As a provider of essential materials to 95% of all manufactured goods worldwide, the chemical industry is increasingly aware of its significant impact and dependencies on nature, and the role it has to play in delivering innovative solutions for the nature crisis. This recognition is now moving from limiting its emissions to protecting natural resources, supporting a circular economy, examining new ecological products and innovations, using natural crop protection and building sustainable and resilient value chains. Leading chemical companies have long managed nature and water risks, integrating a nature-first approach as a core part of their sustainability strategies. With the inclusion of nature and water in the Corporate Sustainability Reporting Directive (CSRD) and launch of the Taskforce on Nature-related Financial Disclosures (TNFD), all major chemical companies now need clear nature strategies to meet stakeholder demands and make informed business decisions that create value, integrating a nature-first approach as a core part of their sustainability strategies.

The need to collect and interpret nature data has grown to meet expectations around actionable decisions that create tangible opportunities and improve companies’ relationship with nature. The chemical industry, along with its sub-industries agrichemical and agri-technology, is positioned to lead the charge of using nature data and technology to drive critical business decisions that go beyond the expectations of frameworks and lead to a sustainable way forward.

Striving toward nature positivity

All industries have a role to play in fostering a planet where nature and its resilience are prioritized. By striving towards nature positive outcomes, as defined by the Global Biodiversity Framework, companies commit to halting and reversing nature loss. The Nature Positive Initiative details that this can be achieved by increasing the health, abundance, diversity and resilience of species, populations and ecosystems so that by 2030, nature is visibly and measurably on the path of recovery compared to the baseline set in 2020. By 2050, nature must recover so that thriving ecosystems and nature-based solutions continue to support all future generations.

A nature positive strategy should also encompass collaboration across the value chain, including recognition of impacts and dependencies. More work is needed to achieve a chemical industry consensus on what should be included to achieve this.

The growing need for nature data

The recognition of nature’s importance forms an essential part of the foundation of multiple regulations and frameworks, specifically the CSRD, TNFD and the European Union Deforestation Regulation. These require companies to assess their impacts on nature and provide data to substantiate their sustainability efforts.

However, quantifying and understanding the impact is only the beginning. To drive real transformation, companies must assess their impacts and dependencies on nature, set goals and take meaningful action. ACT-D, which stands for Assess, Commit, Transform and Disclose, is a set of high-level business actions developed by leading organizations for companies aiming to make a contribution to a nature positive future. It supports companies who are just getting started in taking actionable steps to reverse nature loss and builds on existing action frameworks and guidance.

Similarly, ENCORE is a valuable tool that companies can use to understand their impacts and dependencies on nature compared to others in their industry. Aligned with the TNFD framework, it can help with the important first step in identifying nature-related risks and using a broad industry benchmark. As a sub-section of the tool, a biodiversity model was created specifically for the agricultural industry, as well as for the mining industry, setting critical goals for nature within these sectors.

When evaluating the importance of nature topics through a double materiality process, nature doesn’t always emerge as a top priority. Why not? This process is often conducted at a level that may overlook site-specific impacts or fail to fully assess the value chain, largely due to data gaps and the absence of reliable baselines. This can also reflect the relative immaturity of nature-related topics compared to climate and carbon issues, and the limited "nature literacy" among stakeholders. As science and data around nature impacts and dependencies improve, we can expect more detailed findings and a deeper understanding of nature's significance at the corporate level. Companies can already counter this by doing site-specific Locate-Evaluate-Assess-Prepare (LEAP) assessments, resulting in more informed business strategies.

Interpreting complex, fractal and incomplete data

Nature data is inherently complex, encompassing layers of information related to biodiversity and species, water, ecosystem state and how this has changed over time. Collecting accurate, site-specific data across global assets and value chains is challenging yet essential, as this data builds the foundation for making important business decisions. However, companies often find their data incomplete, especially when it comes to upstream and downstream information where they are a step removed, and there may be many thousands of sites to assess. To ensure a complete database, trained nature data expertise is needed to specify needs, collect the data from company stakeholders or source it from third-party providers, and ensure it is robust and reliable.

It is also possible that sophisticated methods to gather data are already being applied within the value chain, only for different purposes. Examples within the agrichemical and -technology industry are data for optimizing crop production, soil health and invasive species. These data can often be reworked for nature and biodiversity purposes, if sufficiently detailed.

Information and insights are not synonymous, and a science-based approach to interpretation is essential. When companies fully grasp the insights their data provides, they can begin to set meaningful targets and, more importantly, act on them.

Better nature-related data leads to better business decisions

To move forward with effective nature strategies, the chemical industry must close its nature data gaps—both within its operations and across its value chain. The key impact drivers that must be monitored and reduced are mostly related to land use, climate change, water ecosystems and ecotoxicity. For aquatic impacts, this includes wetland conversion and land use in catchments.

For better decision-making, companies should consider:

  • Collecting with purpose: ensuring data is decision-relevant, so its collection is not just a disclosure exercise. Ensure the same data set feeds into the company’s financial modeling and internal decision-making. Doing so makes disclosure an impact-driven exercise that increases the company’s value.
  • Recognizing site-specific realities and complexities: using benchmarks against industry leaders is a good way to inform your company toward strategic goals. However, be aware that site-specific realities might contradict them (e.g. corporate water replenishment targets may not align perfectly with flood mitigation needs at a community level from the get-go, despite best intentions).
  • Focusing on value chain impacts and dependencies: As a highly material part of the value chain, get to know your upstream value chain and ensure that the data sample is statistically relevant and reliable. That way, you won’t have any blind spots and can be confident in your nature positive claims.
  • Starting to forecast customer use: explore product impacts and dependencies. The closer the relationship and understanding, the easier it will be to co-develop sustainable solutions in the long run, allowing your customers to better adapt to an ever-changing market.
  • Looking at the complete sustainability picture: every business decision made today should consider the changing climate, impact on nature and human rights together. Optimize your thinking by making decisions on these factors collectively and consider whether there are intersections between topics.

Advancing your company’s nature strategy

Exploring and progressing your company’s maturity in nature-related practices must go beyond compliance. Chemical companies rely heavily on resources like water, minerals, biomass and energy resources, making nature preservation essential to the future of both your business and the planet. By prioritizing nature, companies not only mitigate risks but also unlock opportunities by strengthening value chain resilience, innovating new processes and enhancing brand reputation.

Staying ahead of the curve allows you to have a clear understanding of your company’s relationship with nature and to retain the license to operate. Start by understanding your current position and collecting the most important nature data for your company. Use this information to set nature-based targets and continue to monitor your performance and adapt your strategy when needed. Possible outcomes include improving water stewardship, sourcing responsibly and switching to sustainably sourced materials, support nature conversation and restoration. However, the big challenge is to examine the value chain and construct a sustainable product journey from start to finish.

If internal experience is lacking, assess available resources to build capacity accordingly. Without experts to analyze your data, you risk oversimplification, misinterpretation and potential blind spots. Leveraging strong technical expertise and digital resources will help turn financial data and scientific insights into meaningful and actionable nature-based strategies.