The Nature of Risk: A Framework for Understanding Nature-related Risk to Business

Scientific consensus is building around risks to business from the loss and degradation of nature, or ‘nature-related risks’. These risks are not adequately addressed by businesses, and to be addressed, they need to be considered together with climate-related risks. The two are inextricably interlinked because climate change drives change in nature, and change in nature drives climate change.

The terminology used in this report draws on both nature- and climate-related risk to facilitate a unified approach. This report and framework aim to catalyze the incorporation of nature-related risks into private-sector decisions in a manner that facilitates sustainable development at all scales.

The report includes:

1. A literature summary of existing work on the topic that outlines how nature-related risk is not adequately accounted for by businesses.
2. A synthesis framework for how nature-relate risk emerges that builds on the many existing frameworks and that brings together understanding of natural capital and climate-related risk.
3. A typology based on analysis of existing literature which serves as a proxy for risks that are most widely acknowledged as high importance.
4. A set of case studies—examples of businesses facing consequences due to nature-related risk.