The business case for reversing deforestation and other nature loss

Flames and smoke curtain of a forest fire in the Brazilian Amazon.

Current state of nature loss

Nature loss is happening at an alarming rate. Human activity has already altered 70 per cent of all ice-free land. Up to 40 per cent of the world’s land is now degraded. And this destruction of forests, wetlands and savannahs means that today up to one million species are threatened with extinction.

Looking at forests in particular, globally we have destroyed one-third of forests, and the rate of destruction remains high: deforestation in the Amazon, the world’s largest rainforest, is at its highest level in 15 years.

City skyline at night

What are nature-related risks

Nature loss and climate change are an interlinked challenge that poses significant financial risks to business and finance. As companies and financial institutions depend on and impact nature, the destruction of that nature leads to risks.

As defined by the Taskforce of Nature-related Financial Disclosures (TNFD), those nature-related risks can be broken down into physical, transition (including reputational risks) and systemic risks.

In addition to direct risks, protecting and restoring nature is essential to solving the climate crisis. Natural climate solutions can provide over one third of the climate mitigation we need between now and 2030.

Marie Jacquemin, Greenpeace

The social dimensions of nature loss

Nature loss impacts the rights of Indigenous peoples and Local Communities, and Indigenous peoples and Local Communities are essential to protecting and restoring nature. Indigenous peoples, who comprise 5% of the world’s population, steward 80% of the world’s biodiversity.

Companies and financial institutions assessing and managing their nature-related risks must integrate human rights into their nature-related policies and commitments.

Deforestation – an entry point for nature-related risks

For companies and financial institutions looking at their nature-related risks and opportunities, forests can serve as an entry point for assessing and managing risks and opportunities across the other realms of nature – ocean, freshwater and other land.

Deforestation is a concentrated, solvable nature crisis. Over two thirds of deforestation worldwide is driven by agricultural expansion for a handful of globally traded commodities like beef, soy, and palm oil. This commodity-driven deforestation is not inevitable: commodities could be produced sustainably.

Data on deforestation is also more advanced than for other realms of nature.

The combination of advanced data and a concentrated problem makes deforestation an effective entry point for assessing and managing nature-related risks.

City port unloading crates of cargo

Using data to manage risks

More and better nature-related data enables companies and financial institutions to change their policies and practices.

Companies can use nature-related data to identify how their supply chains may be driving nature loss, so they can take informed action.

Financial institutions can use nature-related data on the companies in which they invest in and loan to, to assess if their capital is driving nature loss. They can then take informed decisions to engage or divest.

While data gaps remain, sufficient data exists for companies and financial institutions to begin identifying their impacts on nature.

How to get started

Financial institutions


  • Set and implement strong deforestation commitments and policies covering deforestation, conversion and associated human rights abuses.
  • Follow the Accountability Framework Initiative guidance on targets, accounting and disclosure for deforestation and conversion-free supply chains.
  • Use Trase to increase transparency, meet sustainability commitments, and de-risk supply chains.
  • Engage with the TNFD, which is developing a framework for nature-related risk and opportunity management and disclosures. A series of prototypes of the framework are open for feedback and pilot testing until 1 June 2023, before the full framework launches for market adoption in September 2023. (Global Canopy is running pilots as an official TNFD piloting partner.)

Read more

Global canopy world map dots graphic

Use our tools to assess and manage nature risk

Global Canopy offers a range of initiatives that enable financial institutions and companies to assess and manage nature-related risks, with a particular focus on risks linked to deforestation.

For support on how our tools can help you, get in touch with us at [email protected].

Follow us on LinkedIn and Twitter, and join our mailing list to receive the latest updates and insights from our work and tools.

Copy link
Powered by Social Snap