Troubleshooting Q&A: Embedding Nature into Business Finances

A practical starting point is to treat nature in the same way as other strategic financial drivers – by asking how it could affect financial performance, financial position, cashflows and resilience.  

All businesses depend on nature, for example through the provision of water and raw materials, protection from flooding, pollination of crops, and soil health. When those dependencies are disrupted, this creates physical risks, the impacts of which can appear through familiar financial channels: higher costs, reduced revenues, supply chain disruption, or asset impairments.

As regulation, market expectations and investor scrutiny evolve, this also creates transition risks. At the same time, opportunities also exist to improve productivity, secure supply and strengthen competitiveness.

Reframing nature as a financial issue means shifting the question from “what do we need to disclose?” to “how can we anticipate and manage the effects of nature-related issues on our financial performance, financial position, cashflows and resilience over time?” This brings nature into strategy discussions, risk management and capital allocation – where finance teams already play a central role. 

With the growing number of frameworks and tools available, it can be tempting to start by choosing a methodology. In practice, a more effective entry point is risk identification. Asking where nature‑related factors could realistically affect the business helps narrow attention to what truly matters.

Asking the question “what could realistically go wrong – or create opportunity?” can help to surface priority areas. This might include reliance on scarce natural inputs, exposure to specific geographies, concentrated suppliers, or assets whose viability depends on local environmental conditions. This approach mirrors how risks are identified and prioritised in other areas of finance and audit.

Crucially, finance teams should not do this in isolation. Working with sustainability, operations and procurement colleagues helps ensure that relevant data, assumptions and operational realities are properly considered and understood. The business implications can then be assessed using familiar finance concepts – such as whether an issue could influence decisions by senior management, investors or lenders – allowing effort to be focused on the most important issues for the business. 

Nature‑related information is often location‑specific and technically complex. A useful discipline is to keep asking: what does this mean for the business?

Finance teams have the skills to make these connections. For example:

Changes in ecosystem health can affect yields, volumes, operating costs or asset viability. 

Water scarcity may increase production costs or trigger relocation and impairment risks. 

Loss of ecosystem services may require additional investment to maintain output. 

These impacts may not appear as standalone line items, but they could influence financial position, financial performance and cash flows over the short, medium and long term – and therefore, resilience and long term value creation.  

Not all insights need to be fully monetised to inform decisions. Qualitative and quantitative assessments can play an important role in informing risk identification and management, scenario analysis and investment decisions. 

Collaboration is critical: working closely with sustainability, operations and procurement teams helps build a shared understanding of what the data is showing and how it might translate financially. Finance teams add value by clearly communicating these implications in plain, decision focused language for senior leaders.

Alignment is most effective when it builds on existing finance and risk processes rather than creating parallel systems. A practical starting point is to review current materiality assessments, risk registers and sustainability disclosures if already available – to identify where nature‑related issues are already being considered.

From there, the focus shifts to connectivity: linking nature‑related risks and opportunities to financial impacts and tracking them through existing finance processes – such as forecasting, impairment testing, capital allocation or risk management. Monitoring a small number of relevant indicators can help signal changes in exposure and inform judgement over time.

It is also important to look beyond downside risks. Nature‑related opportunities – such as efficiency gains, innovation or enhanced resilience – can be equally relevant to decision‑making. When these connections are embedded into strategy, planning and risk management, external reporting becomes a natural output rather than a separate compliance exercise.

The most consistent advice is to start small and focus on the highest priority nature-related issues. A fully formed nature strategy is not needed from day one. Instead, finance teams can begin by identifying a small number of priority risks or opportunities where nature could have a meaningful financial impact, drawing on guidance from organisations such as ICAEW and the International Sustainability Standards Board (ISSB).

Early engagement with colleagues is critical. Many organisations already have relevant work underway within sustainability, operations or procurement teams. These conversations often surface existing data, insights or pilots that finance teams can build on rather than duplicating effort.

Piloting approaches – for example in relation to a key asset, supply chain or investment decision – helps translate concepts into practice. Over time, these lessons can be scaled more broadly across forecasting, investment appraisal, risk assessment and performance monitoring.

Finally, finance teams should not wait for perfect data. Financial decisions are routinely made under uncertainty. Using good enough information to inform judgement is often more valuable than delaying action, with capability and confidence improving through application over time.