The nature of risk: a framework for understanding nature-related risk to business

The recent Global Assessment released by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) supplied clear indicators of the loss of nature and the decline of ecosystem services—valued in the hundreds of trillions of dollars—which provide the basic building blocks of the global economy, from water to energy, and food to carbon sequestration. This decline in ecosystem services is even more important as climate-related risk becomes a growing concern for business and finance: In organizations from central banks to individual businesses, climate-related risks have quickly risen to the top of the corporate mindset. Climate-related risk and nature-related risk are not separate entities; the loss of nature decreases climate resilience, and climate change exacerbates drivers of nature loss. However, action on nature-related risk has been fragmented, in part because of an array of competing concepts and frameworks for understanding the financial materiality of nature and its services. This report provides a synthesis framework for nature-related risk, consolidating work from over 70 sources.