Getting Focused: 3 Ways to Prioritize Your Company's Nature-Related Impacts and Risks

Effectively managing and mitigating your company's nature-related risks and impacts demands a focused strategy. Attempting to address every potential environmental impact across your entire business simultaneously is neither feasible nor efficient. The good news is, it's unnecessary. The Pareto principle often applies; a select few activities typically drive the largest portion of your overall impacts and risks. The key, therefore, lies in pinpointing these critical areas to ensure you're tackling the most significant issues first. This article explores three established approaches to help your company prioritize its nature-related impacts and risks, allowing you to select the methodology best aligned with your organization's specific goals, experience level, and ambition.

Approach 1: Assessing the overall impact on ecosystem damage

One way to prioritize is to identify which company activities contribute most significantly to overall ecosystem damage. This method is derived from the Life Cycle Assessment (LCA) community. These methodologies help translate different types of impacts, measured in various units (like square meters for land use or cubic meters for water use), into a single, comparable score representing potential ecosystem damage.

Think of it as getting a common denominator to compare apples and oranges. There are several different harmonized LCA methodologies that you can consider using, including ReCiPe and LC-Impact.

• Pros: It's relatively simple and lets you compare different types of impacts (like water vs. land use) directly.
• Cons: This approach usually doesn't factor in the local context. For example, using water in a water-scarce area is scored the same as using it where water is abundant. Biodiversity indicators are also often not included.

Approach 2: A local, systematic prioritization per pressure category (SBTN)

The SBTN framework (specifically steps 2B and 2C) offers a detailed, structured process for prioritization. It involves ranking your activities based on environmental urgency by looking at:

• Your company's impacts (or "pressures").
• The condition of nature ("State of Nature") where impacts occur (e.g., local water stress levels).
• Specific biodiversity indicators in those locations.

This data is used to create ranked lists, which are then combined into one overall priority list.

After the ranking is completed, companies can refine this list further by considering factors like social impacts, business dependencies on nature, stakeholder views, and strategic priorities. Access SBTN’s Technical Guidance for the full description of this approach.

• Pros: It's thorough, directly links impacts to the local environmental state, and aligns you with a recognized framework, which is necessary if you plan to set official Science-Based Targets for nature later.
• Cons: You need to create separate rankings for each major impact category (water, land, etc.), which might result in several prioritized lists – potentially a lot for companies just starting out. It also works best when you know the exact locations of your impacts.

Approach 3: An integrated approach that combines impacts and risks across pressure categories

The third option combines the simplicity of comparing different impacts with the crucial local context. It starts by looking at your impacts using those LCA-based factors (like in Approach 1). Then, it layers in local risk data like deforestation rates or water stress, often on a 1-5 scale. By multiplying your impact score by the local risk level for each activity or location, you get a risk-weighted priority score. You can do this for each impact type and even aggregate them into a single, unified priority list across all categories.

• Pros: It gives you one actionable, prioritized list that considers both the scale of the impact and the local environmental sensitivity. This can be very helpful for internal strategy and decision-making.
• Cons: While practical for business planning, this specific hybrid method does not align with the requirements for setting targets under the SBTN framework.

Conclusion: Choosing the Right Nature Prioritization Approach for Your Organization

Prioritizing your nature-related impacts is a crucial step towards effective environmental management. The best approach – whether it's assessing overall impact contribution (Approach 1), following the detailed SBTN framework (Approach 2), or using a hybrid method (Approach 3) – depends on your company's specific goals, the data you have available, and how you plan to use the results. Each provides a valuable lens to help focus your resources and efforts where they can make the most difference for nature.