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Finance for a sustainable future

A new bottom line: Nature’s financial ripples

It isn’t new to recognize the significance of environmental factors on a business’s operations; companies need to prepare for future impacts and adapt operations because of how their business can affect nature. However, there is a growing need to quantify the financial implications of nature-related financial impacts (NRFIs) and dependencies and embed that knowledge into enterprise risk and resource planning. Embracing this approach may position an organization to respond proactively and unlock new opportunities for resilience and growth.

Nature as a factor: Risks and opportunities

Accounting for nature: Levels of maturity

Carrying these principles into practice may not happen easily or quickly. Organizations may find themselves at different levels of maturity as they move toward building nature-related impacts into their planning.

Accounting for nature-related financial impacts

Areas of focus:

Eyes and ears: Sensing, measuring, and analytical capabilities

Due diligence: Sourcing confirmation, risk assessments, mitigation measures

Regulatory compliance: Awareness of new and existing rules, materiality, potential penalties

Pursuing the positives: Identifying grants and credits and using AI and analytics to locate operational advantages

A broader view

Is it problematic to view the natural world through a financial lens? Or is it irresponsible not to? A CFO who integrates a broader understanding of environmental factors into both risk and opportunity assessments has a chance to achieve more effective financial outcomes. Failing to adopt this approach might mean falling short of emerging requirements, material financial risks, and missed opportunities. This can be a new lens on existing strategies: Resources are finite, adapting to the future is important, and preparing for tomorrow often starts today.

Ready to build nature’s effects into your strategy and plans?