Definitions of opportunities

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TNFD's definitions of opportunities

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Introduction

An understanding of nature-related dependencies and nature impacts, as well as shifting demand-side factors, such as consumer preferences and regulation, can inform not just corporate and investor risk management, but also growth strategy and the pursuit of commercial opportunities. These may be opportunities that significantly reduce nature-related dependencies and nature impacts and therefore risks, and/or new business models, products and services that contribute to nature-positive outcomes.

Definition

Nature-related opportunities

Nature-related opportunities are generated through impacts and dependencies on nature, and can occur:

When organisations avoid, reduce, mitigate or manage nature-related risks, for example, connected to the loss of nature and ecosystem services that the organisation and society depend on;
Through the strategic transformation of business models, products, services, markets and investments that actively work to reverse the loss of nature, including by restoration, regeneration of nature and implementation of nature-based solutions.

TNFD (2021) Nature in Scope Adapted from: WWF (2022) A Biodiversity Guide for Business SBTN (2020) Adapted from: WWF (2022) A Biodiversity Guide for Business

While business opportunities can arise from restoring nature and mitigating existing damage through reconstructive or compensatory measures, business actions that avoid or minimise negative impacts on nature should be prioritised (i.e. following mitigation hierarchy principles or the SBTN AR3T framework). Actions should ideally go beyond risk reduction and contribute to a nature-positive future through influencing the threats and pressures that drive nature loss and degradation globally. Strategic transformation is likely to be more impactful than the mitigation or management of nature-related risks in isolation.

Efforts to create positive impact and / or to mitigate risk can improve the resilience of organisations to nature-related trends and changes, including nature-related physical, transition and systemic risks. Resilience is defined as the capacity to deal with change and continue to develop.[1]

Categories of nature-related opportunities

Nature-related opportunity categories are split into those linked to business performance and those linked to sustainability performance. Sustainability performance opportunities categories will often generate business performance opportunities. For example, sustainability using natural resources may provide access to new funding mechanisms (capital flow and financing), result in cost savings due to resource efficiency (resource efficiency) and increase revenue due to improved reputation (reputational capital).

Additional Content

Table: Nature-related opportunities linked to business performance and sustainability performance

Category	Nature-related opportunity
Markets	Changing dynamics in overall markets, such as access to new markets or locations, which arise from other opportunity categories as a result of changing conditions, including consumer demands, consumer and investor sentiment and stakeholder dynamics.
Capital flow and financing	Access to capital markets, improved financing terms or financial products connected to positive nature impacts or the mitigation of negative impacts.
Products and services	Value proposition related to the creation or delivery of products and services that protect, manage or restore nature, including technological innovations.
Resource efficiency	Actions an organisation can take within its own operations or value chain in order to avoid or reduce impacts and dependencies on nature (for example, by utilizing less natural resources), whilst achieving co-benefits such as improved operational efficiency or reduced costs (for example, micro irrigation which maximises plant health, reduces water use and reduces costs).
Reputational capital	Changes in perception concerning a company’s actual or perceived nature impacts, including the consequent impacts on society and engagement of stakeholders.
Sustainable use of natural resources	Substitution of natural resources by recycled, regenerative, renewable and / or ethically responsibly sourced organic inputs.
Ecosystem protection, restoration and regeneration	Activities that support the protection, regeneration or restoration of habitats and ecosystems, including areas both within and outside the organisation’s direct control , including areas both within and outside the organisation’s direct control.

Additional Content

Figure: The SBTN AR3T Action Framework mitigation hierarchy

Definition

Natural-climate solutions

A subset of nature-based solutions, natural-climate solutions include conservation, restoration, and improved land and sea management that increase carbon storage and/or avoid greenhouse gas emissions, enhance resilience, and assist climate adaptation across global forests, wetlands, mangroves, grasslands, and agricultural lands and other habitats.

Girardin, C et al (2021) Nature based solutions can help cool the planet — if we act now; Griscom, B et al (2017) Natural climate solutions

Definition

Nature-based solutions

Actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits.

IUCN (2020) The IUCN Global Standard for Nature-based Solutions

Opportunities encompass a wide range of actions, such as the protection and management of ecosystems, the incorporation of green and blue infrastructure in urban areas, and the application of ecosystem-based principles to agricultural systems. The concept is grounded in the knowledge that healthy natural and managed ecosystems produce a diverse range of services on which human wellbeing depends, from storing carbon, controlling floods, and stabilising shorelines and slopes, to providing clean air and water, food, fuel, medicines and genetic resources.

Nature-related opportunities will vary according to the region, market, and industry in which an organisation operates.

Additional Content

Figure 8: TNFD’s categories of nature-related opportunities (v0.3 update)

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