Pandemics and social impact

The interconnectedness of human health, biodiversity, and business has never been more evident. Pandemics and their cascading social impacts present significant physical risks to businesses.

Physical: Biodiversity & ecosystem loss

As the natural world continues to degrade, biodiversity and ecosystem loss is becoming a major driver of physical risk—undermining the very systems businesses rely on for resources, resilience, and stability.

Physical: Water risk and rising sea levels

As global temperatures rise, physical water risks and sea level rise are emerging as some of the most material threats to infrastructure, economies, and investment portfolios.

Physical: Droughts, deforestation and landslides

As climate change accelerates and ecosystems are degraded, physical risks such as droughts, deforestation, and landslides are becoming more severe and financially consequential.