Bringing Climate and Nature Together: What Integration Means in Practice

The climate crisis has long been a corporate priority. But the nature agenda, biodiversity, land use, pollution, and water, is now emerging as an equally urgent and deeply connected challenge. As companies navigate increasing demands from regulators, investors, and stakeholders, companies have started exploring how to integrate climate and nature in practice. In fact, at one of Natcap’s most recent webinars, we found that 27% of attendees’ organisations were planning the integration of climate & nature, 18% were piloting, and 11% had fully embedded the integration of climate and nature.

This post explores the case for integration, the regulatory landscape, practical steps for businesses, and the opportunities and challenges that lie ahead.

Why Climate Came First

For many businesses, assessing climate risks is a well-integrated aspect of their sustainability journey. This has been driven by well-established science, relatively standardised data, and clear regulatory and investor expectations. Emissions are quantifiable, climate models are well developed, and frameworks like the Task Force on Climate-related Financial Disclosures (TCFD) have provided structure and credibility.

In some ways, starting with climate is counterintuitive, as nature is actually the broader concept. In fact, climate is only one of the nine planetary boundaries we need to respect in order to maintain a stable earth system. 

However, with that breadth comes complexity and measurement challenges. Biodiversity loss, soil degradation, and water stress vary by location and ecosystem, and are harder to model with precision. As a result, many companies are only now beginning to grapple with their nature-related impacts and dependencies.

But this is changing. Nature-related risks and opportunities are becoming more visible, and frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) are helping businesses bring nature into their core strategy, governance, and risk management.

Integrating Climate and Nature Together Makes Business Sense

Climate and nature are fundamentally connected - nature risks are climate risks. For example, deforestation contributes to climate change, while changing temperatures accelerate biodiversity loss. Treating them separately could underestimate the financial consequences of environmental risk, lead to the wrong investment decisions to mitigate that risk, and miss opportunities for growth. 

For example: 

• Quantifying physical risk:
  • Water scarcity depends on climate conditions and on how ecosystems maintain the local water
  • Healthy soils are under threat from desertification and nutrient loss
• Quantifying transition risk:
  • Capital flight from companies and assets perceived as climate and nature-negative (or the higher cost of capital due to risk premiums on climate and nature risk)
  • Public scrutiny over environmental damage in a company’s supply chain
• Mitigating actions:
  • Shifting to green steel can reduce pollution and water use, alongside reducing greenhouse gas emissions
  • Regenerative agriculture stores more carbon and maintains soil health and protects our rivers from nutrient pollution

The Regulatory Landscape is Evolving Quickly

Regulation is now accelerating the shift from climate-first to integrated sustainability.

• TNFD and TCFD share the same four-pillar structure,governance, strategy, risk management, and metrics,making it easier for companies to align their approaches across both topics.
• The EU’s Corporate Sustainability Reporting Directive (CSRD) requires companies to assess both climate and nature risks and impacts through double materiality. Its standards address issues like pollution, water, biodiversity, and ecosystems, often in interrelated ways.
• Global standards like the International Sustainability Standards Board (ISSB) are also beginning to lay the groundwork for nature-related disclosures. The ISSB is already integrating TCFD recommendations - climate is becoming part of mandatory financial reporting. The ISSB is now looking at nature, which means it is likely that TNFD recommendations could be integrated at some point in the future. 

While the direction of travel is clear, uncertainty remains, particularly around the future of CSRD, as the EU’s Omnibus proposal could reshape key elements of sustainability reporting.

How to Get Started with Integration

For companies just starting to bring climate and nature together, it’s helpful to break down the work into three core stages:

• Measurement of Impacts and Dependencies
  • For climate, this means Scope 1, 2, and 3 greenhouse gas emissions. These are relatively standardised and location-agnostic.
  • For nature, companies must consider where and how they impact ecosystems. This includes land use change, pollution, water use, and more. It also requires assessing the state of nature in relevant locations. They also need to understand their dependencies, such as water availability or pollination, which can pose significant risks.
• Risk and Opportunity Analysis
  • This involves translating impacts and dependencies into financial risks, including physical, transition, and reputational risks.
  • Companies should also explore opportunity areas, like ecosystem restoration, nature-positive sourcing, or regenerative production methods, that can offer resilience and competitive advantage.
  • This includes scenario analysis to understand how risks and opportunities may manifest differently in future scenarios.
• Strategy, Targets, and Transition Planning
  
  • Climate transition plans are increasingly common. Nature-positive strategies are less so, but growing in prominence.
  • Companies are starting to integrate both into unified transition plans, outlining targets, timelines, and implementation strategies that address both climate and nature outcomes.

Common Challenges and How to Address Them

• Data gaps: Nature assessments require granular, location-based data, often across complex supply chains.
• Skill gaps: Finance and strategy teams are growing more comfortable with climate models, but less so with nature risk. Upskilling and cross-functional communication are essential.
• Uncertainty: Nature data comes with greater uncertainty. Companies need to communicate this transparently and be comfortable acting on imperfect information.
  
  

Looking Ahead: From Compliance to Value Creation

As disclosure frameworks mature and investor scrutiny sharpens, the imperative to integrate climate and nature will only increase. But this isn’t just about compliance. It’s about value creation.

An integrated approach helps businesses identify hidden risks, unlock operational efficiencies, build resilience, and discover new sources of competitive advantage. Just as net-zero strategies unlocked investment in renewables and clean tech, nature-positive strategies are poised to drive the next wave of sustainable innovation.