The Missing Line Item: Financial exposure hidden in environmental dependencies

Businesses measure the factors that drive financial performance. Yet the environmental resources they rely on rarely appear in that analysis: water availability, raw materials, healthy soils, protection from storms. When those resources deteriorate or become unavailable, the result can be operational disruption and material financial exposure.

Developed in association with Lloyds, The Missing Line Item shows how businesses can identify these dependencies and translate them into financial terms using Nature Value at Risk (Nature VaR), a metric that estimates the proportion of value potentially at risk in a severe but plausible year. Three case studies show why exposure is location-specific: two sites can look identical on paper and carry very different financial exposure.

Inside the report:

• Nature VaR methodology (page 8) — how the metric estimates potential exposure, the 1-in-20-year scenario it uses, and the data behind it
• International Paper (page 9) — two paper mills and a fibre sourcing region in the southern US, where the highest estimated exposure sits on land the company neither owns nor operates
• Three manufacturing facilities (page 14) — one industrial group, three sites, materially different sources and levels of exposure
• Two data centre sites (page 18) — Boulder and Columbus, where water supply dominates the risk profile at both sites, though not to the same degree