Leveraging the dependency and impact analysis developed in the EVALUATE phase of LEAP, analysts should then seek to identify how those impacts might translate into risks for the organisation. Risks identified as material should be disclosed in line with the TNFD’s ‘Strategy A’ draft disclosure recommendation.
The LEAP approach has also been designed to help organisations surface not just risks, but also potential commercial opportunities; either to eliminate or mitigate risks or to create new commercially valuable business models, products and services that contribute to nature positive outcomes for society. In this sense, the ‘L’, ‘E’ and ‘A’ phases of the process can play an important role in shaping a wide range of leadership decisions about strategy, growth and capital allocation, not just disclosure.Additional Content
- A1: Risk identification and assessment – What are the corresponding risks for our organisation?
- A2: Existing risk management – What existing risk mitigation and management approaches are we already applying?
- A3: Additional risk management – What additional risk mitigation and management actions should we consider?
- A4: Materiality assessment – Which risks are material and should be disclosed in line with the TNFD disclosure recommendations (Strategy A)?
- A5:Opportunity identification and assessment – What nature-related opportunities does this assessment identify for our business?
Internal and External Tools to Support your analysis
- Tools for risk analysis such as COSO Enterprise Risk Management Framework, Enterprise Risk Management (CGMA), ISO 31000 Risk Management Standard
- Risks and opportunities for the TNFD disclosure recommendations
Suggested outputs from the ASSESS Phase
- A ‘long list’ of relevant nature-related risks and opportunities the organisation should act on.
- A matrix of material risks consistent with the enterprise management framework of the organisation (e.g. significance by sector, business line, location, value chain, etc.)
- Executive Committee and Board level guidance outlining the organisation’s proposed nature-related risk management strategy.
- Executive Committee and Board level advice on ways to avoid, minimise and mitigate nature-related risks and identify nature-related opportunities for the organisation.