Nature risk:

Why progress matters more than perfection 

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Article Type
The Wider Lens
Topic
Responsible Investing
Published
March 18, 2026
Read time
4 mins
Author
Georgina Laird
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The Wider Lens

 

Looking beyond the bottom line for incisive, responsible investment insights

 

Welcome to The Wider Lens, where we share fresh thinking on all things related to responsible investing. Formerly the Sustainability Soapbox, the new name reflects the broader scope of our content, covering everything from climate insights and ethical issues to stewardship, ESG and more.

 

Nature risk: Why progress matters more than perfection 

 

“Anyone who thinks that you can have infinite growth in a finite environment is either a madman or an economist.” As David Attenborough turns 100 this year, one of his most enduring insights feels more relevant than ever. For investors now grappling with nature risk, the tension he identified decades ago is no longer theoretical - it’s financial. 

 

When the investment world first grappled with climate risk, it took years for the frameworks, data, and skills to settle into place. We climbed a steep learning curve, new datasets, new models, new language, new expectations. Looking back, some argue that biodiversity should have come first: climate change drives nature loss, but healthy ecosystems are also among our strongest natural defences against a changing climate. But even with that logic, it’s easy to see why the industry tackled climate first, as carbon came with a single metric. Nature doesn’t.  


Nature requires us to understand water cycles, soil health, species interactions, ecosystem functions, pollution pathways, and the complex ways these systems support the global economy. It’s more scientific, more fragmented, and more resource intensive than almost any sustainability issue investors have faced. Data gaps across nature metrics are real. Much of what we need is incomplete, inconsistent, expensive or simply not available. Even when they do exist, translating it into clear financial materiality remains one of the biggest challenges. 


Even if an environmental, social and governance (ESG) team can get to grips with these complexities, how do we roll it out across investment teams who are already stretched across countless other risk factors? An analyst covering banks or pharmaceuticals cannot reasonably spend half their week on a single category of ESG risk and nor should they need to. A proportionate, scalable, and operational way of integrating biodiversity into the investment process is, therefore, required.


Regulation driving progress 


Across Europe, regulatory frameworks are evolving in ways that should support better biodiversity related information over time. Although the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD) are being simplified, they still expand expectations for environmental disclosure among large companies. Alongside these, regimes like the EU Taxonomy and the Deforestation Free Products Regulation, continue to shape how businesses assess nature related dependencies and risks and land use impacts. None of these initiatives will eliminate data gaps overnight, but they should push companies toward clearer, more consistent reporting. 


In the UK, the forthcoming Sustainability Reporting Standards (UK SRS), based on the International Sustainability Standards Board IFRS S1 and S2, should further reinforce this direction of travel. Expected to launch early 2026 on a voluntary basis, the UK SRS will require companies to consider financially material sustainability related risks and opportunities across their value chains, including those linked to nature. While principles based rather than prescriptive, the standards create a framework through which issues such as water stress, land use change, ecosystem degradation and dependencies on natural capital could be more transparently surfaced within mainstream corporate reporting. Over time, this should help drive greater disclosure consistency, support the development of better nature related datasets and tools, and strengthen investor understanding of where biodiversity loss may translate into financial risk. 


So, what’s the answer? 


The answer isn’t to wait for the emergence of a perfectly engineered framework. Nature risk is complex, data intensive and still evolving, but waiting for perfect information only delays action. We need to start now and build as we go. At Aegon AM we are starting to take deliberate, proportionate, and scalable steps to bring nature into our investment process. This includes setting clear investment criteria, strengthening research and internal capability, reducing our own operational footprint, and using stewardship and collaboration to drive real world change. 


We focus first on identifying the most financially material risks, where the links to financial materiality are already understood (e.g. water-scarcity, and per and polyfluoroalkyl substances (PFAS) exposure), ensuring that these topics are embedded in the analysis process alongside other material risk factors. We have already begun this process by developing internal frameworks, prioritising the sectors where dependence and impact on, nature are highest. But integration alone isn’t enough. The most tangible step that we can take today is to engage. Through a new nature-focused engagement campaign, and through participation in initiatives such as Nature Action 100+ and Chemsec, we are encouraging companies to improve practices, strengthen governance, and address ecosystem issues that underpin long-term value creation. 


Progress matters more than perfection and starting now positions us and our clients for the transition ahead. 

 

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Author

Georgina Laird
Senior Responsible Investment Associate
Georgina Laird is a senior responsible investment associate responsible for analyzing and monitoring environmental, social and governance factors within the firm’s sustainability-themed equity and multi-asset mandates, and engaging with investee companies on a regular basis.
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