Creating Value Through Nature Risk Analysis: A Business Framework
Key Takeaways
Strategic environmental initiatives in high-value business locations can simultaneously reduce harm to nature and create business value.
Minimize your biggest environmental impacts first before investing in restoration projects to avoid greenwashing accusations.
Focus on company-wide environmental improvements rather than isolated initiatives to achieve true nature-positive alignment.
Introduction
If your company is planning on conducting a nature risk assessment, or already has, congratulations on being part of a forward-thinking organization that recognizes the connection between ecosystem health and business resilience. The critical question now becomes how you respond to your assessment results. Will you use your discoveries for small, incremental improvements, or as a catalyst for transformative change? The difference between these approaches determines not only the scale of positive impact on nature but also the magnitude of business value captured.
It is possible to complete a nature risk assessment and implement projects that, when evaluated in isolation, produce benefits to nature. For example, rewilding an area of land for a pollinator garden within a business operations site could increase the number of pollinator species, providing a boost in biodiversity at that location. However, such isolated initiatives don't necessarily translate to a corporate-wide net gain in nature. And it is this corporate-wide net gain that will truly make a difference in stemming global nature loss, which also helps address the climate crisis.
Mindset shift: more manageable than you think
Achieving a net gain in nature requires your company to ask this question: What is the future of our company in a world where we simply can’t do harm to the environment, either through our own operations, our sourcing, or our product use? This may take a corporate mindset shift. But this shift is not as burdensome as it may seem if you are already conducting a nature risk assessment – it just means taking a specific view of your results.
When you look at your aggregated corporate-wide nature assessment results, a picture will emerge of where your company is having the biggest impacts on ecosystems. Some of these results may also overlap with results from your climate risk assessments; for example, both types of analyses often identify business locations in areas of water stress. If your industry relies heavily on clean water for production processes, and the majority of your sites are located in water stressed areas, this could point to the most pressing issue to address within your operations. Water stressed areas may cease to supply your company with enough water for production. At the same time, extracting significant volumes of water from already water-stressed regions can devastate local ecosystems, harming wildlife and vegetation while threatening nearby communities that depend on reliable access to clean water resources. The area in which you are having the greatest corporate-wide negative impact on nature is the place to start.
Minimize your footprint, then maximize recovery
The first step is to reduce your company's impact on the environment, focusing first on the area that has been identified as causing the most significant damage. For water use, this means drawing less from freshwater sources that other living beings depend on, perhaps by increasing water use efficiency.
Your company may have one obvious area of improvement, or may identify a few from the assessment results.
The second step is to identify opportunities for restoration and rejuvenation that move your organization towards aligning with net nature positive outcomes. Once increased water use efficiency has been incorporated into production processes, with measurable decreases in freshwater use, what projects can your company invest in to improve water availability in the region? This could include restoring a wetland onsite, or revegetating an area within a watershed from which your company sources. As long as these projects are linked to measurable outcomes, nature positive-aligned results are possible.
The overarching principle is clear: address your most significant environmental impacts before pursuing nature positive-aligned projects. Tackling problems in the wrong order risks accusations of greenwashing, leaves your organization vulnerable to critical risks, and wastes resources on initiatives that miss the fundamental issues.
Learning from nature pitfalls and success stories
Consider the example of Anglian Water, a private water and wastewater company in the East of England. As part of an advertised nature positive-aligned program, the company created a wetland program to improve river quality. In 2022, they developed proposals to create 26 wetlands in England as part of the company’s pledge to restore river habitats across the region. However, UK Environment Agency figures from that same year showed that Anglian water was responsible for over 300,000 sewage spills.
While Anglian Water’s newly established wetlands certainly had positive environmental impacts, that ultimately didn’t matter when the company had not taken all of the necessary steps to ensure that its biggest impacts -- water pollution -- were being effectively addressed and remedied. In 2023, the company was fined £2.65 million ($3.3 million) for allowing untreated sewage to overflow from a water recycling center five years prior, the most substantial fine ever levied for environmental violations in eastern England. In 2024, the company was fined again for non-compliance with environmental permit conditions at a wastewater treatment center. This landmark ruling set a precedent as the Environment Agency's first prosecution of its kind against a water company for regulatory violations.
Now consider Holcim, which manufactures building materials. Focusing on their three most significant business segments, Holcim selected two geographical areas with sites that had material impacts on nature, and where they already had multi-stakeholder initiatives in place. Recognizing that water use was one of their biggest impacts, Holcim identified freshwater quantity targets for their direct operations -- a 39% reduction of freshwater withdrawals in direct operations within a water basin in Mexico, and are currently working on upstream targets as well once better data is available. By triangulating the greatest areas of nature risk with high value business locations, they were able to capture business value and also decrease the harm they were causing to nature.
Holcim’s targets are aligned with Science-based Targets for Nature (SBTN). SBTN is a rigorous framework that ensures the goals of nature projects are aligned with global sustainability goals and ecological thresholds. While SBTN may not be an option for all companies, the approach of first ceasing harm and then implementing nature positive-aligned strategies can be applied by any organization.
True nature positive alignment
The most progressive businesses today understand that true nature positive alignment isn't about choosing between preventing damage or investing in restoration—it's about doing both in strategic harmony. By shifting resources to prevent harm before it occurs, and then taking subsequent steps to heal what's already been damaged, companies don't just reduce their environmental liability — they position themselves as responsible stewards of our shared ecosystems while unlocking new sources of business value.
