For most organisations, the largest impacts on nature occur not within their own operations but across their upstream supply chains. Yet many are still just beginning to understand and act on this critical dimension of sustainability.

Why Supply Chains Matter in Nature Strategy

While climate strategies have become common practice, nature-focused initiatives often lag behind. However, biodiversity loss, land degradation, and natural resource depletion directly threaten the resilience of supply chains, especially those reliant on agricultural or extractive inputs. From food retailers to manufacturers, businesses are discovering that their exposure to nature risks begins at the source, literally.

In a recent poll conducted during our webinar “Measuring Impacts in the Supply Chain,” supply chain resilience emerged as the top reason companies are beginning to assess their nature-related risks and opportunities.

And the pressure is building. Companies are now facing a web of regulations, including the EU Deforestation Regulation (EUDR), the Corporate Sustainability Reporting Directive (CSRD), and voluntary frameworks like TNFD. These all require detailed understanding of impacts on nature across supply chains, pushing businesses to move beyond surface-level reporting.

A Practical Framework for Getting Started

The good news? Perfect data isn’t required to begin. Many companies have already embarked on their journeys with incomplete datasets. In fact, a second poll conducted during our “Measuring Impacts in the Supply Chain” webinar revealed that most companies have already evaluated at least some commodities or products, proof that action is possible even without full visibility.

Nature-related supply chain assessments are inherently iterative. What matters is starting with available information, identifying gaps, and building progressively.

A typical journey might include:

1. Mapping the Supply Chain
   What commodities do you source, and from where? Even approximate data, such as supplier countries or trade flow information, can begin to inform an impact baseline.
   
   
2. Prioritising Focus Areas
   Not all supply chain segments are equal. Prioritization helps narrow the scope based on commodity impact intensity, strategic importance, or procurement volume. For instance, beef may have a far greater ecological footprint than packaging materials.
   
   
3. Quantifying Nature Impacts
   Businesses need to ask: What are the environmental drivers in our supply chain, e.g. deforestation, water use, pollution, or land degradation? Where are these pressures most severe, and how do they compare to direct operational impacts?
   
   
4. Assessing Risks and Dependencies
   Identifying impact hotspots is only half the picture. Companies must also evaluate their risks. How might declining water availability or pollinator loss affect yields or procurement costs? What would happen if a key sourcing region were disrupted? How likely are enhanced environmental regulations in my sourcing regions?
   
   
5. Taking Action Where It Matters Most
   High-impact commodities like soy, palm, and beef, often linked to deforestation, offer immediate opportunities for certified sourcing or supplier engagement.
   
   

The Power of Locational Intelligence

A key differentiator in nature impact assessment is location. Unlike greenhouse gas emissions, which affect the global atmosphere uniformly, nature impacts are deeply place-specific. Understanding the local context, such as water stress or biodiversity sensitivity, can significantly influence risk assessment and prioritisation.

As a result, at Natcap we consider the State of Nature at the sourcing location when evaluating impacts in the supply chain. For example, when studying the impacts of beef production we would consider which regions already face large pressures from cattle grazing.

From Insight to Resilience

Ultimately, understanding where and how supply chains impact nature is essential for building long-term business resilience. As expectations around nature-related reporting become mandatory, companies will be increasingly evaluated by regulators, investors, and customers based on how they manage these impacts. In a rapidly changing world, delaying action may prove more costly than addressing the risks head-on.