Nature Due Diligence: Identifying Risks and Uncovering Opportunities
Addressing the nature imperative while mitigating risk
10 December 2025
Whitepapers
Table of Contents
- Frameworks for Nature Due Diligence
- Helpful Resources
- Leveraging TNFD
- Key Recommendations
- How Anthesis Can Help
- Contact Us
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Financial institutions are increasingly under pressure to better understand how investments both impact and depend on nature, and how to manage and mitigate associated nature risks. An enhanced due diligence process helps organisations identify risks and potential value creation opportunities early in the investment process.
In this article, we provide an overview of nature due diligence, outline helpful resources to leverage for this process, and provide recommendations for successful completion.
Navigating nature: frameworks and insights for effective due diligence
Nature due diligence is a process that aims to support asset managers in identifying how the operations of their portfolio companies impact and depend on nature. These insights can be used to identify material nature-related risks and opportunities pre-transaction, potentially informing valuation or posing a red flag for investment. Nature due diligence can also enable deal teams to build buy-in and focus on enhancing nature management practices during ownership.
Due diligence that accounts for nature helps translate ecological risks into business risk . This is particularly helpful if an institution is active in one of the eight priority sectors that the Ceres Nature Action 100 – an investor engagement initiative coordinated by the sustainability nonprofit, Ceres – has identified as being systemically important for reversing nature and biodiversity loss by 2030.
Ceres Nature Action 100 Priority Sectors
- Biotechnology & Pharmaceuticals
- Chemicals (including agricultural chemicals)
- Consumer Goods Retail (including e-commerce and specialty retailers)
- Food Production (from meat and dairy producers to processed foods)
- Food & Beverage Retail
- Forestry & Packaging (including forest management, and pulp and paper products)
- Household & Personal Products
- Metals & Mining
Companies operating in these sectors, such as biotech or food production companies, both depend on nature for resources and negatively impact nature by degrading ecosystems through sourcing raw materials. These sectors’ reliance and impacts on nature create business risks, such as supply chain disruptions and increased regulatory scrutiny.
Through leveraging nature due diligence, asset managers will:
- Unlock value creation opportunities by identifying investment opportunities that reduce negative impacts to nature.
- Assess nature-related impacts and dependencies of portfolio companies.
- Ensure regulatory alignment by integrating nature-related criteria into screening and reporting processes.
- Strengthen risk management processes by identifying nature-related risks across the investment lifecycle.
- Enable informed decision-making, translating nature impacts and dependencies into business risks and opportunities.
Resources to leverage for nature due diligence
Including nature in decision-making has only more recently begun to gain traction in corporate and financial circles, thanks to emerging nature-reporting frameworks, such as the Task Force on Nature-Related Financial Disclosures (TNFD), Science Based Targets Network (SBTN), Corporate Sustainability Reporting Directive (CSRD), and more. Recently, the International Sustainability Standards Board (ISSB) announced its intent to introduce new disclosure requirements considering nature-related risks and opportunities, to meet investor information needs.
While these frameworks are largely geared toward post-acquisition reporting, they offer valuable insights and structures that can be adapted for pre-acquisition due diligence. Additional resources to support an organisation through the nature due diligence process include:
- ENCORE: The Exploring Natural Capital Opportunities, Risks and Exposure (ENCORE) tool is an online tool for reviewing sector nature-related impacts and dependencies.
- Ceres’ Eight Key Sectors: Cere’s Exploring Nature Impacts and Dependencies: A Field Guide to Eight Key Sectors report provides an overview of nature-related impacts in specific sectors and identifies resources for investor engagement.
- PRI Spring: A stewardship initiative focused on addressing the risks of biodiversity loss to support the long-term interest of investors. Its Company Assessment Framework outlines a set of expectations for business operations, strategy and risk management, and supply chain management based on indicators from the World Benchmarking Alliance’s Nature Benchmark.
By leveraging these nature reporting frameworks, structures, and recommendations early, asset managers can enhance their due diligence processes, strengthening their ability to identify nature-related risks and uncover opportunities for value creation during the initial phases of investment analysis.
Leveraging TNFD to guide nature led due diligence
TNFD is a global market-led initiative aiming to support a shift in global financial flows away from nature-negative outcomes and toward nature-positive outcomes. It aligns closely with several other sustainability standards, such as the ISSB and GRI, and can be used to respond to CSRD’s European Sustainability Reporting Standards (ESRS). Given TNFD’s connection to several standards, asset managers can leverage its guidance to consider how nature can be integrated into their due diligence processes.
TNFD provides asset managers with a structured approach to understand and manage their reliance on nature, and to integrate nature into their decision-making processes through four pillars: Governance, Strategy, Risk and Impact Management, and Metrics and Targets.
Specifically, the strategy pillar calls for the disclosure of nature-related dependencies, impacts, risks, and opportunities (DIROs), as well as their effects across the business, value chain, and financial planning, and their overall resilience across scenarios. Through aligning with TNFD’s recommendations to identify and disclose on DIROs, asset managers may begin integrating nature-related considerations into their due diligence processes.
In addition to its core recommendations, TNFD’s guidance for financial institutions encourages disclosure of how nature-related risks and opportunities are considered in product and service offerings, investment processes, risk management practices, and due diligence standards. Through being asked to disclose how their due diligence integrates nature, asset managers are prompted to include nature considerations across financial decision-making and portfolio oversight, including assessing portfolio companies for nature-related DIROs. For portfolio companies with significant nature-related DIROs, TNFD recommends that asset managers describe additional engagement or due diligence processes to manage these material DIROs.
Recommendations for performing nature due diligence
While nature has always been the resource on which our economy depends on, only recently has the global biodiversity crisis brought nature to the forefront of financial and corporate agendas. Nature’s connection to other sustainability topics such as climate change, water, and supply chain disruption has continued to become increasingly clear. Integrating nature risks into existing due diligence processes allows for a robust and comprehensive analysis for informed decision making.
Where to begin?
To refine current processes and to integrate nature considerations into an enhanced due diligence process, Anthesis recommends that organisations consider the following:
Awareness of scope, roles, and responsibilities for nature due diligence
- Detail the roles responsible for assessing, managing, and disclosing nature DIROs throughout the investment life cycle, from pre-investment to sale.
- Build internal capacity of key nature concepts and material nature risks and opportunities based on the sector.
- Define stakeholder engagement responsibilities for including local communities in the assessment of nature DIROs.
Determine current nature due diligence process
- Identify how current investment processes have approached investments aligned with addressing key drivers of nature loss: climate change, invasive species, land and sea use change, pollution, and overexploitation.
- Refine current processes to identify how potential investments manage nature DIROs and address key drivers of nature loss.
- Integrate physical nature risks assessments into the screening of potential investments, including sector-specific drivers of biodiversity loss.
- Determine criteria or threshold for bucketing investments with potential nature opportunities.
Develop key pre-investment nature questions
- Develop focused questions that deal teams can use to identify key risks and drivers of nature loss to which a portfolio company may have exposure to, ensuring that companies operating in high impact sectors focus on drivers of biodiversity loss (ex: land use).
- Use questions to identify material nature impacts and dependencies, governance, risk management, and opportunities.
Management and monitoring of material risks
- For portfolio companies with higher exposure to nature risk, monitor material risks through enterprise risk management at the portfolio company level.
- Consider additional risk screens based on local regulations for material risks.
- Utilise existing frameworks and guidance to build financial institution policies and procedures that address nature risk.
Performance and disclosure
- Consider aligning disclosures with TNFD and determine a phased approach for integrating TNFD Core metrics into sustainability reporting.
- Consider developing portfolio company-specific nature goals and communicating progress on these goals in regularly occurring meetings.
End of hold period
- Highlight in-place nature-related risk management practices that would give the company a lower risk profile compared to its peers.
- Identify nature-related opportunities that the next buyer could pursue to increase valuation
- Support a potential impact narrative through nature-focused leading practices.
How Anthesis can help
Developing an enhanced nature due diligence process allows organisations to identify both risks at the initial phase of the investment process as well as potential opportunities for value creation. By integrating frameworks like TNFD, organisations can systematically assess their dependencies and impacts on natural ecosystems and ensure alignment with global biodiversity goals. To remain stewards of nature, organisations should embed nature-focused due diligence into their investment strategies to establish resilience and long-term value creation.
At Anthesis, our nature experts and global sustainable finance team support clients in reviewing their current approach to conducting pre-acquisition nature due diligence on potential investments. We identify opportunities for enhanced due diligence across the portfolio by conducting nature risk and opportunity assessments, peer benchmarking, and identifying disclosure risks, all whilst aligning with key frameworks.
We are ready to support on any of the above recommendations, whether taking your first steps into nature due diligence, or already working on a strong narrative for exit.
Explore our Nature & Due Diligence Solutions
We work with private equity and asset management firms around the world, helping them build robust due diligence processes that incorporate nature.
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