Nature of Risk: A Framework for Understanding Nature-Related Risk to Business

The report establishes a framework for understanding nature-related risk to business (NRR), defining it as risks arising when changes in a company's impacts on or dependencies on nature become threats due to exposure and vulnerability. It categorizes these risks into five types: physical, regulatory and legal, market, reputational, and financial. Through a review of over 70 sources and four case studies (BP, Vale, German exporters in South Africa, and PG&E), the document demonstrates how environmental degradation can lead to severe financial losses, operational disruptions, and bankruptcy. It emphasizes that nature-related risks and climate risks are 'twin emergencies' that are mutually reinforcing.

• Nature-related risk to business (NRR) occurs when a change in a company's dependency on or impact on nature creates a threat that materializes into financial consequences based on the company's exposure and vulnerability.
• The report identifies five primary types of nature-related risks: physical, regulatory and legal, market, reputational, and financial. While the first four are viewed as threats, financial risks are typically the consequences of those threats.
• Nature-related risks and climate-related risks are interdependent; the loss of nature reduces climate resilience, while climate change accelerates the drivers of nature loss.
• Certain economic sectors are identified as having higher nature-related risk exposure, specifically food and beverages, metals and mining, oil and gas, utilities, forestry, construction, and transport, while telecommunications is consistently identified as low risk.
• Case studies illustrate the extreme financial consequences of failing to manage nature-related risks: BP faced legal costs between USD 62.59 and 144.89 billion following the Deepwater Horizon spill, and PG&E filed for Chapter 11 bankruptcy with over USD 30 billion in liabilities due to climate-exacerbated wildfires.
• The Vale case study in Brazil shows that physical risks, such as the Brumadinho dam collapse, can lead to immediate market losses, including a USD 19 billion drop in stock market value and the freezing of USD 2.3 billion in assets.
• Nature-related risks can propagate through global supply chains, as seen with German food retailers who 'import water risk' by depending on South African producers affected by drought, which caused over USD 510 million in losses for South African farmers.
• The ENCORE tool is highlighted as a means for businesses to visualize the impact of environmental change on the economy by connecting nature's goods and services to corporate risk and materiality.

APA

McCraine, S., Anderson, C., Weber, C., & Shaw, M. R. (2019). Nature of Risk: A Framework for Understanding Nature-Related Risk to Business. WWF International. https://www.worldwildlife.org/documents/1135/6ama2247cx_WWF_Nature_of_Risk_ES.pdf

Chicago

McCraine, Samantha, Christa Anderson, Christopher Weber, and M. Rebecca Shaw. Nature of Risk: A Framework for Understanding Nature-Related Risk to Business. WWF International, 2019. https://www.worldwildlife.org/documents/1135/6ama2247cx_WWF_Nature_of_Risk_ES.pdf.

Wikipedia

{{cite report |last1=McCraine |first1=Samantha |last2=Anderson |first2=Christa |last3=Weber |first3=Christopher |last4=Shaw |first4=M. Rebecca |title=Nature of Risk: A Framework for Understanding Nature-Related Risk to Business |publisher=WWF International |date=2019 |url=https://www.worldwildlife.org/documents/1135/6ama2247cx_WWF_Nature_of_Risk_ES.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mccraine2019nature, author = {McCraine, Samantha and Anderson, Christa and Weber, Christopher and Shaw, M. Rebecca}, title = {{Nature of Risk: A Framework for Understanding Nature-Related Risk to Business}}, institution = {WWF International}, year = {2019}, url = {https://www.worldwildlife.org/documents/1135/6ama2247cx_WWF_Nature_of_Risk_ES.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }