P1: Strategy and resource allocations

Guiding Question: What risk management, strategy and resource allocation decisions should be made as a result of this analysis?

Discuss the implications for strategy, resource deployment and capital allocation at a business unit and enterprise level

Based on the risk and opportunity assessments completed in the ‘A’ phase of the LEAP approach, senior management teams from across the business should discuss the implications for strategy, resource deployment and capital allocation at a business unit and enterprise level. These decisions should be framed within the broader strategy of the organisation and its financing envelope, taking into account short-, medium- and long-term considerations.

Key questions to help frame strategy and resource allocation discussions and decisions within the organisation might be:

  • The integrity of our strategy: Does our understanding of the nature-related risks and opportunities facing our business now, and plausible changes over the medium to long term, require a fundamental rethink of our corporate or business unit strategy?
  • Impact on intangibles: Beyond the implications for our core business processes generating cashflow, what are the implications of our assessment for the intangibles in our business, including customer loyalty, brand value and reputation?
  • Regulatory considerations: What implications might changing regulation and government policy in the jurisdictions in which we have key business-nature interfaces – direct, upstream and downstream – change our ability to operate as a business, our cashflows, our profit margins or our enterprise value? What value might be at risk as a result of potentially higher impact mitigation costs and reporting compliance costs mandated by governments in our priority locations?
  • Community engagement: What is the state of our relationship with local communities at our business-nature interface locations? How well are we engaging with local communities to shape and co-develop better risk management outcomes, and potentially natural capital solutions, for the ecosystem services on which we have a mutual dependence?
  • Investor preferences: What are the attitudes and investment criteria of key capital providers to our organisation? What nature-related risks and opportunities are they assessing? How can we address their concerns and/or capitalise on their interest in financing nature positive outcomes in the locations, and across the value chains, in which we are active? What risks, if any, do we face of a sudden loss of investor confidence or interest as a result of our nature-related dependencies, impacts and risks?

Useful Tools and Platforms

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

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