- Corporate Sustainability
- Risk Management
- Financial Disclosure
- Environmental Impact
LEAP: A Multipurpose Approach to Nature Assessment
Coauthored by Nagadarsan Suresh and Ian Trim
This article follows our earlier piece on the Taskforce on Nature-Related Financial Disclosures (TNFD) framework and its relevance to corporations embarking on a nature-positive journey. The final TNFD framework was launched in September 2023 and included the release of a number of supporting guidance documents, including one on the Locate, Evaluate, Assess, and Prepare (LEAP) approach, designed to help companies with their nature-related assessments.
The LEAP approach is an integrated process developed to help organizations identify and assess nature-related impacts, dependencies, risks, and opportunities, even without formal disclosure. Using this approach is also not mandatory for a TNFD disclosure; organizations are free to complete the process with their own assessment mechanisms.
The LEAP approach is applicable to all sectors and can be used by any company starting out on its nature-related sustainability journey to assess its direct operational interactions with nature and those of its value chain.
Overview of How to Use the LEAP Approach
- Locate interface with nature: Identify the organization’s potentially material sources of nature-related dependencies, impacts, risks, and opportunities, across its own operations and in its value chain.
- Evaluate dependencies and impacts: Develop an understanding of the organization’s potentially material dependencies and impacts on nature.
- Assess risks and opportunities: Understand which nature-related risks and opportunities are material and should be disclosed by the organization.
- Prepare to respond to nature-related risks and opportunities and report: Decide how the organization could respond to the material nature-related issues identified by the LEAP approach, including what to disclose and how to disclose the material issues identified.
What Does the Approach Look Like in Practice?
Let’s take a fictional company, NaturePositiveDairy, which produces dairy and other agricultural products (e.g., beef and crops) in 10 locations across Europe, five of which are in ecologically sensitive locations (see p. 57 of the LEAP approach guidance document for the TNFD definition of a sensitive location). Some of the farmers in their value chain are based in these sensitive locations.
- Locate: NaturePositiveDairy identifies its activities and interfaces with nature (e.g., water extraction or fertilizer use) and those of its suppliers. This could simply be the identification of a plot of land in, say, West Yorkshire, as one such interface. Following this, the company prioritizes interfaces by identifying overlaps between material areas and ecologically sensitive locations.
- Evaluate: Within the prioritized locations identified, NaturePositiveDairy evaluates the severity of impacts and dependencies of business activities and the corresponding levels of materiality.
- Assess: NaturePositiveDairy assesses the risks and opportunities arising from these impacts and dependencies and prioritizes risks based on recommended assessment criteria such as magnitude, severity, and likelihood.
- Prepare: NaturePositiveDairy decides how to respond to the issues identified (e.g., avoid, reduce, regenerate, or restore), whether to set targets, and what to disclose in line with the TNFD recommended disclosures.
The following table provides further illustrations of how a company might use the LEAP approach to identify and assess specific nature risks.
Example of the LEAP Approach
Source: Guidehouse Insights
This case illustrates that the LEAP approach, despite being a voluntary assessment, supports a holistic understanding of nature as it relates to corporate value chains.
We recommend that organizations get started with their initial assessment of nature-related risks and opportunities, even as an internal exercise, using the LEAP approach. This can eventually be followed by robust action plans and a nature-positive strategy, supported by a thorough understanding of biomes and the linkages between climate and nature.