LEAP – the risk and opportunity assessment approach

: L3: Prioritisation according to the integrity and importance of relevant ecosystems

The TNFD recommends an organisation discloses and prioritises for assessment locations where there are assets and/or activities in the organisation’s direct operations, and upstream and/or downstream and/or in financed activities, where relevant, in:

• High integrity ecosystems; and/or
• Areas of rapid decline in integrity; and/or
• Areas of high biodiversity importance; and/or
• Areas of water stress; and/or
• Areas where the organisation is likely to have significant potential dependencies and/or impacts.

The ecosystem integrity and biodiversity importance in the location should be characterised at a landscape scale using an appropriate area of assessment such as an ecoregion. Water stress should be evaluated at a relevant water basin scale. Further detail on the criteria is set out in Table 1.

Any location meeting one or more of these criteria is considered a priority location. For example, any location that is identified to be in an area of high biodiversity importance would be a priority location, regardless of how it compares against other criteria.

This recommendation is based on the premise that organisations are more likely to face material nature-related dependencies, impacts, risks and opportunities in locations with certain characteristics.

The recommended criteria for these categories are outlined in Table 1 below. If any one of the criteria is met, the location should be considered a priority for assessment and disclosure.

This prioritisation of locations is part of an iterative process in LEAP, where location prioritisation guides the evaluation of dependencies and impacts in the Evaluate phase, and vice versa. The identification of priority areas will be primarily based on the analysis undertaken in the Scoping phase and LEAP component L2, as well as areas with of significant potential dependencies and/or impacts through iteration of the Scope, Locate and Evaluate phases. Analysts should not use a rigid, formulaic approach to location prioritisation but use judgement based on an understanding of the specific characteristics of the business and its business processes.

Stakeholder engagement and judgement are critical to assessing the most important locations for assessment through the LEAP approach, based on the unique nature of the business and its interface with nature.

Component L3 of LEAP also links directly to recommended disclosure Strategy D. This recommends an organisation to disclose the full list of priority locations. This is regardless of whether organisations choose to apply further prioritisation criteria to narrow down their focus in the Evaluate phase.

The output of component L3 is a view of the company’s direct business operations and its upstream and downstream value chain(s), overlaid with an identification of the priority ecosystems. These locations are subsequently referred to as ‘priority locations’ throughout the next ‘E’ phase of the LEAP approach, where nature-related dependencies and nature impacts are evaluated.

In undertaking this component of LEAP, an organisation should also refer to the supplementary guidance on location prioritisation.

The following tools and platforms have been carefully selected by the TNFD to help support you in completing this phase of the LEAP process.