As we enter 2026, I’m calling this the year that nature risk goes mainstream. That might sound bold given news like the World Economic Forum’s latest Global Risk Report, which shows environmental risks slipping down the short-term priority list. But here’s the disconnect. Whilst perception has shifted, reality hasn’t. If anything, nature risk has accelerated.
To understand why this year represents a turning point, let’s start by establishing what we actually mean by nature risk, and then unpack the five core themes that I believe will drive this shift.
What is nature risk?
Every business depends on nature. For industries like agriculture and forestry this is obvious, because nature directly provides the product. But nature also provides water, flood protection, clean air, pollution management, and many other materials and services that touch every part of the economy. These are operational dependencies for businesses to function. Nature risk is operational risk that arises from uncertainty about how changes to nature will affect businesses.
The reality-perception gap widens
We must be clear about what’s actually happening: human activity is changing nature, from local to global scales, and the change is accelerating. 2025 was the third hottest year on record according to Berkeley Earth, trailing only 2023 and 2024. We’re not yet at the peak, we’re seeing warming and extreme weather build momentum in ways that cause major concern amongst climate scientists. Last year, we crossed another planetary boundary with ocean acidification, bringing us to seven out of nine boundaries now breached. Deforestation continues to claim an area the size of Cuba or Bulgaria every year. Our planet’s condition is getting worse, not better.
And yet, risk professionals surveyed by the WEF broadly deprioritised environmental risks in the near term outlook whilst maintaining them as a top-three threat over a longer timeframe.
Why the perception gap? Mainly it’s the ascendence and urgency of geopolitical, economic, and conflict risks over the last year, dominating news cycles and sucking the oxygen out of the room. There is also the episodic nature of how most people experience nature risk. A major storm, a drought, a flood – these events dominate headlines briefly, then fade. There’s also an element of recency bias that cannot be ignored here. But make no mistake, nature risk hasn’t diminished, only the attention paid to it.
Nature enters the risk management mainstream
This is where things get interesting. The financialisation of nature risk is the necessary prerequisite to move nature beyond the sustainability office and into mainstream risk management. I’m increasingly hearing nature risks reframed as “supply chain risks” or simply “financial risks”. Sometimes the word “nature” doesn’t appear until page three of the analysis.
There’s a real early mover advantage here. Both long-term value investors and short-term quant funds are already using nature data. The question for everyone else is simple: How long are you willing to absorb the risk within your portfolio before you’re accounting for it yourself?
This is where metrics like nature value at risk (NVaR) becomes critical. We’ll be rolling out more material on this topic, but in essence, NVaR translates nature impacts and dependencies into operational and financial terms. It goes beyond simply identifying what aspects of nature that businesses depend on to quantifying the financial risk of losing that nature supply chain. It’s not “one nature metric to rule them all,” but it is an essential lens for business decision-making and a prerequisite for nature to be prioritised by risk professionals alongside other risk categories.
Bridging the expertise divide
We’re also dealing with an uncomfortable truth in that nature risk is high-profile but very poorly understood. Many organisations lack in-house capacity to proactively plan for nature risk. Risk officers are expected to handle nature “in addition to” everything else, without the expertise to do so effectively.
I think the perception gap we see in surveys like the WEF actually reflects a secondary question: how long until organisations think they’ll truly understand nature risk? The answer seems to be “maybe in a couple of years, but certainly in ten years.” But is this realistic? This is why lowering the barrier to entry is absolutely critical.
For risk professionals navigating this landscape, certain nature themes are likely to dominate. Water is a common and reasonable first topic, particularly as AI data centres drive up water demand and costs. From an impact perspective, deforestation remains a priority as the number one driver of biodiversity loss globally, and it’s relatively apolitical, making it safer ground. I also expect to see more dialogue and focus on ecosystem services this year – they’re fundamental to NVaR, and as that methodology gains traction, understanding which ecosystem services matter to your business will become essential.
Progress in 2026 depends on making nature data actionable, interpretable, and transparent. It’s largely about quality over quantity – organisations need to understand what’s most material to their business, not just catalogue everything their operations touch.
From retreat to resurgence
We can’t ignore political reality. Sustainability and risk professionals have been bullied into not talking about nature by threats of legal and regulatory actions. Based on early examples of company reporting for 2025, we expect to see a broad retreat from nature-related policies and goals by corporates. This is bad for the planet and bad for people, there is no sugar coating it.
But environmental progress has always been characterised by setbacks and leaps forward, and I expect the rebound to be driven by three factors. First, by the reality that nature risks exist and they must be measured to be managed. Second, political winds will shift again, and with recent shifts likely to exacerbate nature problems, it is reasonable to expect the pendulum to swing even further toward sustainability and accountability when the momentum changes. And underlying all of this is the reality that the vast majority of people value nature and want to manage it well. As one example, a 2025 survey sponsored by the World Wildlife Fund found that 84% of Americans are concerned about threats to nature.
Put simply, the fundamentals haven’t changed, society expects industry to be responsible and accountable for nature stewardship, and while de-emphasising nature may be politically expedient today, I expect to see a resurgence of pressure for environmental accountability from activists, journalists, customers, and companies’ own workforces.
Data quality reaches critical mass
Here’s what makes me optimistic: data sophistication is finally reaching the level where nature-related data is broadly actionable by businesses and investors. The previous generation of ESG ratings was well-intentioned, but it was broadly subjective and inconsistent, and so nobody could conclusively show that nature data mattered for investment strategy. ESG ratings weren’t even aligned with themselves, let alone predictive, and this created market apathy.
But we’re at an inflection point. By relying on operational data that can be measured and verified, we’re now able to demonstrate materiality in ways that haven’t been possible before. And data about company policies, targets, and outcomes is increasingly detailed and nuanced, providing a lens into not just what companies do but also how well they are managed. Until recently, lack of such data was a common excuse for inaction, but today no one can plausibly claim that they don’t know how nature affects their business or investment portfolio.
To illustrate, we’re seeing firsthand the transition from a disclosure regime to nature being treated as financially material, with the world’s largest pension fund, Norges Bank Investment Management, producing detailed analysis of their natural capital impacts and sensitive location risks in their Climate and Nature Disclosures report – demonstrating that nature reporting is already influencing trillion-dollar portfolios.
How we’ll succeed
The question isn’t whether nature risk matters. As long as nature continues to change, businesses will have no choice but to adapt to it. The real question is whether we can close the gap between those who understand this reality and those expected to act on it. That means translating complex environmental data into financial language that resonates beyond sustainability teams. It means building trust among decision makers with accurate, interpretable, and actionable insights. And it means navigating the political tensions whilst meeting growing stakeholder demands for accountability.
If 2026 lives up to its potential as the year that nature risk goes mainstream, it will be because we’ve made the invisible visible and the complex actionable. The tools are finally here. Now we all need to put them to work.
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Learn how GIST Impact can support your organisation in measuring their nature risk, by getting in touch with a member of our team.
