Nature Dependency Disclosure is becoming mandatory. Companies Must Adapt Fast

A company’s dependencies and impacts  on nature present financial, operational  and reputational risks

There are two ways to classify nature risk

Physical Risk

Physical risks relate to direct impacts on business of droughts, floods and the broader collapse of ecosystem services.

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Transitional Risk

Transition risks relate primarily to non-compliance with emerging nature-related regulation and changes in market demand.

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Making nature risk intelligence, manageable, and actionable

Nature risk analysis is an emerging industry, and NatureAlpha is at the forefront. Working with regulators, industry and government bodies, we map out the needs of our customers and deliver industry and geographically tailored nature risk data and insights.

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How nature risks can affect your business or investments

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Category one

Physical: Wildfires, heatwaves and air quality

As climate change accelerates, nature-related physical risks such as wildfires, heatwaves, and declining air quality are becoming increasingly severe—and financially material.

Physical: Floods, storms and extreme weather

As climate volatility intensifies, physical nature-related risks such as floods, storms, and extreme weather events are becoming more frequent and destructive.

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.

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: 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: 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.

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.

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: 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: 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: 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: 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.

By aligning with TNFD, companies enhance transparency & demonstrate accountability

TNFD is currently a voluntary framework, but growing investor pressure, regulatory momentum (like the EU’s CSRD), and global sustainability trends are pushing more companies to adopt it proactively to stay ahead of compliance expectations and stakeholder demands.

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Fast, efficient, TNFD disclosure reporting

Our cutting-edge automation and global coverage deliver accurate and scalable nature-related insights for all asset classes, making TNFD-aligned disclosures fast, reliable, and future-proof. Find out more about integrating our platform technology into your business.

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“We are seeing more and more companies adopting natural world risk metrics every day. It’s not just about regulatory compliance or investment mitigation anymore. By taking a nature-centric, future-first approach to business, companies are seeing and feeling the effects of sustainable practices in all areas of growth.”

Vian Sharif

Founder & President, Nature Alpha

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Category one

An introduction to physical risks.

Physical risks relate to direct impacts on business of droughts, floods and the broader collapse of ecosystem services. Geoverse 2.0 delivers the most complete, real-time, risk analytics available.

An introduction to transitional risks.

Transition risks relate primarily to non-compliance with emerging nature-related regulation and changes in market demand. NatureAlpha equips financial professionals to stay ahead of this curve.

By aligning with TNFD, companies enhance transparency & demonstrate accountability

Our cutting-edge automation and global coverage deliver accurate and scalable nature-related insights for all asset classes, making TNFD-aligned disclosures fast, reliable, and future-proof.

Understanding Physical and Transitional Risks in TNFD Reporting

The Taskforce on Nature-related Financial Disclosures (TNFD) framework is rapidly becoming the gold standard for assessing and reporting nature-related risks.

Physical: Wildfires, heatwaves and air quality

As climate change accelerates, nature-related physical risks such as wildfires, heatwaves, and declining air quality are becoming increasingly severe—and financially material.

Physical: Floods, storms and extreme weather

As climate volatility intensifies, physical nature-related risks such as floods, storms, and extreme weather events are becoming more frequent and destructive.

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.

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: 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: 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.

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.

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: 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: 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: 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: 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.