A growing number of financial institutions are recognizing the gravity of nature-related risks and incorporating them into their risk management strategies.

According to the 2025 global survey on nature risk management conducted by the Global Association of Risk Professionals ( GARP ), 73% of respondents have introduced the concept of nature risk into their respective organizations, while 27% are looking into it. The survey covered 48 financial institutions.

For the Taskforce on Nature-related Financial Disclosures ( TNFD ), nature consists of four realms – land, ocean, freshwater, and atmosphere. This concept is broader than climate change and holds significant importance in economic activities. As such, it deserves the attention of regulators, investors, business leaders, and financial professionals.

The GARP survey evaluates the nature risk management capability of financial institutions across six dimensions: governance; strategy; risk management; metrics, targets, and limits; scenario analysis; and disclosures. It then compares the results with those of the previous year to measure the progress of financial institutions and the areas where improvements are needed.

Overall, the survey finds that financial institutions are advancing in their understanding of nature and its associated risks, but there is a sizeable variance among them in terms of the maturity of their practices across the six dimensions. The best-performing institution has a maturity score, as measured by GARP, that is 25 times higher than that of the worst performer.

In terms of governance, the survey finds that 50% of firms have established board oversight of nature-related risks, while 35% plan to set up a governance structure. Both dimensions have marginal growth from last year’s 46% and 31%, respectively. External disclosures and regulation are the most frequently discussed subjects among board members.

Strategy-wise, the survey finds that more companies regard nature as a risk factor rather than an opportunity, especially in the long term. More than 70% of respondents are unsure of their strategic resilience against nature risks, noting that the main hurdles to establishing an effective risk management strategy are the lack of data and reliable models. On the other hand, 38% do not yet have a nature strategy in place.

When it comes to risk management, an increasing number of respondents are embedding nature risk into other standard types of risks such as credit risk and reputational risk. Specifically, 21% of respondents are using metrics, targets, and limits in managing nature risks, 21% are progressing towards doing so, while for 50%, the matter is still being considered. Meeting regulatory requirements and minimizing the impact of their portfolios on nature are the top two motivations.

Finally, the use of scenario analysis in nature risk management remains limited, similar to the previous year. However, the disclosure rate for nature-related matters has increased across major aspects, suggesting an improved transparency in the financial institutions’ management of nature and its associated risks.