A new report launched today at London Climate Action Week highlights the significant financial risks that nature loss poses to businesses and the wider economy. It calls for a more coordinated approach in identifying, assessing, and managing the dependencies, impacts, and risks associated with environmental degradation.
The Environmental Change Institute (ECI), as part of the Resilient Planet Finance Lab, co-authored the report with the Taskforce on Nature-related Financial Disclosures (TNFD) and Global Canopy. The report — Evidence Review on the Financial Effects of Nature-related Risks — brings together data from hundreds of sources and calls for urgent action to better understand and manage the links between nature degradation and financial impact.
The study is based on three main sources:
- A Nature-related Financial Risks Database containing over 600 examples from more than 360 sources spanning 17 physical, 5 transition and 6 systemic risks
- Interviews and disclosures from companies and financial institutions
- Stakeholder feedback from a recent workshop and ongoing engagement
The report presents strong evidence that nature-related risks are already having measurable financial impacts.
These include:
- Water scarcity is increasing costs, disrupting operations and forcing shutdowns in some regions
- Liability risks are leading to litigation and fines
- Reputational risk from deforestation or pollution is negatively affecting firm value
- Invasive alien and native species disruptions are threatening infrastructure and food security
However, the report also notes that full causal chains — linking environmental damage through to financial outcomes — are rarely mapped in detail. This highlights the need for further research, particularly on how these risks move through the economy.
Lead author Dr Jimena Alvarez, Research Associate, ECI, said:
Our report shows that the evidence of financial effects of nature-related risks for businesses and the economy is extensive spanning a range of scales, sectors, hazards, time horizons and types of effects.
Multi-stakeholder action is needed from academia, data providers, corporates and financial institutions and standard setters and regulators to advance the assessment, management and disclosure of financially material nature-related risks. Acting now can provide short-term benefits whilst also steer away from locking in systemic risks.”
The report recommends better collaboration between researchers, companies, regulators and financial institutions to assess and manage these risks more effectively. It also supports stronger disclosure practices and improved data availability to help guide investment and policy decisions.
The Nature-related Financial Risks Database is now open for public consultation. Stakeholders are invited to give feedback and suggest further evidence until 31 December 2025.
Read the full report: Evidence Review on the Financial Effects of Nature-related Risks