Overview
Understanding how companies rely on natural ecosystems is becoming increasingly important for financial markets. This project develops one of the first systematic, firm-level approaches to measuring how businesses depend on nature across their entire value chains. Unlike physical climate or biodiversity risk, nature dependence captures the degree to which companies rely on ecosystem services, such as water regulation, pollination, soil productivity or natural materials, to deliver their products and services. This research contributes a new, scalable metric that helps investors evaluate hidden exposures to nature-related risks.
An interview with Alexandre Garel.
Authors
Alexandre Garel
Audencia Business School
Arthur Romec
Toulouse Business School
Zacharias Sautner
University of Zurich and Swiss Finance Institute
Alexander F Wagner
University of Zurich and Swiss Finance Institute
Project aims
The central goal of the project is to quantify nature dependence at the firm level, capturing dependencies that occur not only in a company’s direct operations but also in its upstream suppliers and downstream activities. Nature dependence is conceptualised broadly as the extent to which a company relies on nature for its business model, either through materials, ecosystem functions or ecological conditions.
This objective is pursued through 4 main steps:
1
Structured metric of corporate nature dependence
Develop a transparent, standardised measure of firms’ dependence on nature using publicly available data.
2
Global coverage and comparability
Apply this metric across global listed companies to generate comparable nature-dependence scores.
3
Sectoral and firm patterns in nature reliance
Map how nature dependence varies across sectors and firms.
4
Investor-relevant insights on financial risk
Identify where nature-related disruptions are most likely to translate into financial risks for investors.
Key insights
1
Nature dependence emerges across all sectors but with strong variation
The analysis finds that nature dependence is distributed across all parts of the corporate value chain, not limited to traditionally resource-intensive industries. Many companies show upstream dependence through raw materials and others exhibit strong downstream dependence through the way their products are used or disposed.
Broadly, the study observes that:
- some sectors that appear low impact in environmental footprint metrics still show high dependence because they require nature-derived materials or ecosystem services indirectly
- resource-intensive sectors such as agriculture, food and beverages, forestry, extractives and utilities score highest on nature dependence
- service-oriented sectors also show meaningful dependence, especially through supply chains, for example, retail, consumer goods and technology hardware
2
The methodology provides a scalable, replicable benchmark
The metric merges:
- economic activity classification
- ENCORE dependency materiality ratings
- distribution of revenue per economic activity
This enables the construction of firm-level dependency scores using standardised rules rather than opaque proprietary modelling. The transparency and scalability are intended to support market-wide adoption, similar to early climate-risk metrics.
3
The measure complements but is distinct from nature impact indicators
Crucially, the study differentiates dependence from impact. A company can be highly dependent on nature without causing significant ecological degradation. Conversely, a firm may have large negative impacts but low dependence. These distinctions matter for financial risk modelling, stewardship and regulatory compliance.
Why this matters for investors
Nature dependence is a source of financial risk
Companies that rely on nature, whether directly or through supply chains, face risks from: ecosystem degradation, regulation of land/resource use, water scarcity, conflicts over natural resources, and environmental controversies. The study shows these exposures are far broader than previously assumed, meaning investors may be holding hidden nature-related risks.
It enables better portfolio-level analysis
Because the metric is constructed at the firm level, it can be aggregated for: portfolio screening, sector-level dependence mapping, benchmark design and engagement prioritisation. Investors can identify which holdings are most exposed and where vulnerabilities cluster.
Supports regulatory and disclosure expectations
With frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) promoting nature-related risk disclosure, the study provides a practical foundation investors can use to anticipate future reporting requirements and integrate nature into risk modelling.
Conclusion
This project demonstrates that corporate reliance on natural ecosystems is widespread, financially relevant and often hidden within value chains. By developing a transparent, scalable metric of firm-level nature dependence, the research reveals exposures that traditional impact-based ESG metrics miss. The findings show that dependence spans all sectors and occurs upstream, operationally and downstream. For investors, these insights enable more accurate risk assessment, stronger stewardship and better preparation for emerging disclosure standards, positioning nature dependence as a critical component of forward-looking financial analysis.
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Related paper
Romec, A., Garel, A., Sautner, Z. and Wagner, A. (2026) “Firm-level nature dependence” Review of Finance