Know Your Nature Risks and Dependencies

If you are preparing your sustainability report – perhaps against TNFD or current CSRD standards – you will know that assessing your nature-related dependencies is a vital part of the process.

Hopefully you will recognise that, in principle, nature is essential for business and for its future growth and resilience. However, at ANIMONIDAL we know that identifying specific dependencies for your own businesses can be challenging.

In this blog, we explain what nature-related dependency analysis is and why it is essential to reducing your business’ nature risks.

What is nature?

Nature is a collective term for all living things on Earth (biodiversity) and their interaction with the physical environment (e.g. sunlight, water), as well as the forces, processes and outputs that result. Many of these outcomes benefit people and our societies in the form of:

• Natural assets – raw materials such as freshwater, soils, minerals, and species of animal and plant.
• Ecosystem services – processes that deliver benefits including pollination, soil formation, disease control, air and water purification, and carbon storage.

Nature exists everywhere – not only in green spaces – and every economic sector relies on it.

Why dependencies matter

By understanding how your business depends on nature (e.g., for raw materials, water or pollination), you can identify potential risks if those natural resources or ecosystem services decline. Nature risk can cause material shortages, raise operational costs or disrupt supply chains, and can have a direct impact on financial performance. Understanding and disclosing nature dependencies is also a crucial aspect of corporate governance with investors, consumers and regulators increasingly expecting businesses to address their dependencies (and impacts) on nature.

Every economic sector has some degree of direct and indirect dependency on nature. Under current scenarios, over half of the world’s total GDP is at moderate or severe risk due to nature loss. Travel & Tourism is one of six sectors with more than 80% of its goods and services highly dependent on nature.

Identifying the dependencies

A full dependency analysis starts with a comprehensive assessment of where your business interacts with nature, covering direct operations, suppliers, and customers. This should include examining your upward and downward value chains, tracing goods back to natural sources, and mapping out ecosystem services that support activities – from providing raw materials to enabling product delivery.

To take an example from the travel & tourism sector, a tour operator will likely work with many hotels and excursions to supply their tours. These suppliers will depend on nature for the food, energy and furnishings in the hotels and the presence of wildlife or predictability of weather needed for the excursions. But beyond this, tours can also be severely disrupted by ‘natural’ events like flooding, which can be made more likely or severe by deforestation or other nature-damaging activities on higher ground. Sustainable local fish supplies can depend on fishing practices but also on habitats that fish need to breed and develop, such as coral reefs and mangroves. This web of causes and effects need to be understood for critical dependencies to be identified.

Material Dependencies

Once you have identified your dependencies on nature, you need to determine which are most crucial to your operations and financial performance. This will help you focus attention on the natural assets that matter most to your business.

Managing Nature Risk

With the global state of nature in ongoing decline, nature loss will become an increasing challenge (and risk) for businesses across all economic sectors – particularly those like tourism that are highly dependent on it. To quantify the risks associated with your dependencies you need an understanding of the current state of nature, and expected changes to it, in the places that your dependencies occur. Issues like climate change or water scarcity could affect your business in any of these locations, presenting risks to your operations, supply chain, and financial performance. This includes impacts on local communities, which could have a knock-on effect on business operations and reputation.

Identifying opportunities

Understanding your nature dependencies offers an opportunity to improve operations and reduce your nature risks. It can even highlight cases where you can create additional value by leveraging nature-based solutions. Businesses need to explore the many opportunities to reduce their environmental impacts, enhance resource efficiency, and develop new practices if they are to pursue a nature-positive approach.

Planning for a nature positive future

TNFD’s LEAP approach (Locate, Evaluate, Assess, Prepare) provides an integrated process for the identification and assessment of nature-related issues. It is designed to guide any business in mapping operations and value chains, assessing dependencies and impacts, and evaluating nature-related risks and opportunities.

The Bottom Line

Ultimately, if you haven’t done a proper dependency assessment, any environmental policy you make is based on assumptions and guesswork. To create a policy commitment that addresses your impacts, your opportunities and, most importantly, your nature risks, you need to know what those are. Otherwise, important dependencies on nature could be slipping through the net – unnoticed and not addressed. And that could affect your bottom line.

Daniel Turner

Director of Strategy, ANMONDIAL

Find out more …

• Full guidance on the LEAP approach can be found on the TNFD website
• ANIMONDIAL is here to help you with your dependency analysis – our team of experienced tourism and biodiversity professionals can guide you through the detailed process to provide the insight you need for policy and strategy development and robust reporting and disclosure
• NATOUR IMPACT is our online evaluation tool, specifically created to help travel & tourism businesses assess, monitor and disclose their nature-related risks and impacts, and identify and prioritise actions to respond to them