From risk to resilience: Why nature must be a boardroom concern
Boards that embed nature into strategy, risk and investment decisions will be better positioned to navigate volatility and regulatory change.
If climate change brought the environment into the boardroom, nature is what will keep it there. Directors are increasingly expected to understand and oversee climate- related risks and opportunities. Many have made progress – particularly in response to evolving disclosure and trading requirements and growing investor and public scrutiny – but capability across the sector remains uneven and still maturing.
Environmental management is not new. Many organisations have long monitored their impacts on land, water and ecosystems, often through sustainability teams or compliance frameworks. But what is shifting is the recognition that nature is no longer a secondary concern. It is now central to understanding climate risk, supply chain stability, market access and long-term value.
Nature-related risks and dependencies are becoming more visible and material, requiring directors to elevate oversight from reactive compliance to strategic governance.
Nature-related threats – from water scarcity and biodiversity loss to deforestation and soil degradation – are no longer abstract or distant. They are direct business risks with financial consequences and implications for long-term strategy, resilience and reputation. Yet for many boards, nature remains underdeveloped in the risk register.
These environmental shifts are reshaping supply chains, tightening regulatory expectations, influencing investor decisions and affecting the viability of business models. However, nature is also more than a risk to be managed – it is a strategic asset and a source of productivity and resilience.
Performance is increasingly linked to how well organisations manage their relationship with nature. According to the World Economic Forum’s 2024 report Champions for Nature: Raising Ambition, Sustaining Impact, more than half of global GDP – more than US$44 trillion – is moderately or highly dependent on nature and its services, including freshwater, pollination, climate regulation, fertile soils and coastal protection.
These services have long been treated as limitless and external to business, but their decline is now showing up in disrupted operations, constrained resources, rising insurance costs and reputational risk. This is not just a primary sector issue. Manufacturing, infrastructure, tourism, logistics and finance all rely on natural systems, whether those dependencies are visible or not.
A 2024 McKinsey analysis of Fortune Global 500 sustainability reporting found that 45% of companies had some form of nature-related target or ambition – up from just 5% in 2020. Yet only a minority have embedded nature into governance structures, risk frameworks or executive accountability.
Agriculture offers a compelling illustration. As Deloitte’s Future of Sustainable Agriculture report outlines, the sector contributes around 24% of global greenhouse gas emissions, driven by deforestation, livestock methane, fertiliser use and fossil-fuel-powered machinery.
At the same time, it is highly vulnerable to ecosystem decline. Weather volatility, water shortages and degraded soils are already reducing yields and threatening food security. Yet the sector is also leading innovation.
Regenerative practices such as cover cropping, rotational grazing and organic fertilisation are delivering measurable benefits, such as improved profitability, reduced input costs, lower emissions and healthier ecosystems. What is emerging is a nature-positive model that aligns commercial performance with ecological restoration.
“This complexity can make nature harder to quantify or disclose. But it reinforces the need for board literacy, cross-functional insight and thoughtful engagement with emerging standards.”
Nature as a solution, not just a risk
This signals a broader governance shift. Just as boards have begun lifting their climate capability, they must now develop fluency on nature. Unlike climate, which is often framed around emissions and energy, nature is complex and multi-dimensional. It encompasses land, water, air, species and ecosystems, each with distinct pressures, metrics and governance challenges.
This complexity can make nature harder to quantify or disclose. But it reinforces the need for board literacy, cross-functional insight and thoughtful engagement with emerging standards.
In New Zealand, nature loss is already affecting board-level concerns. The Parliamentary Commissioner for the Environment’s Are We Building Harder, Hotter Cities? report highlighted how declining urban green space is driving up temperatures, straining infrastructure and increasing public health risks.
Since 1980, Auckland’s green space per person has dropped by more than 30%, and Hamilton’s by 20%, largely due to infill development and larger housing footprints. The companion report, Urban Ground Truths, highlights how soil degradation and overlooked ecosystem changes are compounding these issues. Community knowledge and lived experience will be essential to making sound environmental decisions.
Just as nature poses risks, it also offers solutions. Nature-based approaches, such as wetland restoration, regenerative agriculture, riparian planting, urban greening and forest conservation, are gaining traction for their ability to deliver multiple co-benefits. These include emissions reduction, flood protection, carbon sequestration, temperature regulation, biodiversity enhancement and improved wellbeing.
These interventions are often more adaptable, cost-effective and publicly supported than engineered alternatives, especially in sectors such as utilities, construction and land management.
According to the Champions for Nature report, investing in nature- based solutions is increasingly seen as a strategic imperative – one that strengthens resilience, supports long- term prosperity and enhances an organisation’s credibility as a forward- looking market leader.
These solutions can also unlock revenue through biodiversity credits, ecosystem service payments or climate-aligned finance. But like any strategic initiative, they require rigorous governance. Boards must ensure claims are science-based, measurable and aligned with community outcomes. Without oversight, the risk of greenwashing rises – undermining trust and eroding long-term value. Effective stewardship ensures nature-positive ambition delivers real impact.
Boards must ensure nature-related initiatives are grounded in evidence, embedded in strategy and subject to oversight. Directors should ask:
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- What natural systems does our business rely on?
- How might those systems shift in future scenarios?
- Are we positioned to manage disruption, or are we still operating on outdated assumptions about ecological stability?
These aren’t abstract questions. They connect directly to risk registers, capital allocation, procurement and stakeholder expectations. Boards that embed nature into scenario planning, disclosure and investment will be better equipped to navigate volatility and regulatory change. They must also assess whether they have the right capability at the table. Do directors and executives have the knowledge and support to engage confidently with nature-related complexity?
This is where cross-sector collaboration becomes critical. Nature-based projects are place-based and partnership-driven. They require coordination across business, iwi, local government, science and community.
For boards, this means understanding the ecosystems in which they operate, not just physically, but socially and economically. Environmental outcomes cannot be delivered in isolation. Shared value depends on shared vision.
Some boards are already making progress embedding nature into transition planning, stress-testing assumptions, integrating natural capital into procurement and investment, and investing in director development.
These efforts remain early and uneven, but they reflect a growing understanding that governance must evolve to reflect the systems on which it depends. Nature is no longer just a sustainability issue: it is a material factor in performance, resilience and value.
The message is clear: nature is a core strategic issue. It intersects with climate, financial, operational and reputational risk. It underpins market access, capital flows and community trust. And it offers a rare alignment of risk mitigation and innovation. Whether through ecosystem-based infrastructure, regenerative value chains, or biodiversity-linked finance, nature can help future-proof organisations in a world of accelerating change.
A director’s role is to steward long-term value. That means asking not just how our organisations impact nature – but how nature impacts us and what our dependency on it is. The answer is more profound than many boards may realise.
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First published in Boardroom Magazine Winter 2025.
