Lexology: nature risks reach boards
- Lexology on April 27 said biodiversity loss has become a boardroom legal risk, pushing directors and in-house lawyers beyond voluntary environmental reporting. - The article ties legal exposure to disclosure, supply-chain due diligence and risk oversight as companies adopt TNFD-style assessments of nature dependencies. - The shift follows new disclosure frameworks and rising director-duty warnings around nature risk. (lexology.com)
Biodiversity loss is moving from sustainability teams to board agendas, and Lexology says in-house lawyers now need to treat it as a core legal risk. (lexology.com) Lexology’s April 27 article, written by Eden Spence, says companies are still underprepared even as nature risk shifts into strategic risk management. It points directors and legal teams toward disclosure controls, liability reviews and enterprise-risk processes. (lexology.com) The underlying issue is simple: businesses depend on ecosystems for water, soil, pollination and stable supply chains, and those systems are degrading. The World Economic Forum has estimated that $44 trillion of economic value generation is moderately or highly dependent on nature. (weforum.org) That dependence is now being translated into governance language. The Taskforce on Nature-related Financial Disclosures says its framework is built to help organizations identify, assess, manage and disclose nature-related dependencies, impacts, risks and opportunities. (tnfd.global) The practical tool inside that framework is called LEAP: Locate, Evaluate, Assess and Prepare. TNFD says companies can use it to map where they interact with nature, measure dependencies and impacts, judge risks and opportunities, and prepare responses and reporting. (tnfd.global) Lexology’s argument is that legal departments have to connect that operational mapping to directors’ duties. That means checking whether public disclosures match internal evidence, whether supply-chain contracts reflect nature exposure, and whether board papers treat biodiversity loss as a live enterprise risk. (lexology.com) Other legal advisers are making the same case. Gowling WLG said on April 16 that nature-related risk now affects governance, legal compliance, operational resilience and long-term value, not just environmental policy. (gowlingwlg.com) Director-focused groups are also framing this as a duty question. Chapter Zero says board presentations on TNFD should help directors use nature-risk mapping to strengthen governance and get ahead of compliance demands. (chapterzero.org.uk) The pressure is not just theoretical. The Institute of Chartered Accountants in England and Wales said in 2025 that TNFD guidance warned most businesses were still not adequately accounting for nature in governance, strategy, risk management and capital allocation. (icaew.com) So the boardroom question is no longer whether nature matters. It is whether companies can show, in minutes, controls and disclosures, that they identified the risk before it identified them. (lexology.com)
