A growing number of institutional investors are demanding that companies disclose their exposure to nature-related risks, and they have three clear expectations: a biodiversity strategy, transparent disclosure, and capital alignment. The pressure is mounting as global biodiversity loss accelerates and regulatory frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) gain traction.
Mindy Lubber, CEO of Ceres, a nonprofit focused on sustainability, outlines the three steps companies cannot afford to ignore in their nature plans. First, companies must develop a robust biodiversity strategy that identifies dependencies and impacts on ecosystems. Second, they need to publicly disclose nature-related risks and opportunities using emerging standards such as the TNFD. Third, they must align capital allocation with nature-positive outcomes, integrating biodiversity into investment decisions.
The stakes are high. In 2022, the World Economic Forum estimated that more than half of global GDP—$44 trillion—is moderately or highly dependent on nature. Yet a 2023 report by CDP found that only 17% of companies disclosing environmental data have a public biodiversity commitment. This gap represents both a risk and an opportunity for early movers.
Leading asset managers such as BlackRock, State Street, and Vanguard have increasingly voted against directors at companies failing to address climate and nature risks. The TNFD, launched in 2021, has released its final recommendations, with 20+ countries signaling intent to adopt them. The European Union's Corporate Sustainability Reporting Directive (CSRD) also requires biodiversity disclosures from 2025.
Lubber emphasizes that waiting is not an option. "Investors can no longer afford to ignore nature loss. It is a systemic risk to portfolios," she says in the Forbes article. The steps are not merely compliance exercises—they are strategic levers for long-term value creation.
The broader implication is that nature risk is becoming a cornerstone of corporate governance, analogous to climate risk a decade ago. Companies that fail to act may face capital outflows, reputational damage, and regulatory penalties. Those that embrace nature plans can build resilience, attract patient capital, and differentiate themselves in a crowded market.
Looking ahead, the TNFD framework is expected to become mandatory in several jurisdictions by 2027. Investors will increasingly use nature-related data to inform engagement, voting, and portfolio construction. The coming year will see the first wave of TNFD-aligned disclosures from early adopters, setting the benchmark for the rest of the market.
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3 Steps Not To Ignore In Nature Plans
The key steps investors want companies to take on nature disclosure — from biodiversity strategy to aligning capital — and why waiting isn't an option."
Mindy Lubber, Contributor
Forbes
2 min read
7/10
Key Takeaways
- More than half of global GDP ($44 trillion) is moderately or highly dependent on nature, per the World Economic Forum (2022).
- Only 17% of companies disclosing environmental data to CDP have a public biodiversity commitment (CDP, 2023).
- The Taskforce on Nature-related Financial Disclosures (TNFD), formed in 2021, released its final recommendations in September 2023, with over 20 countries signaling adoption.
- The EU's Corporate Sustainability Reporting Directive (CSRD) mandates biodiversity disclosures from 2025.
- BlackRock, State Street, and Vanguard have voted against directors at companies with inadequate nature risk management (Ceres, 2024).
"Investors can no longer afford to ignore nature loss. It is a systemic risk to portfolios."
"Companies that wait will find themselves playing catch-up as regulations and investor expectations harden."
"The three steps—strategy, disclosure, capital alignment—are the minimum for credibility."
How to develop an effective nature plan for investors
Steps to create a nature plan that meets investor expectations and prepares for regulatory disclosure requirements.
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1
Develop a biodiversity strategy
Identify the company's dependencies and impacts on ecosystems. Set clear targets for reducing biodiversity loss and contributing to nature restoration. Engage with local communities and scientists to map key risks.
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2
Publicly disclose nature-related risks
Adopt the TNFD framework to report nature-related risks and opportunities. Ensure disclosure covers governance, strategy, risk management, and metrics. Pilot the framework with a small set of material issues before scaling.
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3
Align capital with nature-positive outcomes
Integrate biodiversity considerations into capital allocation decisions, such as project financing, acquisitions, and R&D. Issue green bonds or sustainability-linked instruments tied to nature targets. Track and report on capital deployment for nature outcomes.
Frequently Asked Questions
Nature plans are corporate strategies that address biodiversity protection, ecosystem services, and nature-related risks. They typically include a biodiversity strategy, disclosure of dependencies and impacts, and alignment of capital with nature-positive outcomes.
Investors care because nature loss poses systemic risks to portfolios. A World Economic Forum report estimates over half of global GDP depends on nature, and regulatory frameworks like the TNFD and CSRD are pushing for mandatory disclosures.
The Taskforce on Nature-related Financial Disclosures (TNFD) is a global initiative that provides a framework for companies to disclose nature-related risks and opportunities. It was launched in 2021 and released final recommendations in 2023.
Companies can align capital by investing in nature-based solutions, setting biodiversity targets, integrating nature into financial decision-making, and mobilizing green bonds or sustainability-linked loans for nature-positive projects.
The three steps are: 1) Develop a biodiversity strategy that identifies dependencies and impacts; 2) Disclose nature-related risks using TNFD standards; 3) Align capital allocation with nature-positive outcomes.
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www.forbes.com
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