Nature Positive Corporate Assessment Guide for Financial Institutions 2025

As a next step, financial institutions can drill down on specific sectors of the heatmap and determine the exposure of clients to dependencies and impacts of specific financial or corporate assets – also called “asset tagging”.33 Based on these findings, financial institutions can prioritize engagement with companies in sectors recognized for their significant impacts or dependencies on nature. This engagement should focus on understanding the assessments that have been conducted to identify material nature impacts and dependencies, as well as on understanding the potential financial implications for the business. For example, financial institutions might want to discuss how companies in the agricultural sector would respond in a water stress scenario that would impact food supply. Metric types TABLE 2 Impact and dependency metrics Risk and opportunity metrics –Impact driver metrics capture how companies’ operations are impacting nature and are categorized based on the five drivers of nature change.35 Examples of impact driver metrics include the extent of land use change in square kilometres (km ²) (TNFD) or total use of land area in metres or hectares (CSRD). –Metrics for the state of nature capture changes to the ecosystems impacted by the companies’ operations and help assess whether a company’s actions are contributing to nature’s recovery or deterioration. Terrestrial ecosystem conditions (Nature Positive Initiative36) are an example of such metrics. State of nature metrics are complementary to impact driver metrics. –Dependency metrics capture how a company’s activities depend on ecosystem services (e.g. use of water). –These metrics assess the level of risk or opportunity within the organization.37 –These might be opportunity metrics – for example, the value of operational cost savings associated with nature-related management (TNFD) – or risk metrics – for example, the anticipated financial effects of material risks and opportunities arising from biodiversity- and ecosystem-related impacts and dependencies (CSRD). Table 3 shows a set of nature metric disclosures that are commonly requested by leading initiatives and regulation. The table highlights that a high level of consensus has already been reached in initiatives and regulation regarding the metrics to disclose. Financial institutions seek the following information from companies when assessing this indicator: –Location-specific key metrics can be used to quantify the company’s impacts and dependencies on material nature-related issues. Leading initiatives such as CSRD, TNFD, CDP or GRI have published core metrics for nature and biodiversity as well as interoperability mappings of these metrics, increasing financial institutions’ ability to compare and benchmark companies within and across sectors. –Location-specific key metrics can be used to assess a company’s risks and opportunities stemming from identified impacts and dependencies. –Historical trends for key nature metrics, such as Ecoregion intactness scores over previous years, can be used to assess a company’s performance over time. Existing frameworks that companies may be using: –CSRD/ESRS: Disclosure standards provide requirements on disclosure for nature- related metrics.38 As location- specific data becomes available, nature metrics will increasingly be used to evaluate the scale of a company’s impact and dependency on nature.2.2 Indicator 2: Nature metrics As location-specific data becomes available, nature metrics will increasingly be used to evaluate the scale of a company’s impact and dependency on nature, and will serve as benchmarks for both measuring companies’ progress over time and comparing companies. However, like carbon emissions, it will take time for companies to reliably quantify progress benchmarks across the entire value chain. Nature is multidimensional and, as such, there is no single metric that captures its complexity. Nature change is driven by five impact drivers – climate change, land, freshwater or ocean use change, resource use or replenishment, pollution or pollution removal, and invasive species introduction or removal34 – that financial institutions anticipate companies will increasingly report. Each impact driver can be associated with several metrics like water, soil or non-greenhouse gas (GHG) air pollutants, and companies may report metrics for the nature loss and changes in ecosystem services that result from impact drivers. For dependencies, companies may report the metrics for the changes in the state of nature or ecosystem services on which they depend. Nature Positive: Corporate Assessment Guide for Financial Institutions 23