SUSTAINABILITY

Organisations that can embed regulatory intelligence such as this directly into its decision-making frameworks could more proactively target market volatility – potentially supporting more precise risk management.“ A regulatory technology platform can monitor developments across regulators and policymakers, identify which regulatory changes could affect a financial institution and map those changes against its business activities,” Saffron says.“ For example, if a new climaterelated regulatory requirement affects a particular lending sector, the important KPI isn’ t simply‘ a new regulation has been identified’. It’ s: What percentage of our portfolio is affected? What is the cost of compliance? What assets or revenue are potentially exposed? What capital allocation decision should follow? That is when sustainability data becomes financial intelligence.” This approach is especially vital when looking at the management of environmental dependencies. Applying a similar level of rigour to nature-related risks, finance teams can look to manage more abstract ecological concerns through the lens of concrete, financial impacts. When evaluating these natural capital dependencies – for instance, ecosystem degradation or water scarcity, Cara believes that finance teams need to map environmental pressures directly to operating costs and asset impairment.

Private capital investments in nature projects have increased roughly five-fold over the last decade

“ Translate the nature dependency into a financial consequence,” she advises.“ Water stress, for example, might mean higher input costs, production disruption or additional capex. From there, finance can express the risk as revenue at risk, EBITDA at risk, expected loss or asset impairment. Nature may be the source of the risk, but finance needs to understand where it lands financially.”

What is the‘ cost of doing nothing’? Building up this understanding is crucial for finance teams – with leadership teams often struggling to justify spending on green initiatives and climate resilience, as these investments often do not yield a quick financial return. But attitudes around environmental investments are changing.

104 October 2026