Case Study: How Nedbank uses ENCORE to assess dependencies and impacts on nature

Case Study: How Nedbank uses ENCORE to assess dependencies and impacts on nature

Company name: Nedbank Group
Headquartered: Johannesburg, South Africa
Date: 2026

Nedbank is one of Africa’s largest financial institutions, offering wholesale and retail banking with total assets of R 1.4 trillion (South African Rand, approximately USD 80 billion). The bank has its main presence in South Africa and operations in Lesotho, Mozambique, Namibia, Eswatini and Zimbabwe, with offices in global financial centres, and is a signatory of the UN Principles for Responsible Banking.

This case study explores how Nedbank used ENCORE to support the first phase of its nature risk assessment, which is adapted from the Taskforce on Nature-related Financial Disclosures’ (TNFD) LEAP (Locate, Evaluate, Assess and Prepare) approach. As Nedbank enters the second phase of its assessment, it is exploring how findings can guide its nature strategy and support the management of nature risk.

The case for assessing nature

Nedbank’s 2024 Nature Position Statement recognizes that nature provides essential services and resources for many businesses, degradation of nature can create risk for the businesses it finances, and solutions focusing on mitigation and restoration can be opportunities for business and financial institutions.

In the Southern African regions where Nedbank operates, many of the ecosystems that underpin key primary sectors are in decline or under threat. For example, South Africa, where 90% of Nedbank’s assets are held, is one of the most biodiverse countries in the world, home to unique ecosystems and high levels of endemism. However, almost half of ecosystems are categorized as threatened, particularly wetlands and estuaries, and about 73% of agricultural land is degraded.

To support the management of nature risk, Nedbank has built internal capacity to assess and disclose nature-related dependencies, impacts, risks and opportunities through its nature risk assessment, which is broadly aligned with the TNFD’s LEAP approach. It is also taking steps to manage nature risk at the transaction level through its social and environmental management system.

Why Nedbank uses ENCORE for its nature risk assessment

Getting started with nature-related risk assessment can be challenging for financial institutions, whose exposure to nature risk is often spread across large and diverse portfolios, and relevant data are difficult to access. ENCORE is a useful entry-point. This web-based tool and its knowledge base sets out how 271 economic activities depend on ecosystem services and exert pressures which can impact ecosystem components. It can support financial institutions to identify the most material nature issues for their portfolio and to prioritize sectors and clients for further assessment.

One of the reasons Nedbank chose ENCORE was its alignment with the TNFD’s LEAP approach, which adopts the principle that businesses assessing nature-related risks and opportunities must first identify how their operations depend on and impact nature. Nedbank also highlighted the fact that because ENCORE data is free, the bank did not need to purchase costly third-party data or allocate resources to acquire information from clients.

Nedbank’s approach to assessing nature risk

Nedbank published its first nature risk assessment in 2025, focusing on the Locate and Evaluate phases of the TNFD LEAP approach. The first phase of the assessment involved two stages.

1. Using ENCORE to identify sectors in its portfolio with the most material dependencies and impacts on nature.
2. Using client location data and geospatial datasets to assess potential risks arising from exposure to ecologically sensitive locations.

First, Nedbank mapped its sector classification codes, based on Standard Industrial Classification (SIC), to the International Standard Industrial Classification (ISIC) codes used by ENCORE. Nedbank then used ENCORE to evaluate how each sector in its portfolio depends on ecosystem services and exerts pressures which can impact stocks of natural capital.

Based on ENCORE’s materiality ratings, Nedbank then assigned dependency and impact scores for sectors in its portfolio. The 13 sectors with the most material exposure are compared in the chart below. Financial data is also included in the analysis, with the size of each bubble in the chart representing the bank’s financial exposure to each sector.

Figure 1. A bubble chart from Nedbank’s 2024 Climate report compares nature-related impact and dependency scores for 13 sectors in Nedbank’s portfolio. Nedbank’s relative financial exposure to each sector is indicated by the size of each bubble.

Six priority sectors were selected for the Locate and Evaluate phase, based on Nedbank’s financial exposure and sector impact and dependency scores: agriculture, mining and quarrying, manufacturing, energy, wholesale and retail trade, and real estate. While the real estate sector represents the bank’s largest financial exposure, it has comparatively lower nature-related impacts and dependencies than sectors such as agriculture and mining and quarrying.

In the second stage, Nedbank identified two clients from each sector for further assessment. These 12 clients represented approximately R 20 billion (USD 1.2 billion) of financial exposure for Nedbank. Using additional local datasets, each client’s operations were assessed for exposure to sensitive locations, where nature is either protected or at risk, and the businesses’ dependencies and impacts on nature are likely to be most material.

For example, Nedbank mapped a mining client’s operations for overlap with two geospatial data sets: South Africa’s Strategic Water Source Areas and Critical Biodiversity Areas.

The Critical Biodiversity Areas assessment identified operational sites overlapping with Critical Biodiversity Areas and globally recognized centres of biological endemism. Poorly managed impacts on biodiversity in these areas might expose clients to nature-related transition risks, including reputation and policy risk.

The assessment of South Africa’s Strategic Water Source Areas focused on operations that interfaced with a Strategic Groundwater Resource Area and regions of water stress. In these regions, the mining sector’s high dependencies and impacts on water may expose the client to potential physical and transition risks.

Findings and next steps for Nedbank’s nature risk assessment

Phase one of Nedbank’s assessment found all subsectors in the analyzed portfolios depend on at least one ecosystem service, with most exhibiting a very high dependency on multiple ecosystem services. By prioritizing 12 clients for further analysis, Nedbank identified client operations where nature-related impacts and dependencies may expose the client and the bank to financial risk.

The second phase of Nedbank's assessment is underway, focusing on the Assess and Prepare stages of LEAP, this includes;

• Assessing specific risks and opportunities for prioritized sectors and clients.

• Conducting nature-related scenario analysis to assess the materiality of nature risks under a range of scenarios.

As Nedbank develops its approach to assessing nature risk, it is also taking steps to manage nature-related risk, including

Integrating nature into credit risk analysis through its social and environmental risk management system.

Developing a nature-transition plan which will complement its net-zero transition plan scheduled for disclosure in 2026.

Aligning its nature risk assessment with nature investments – Nedbank is a supporter of the World Wide Fund for Nature (WWF) through strategic partnerships, including the WWF Nedbank Green Trust. The bank will explore how risk assessment findings can contribute to work already being done through these partnerships.

Nedbank is one of hundreds of organizations using ENCORE to support the assessment of nature-related financial risks. This case study demonstrates how the tool and its data can serve as a useful entry point for beginning nature-related risk assessments, helping to identify and prioritize the nature issues and sectors most likely to pose risks within a portfolio. ENCORE was developed by Global Canopy, UNEP FI and UNEP-WCMC and can be found here.

Many thanks to Jabu Sello, Climate Change & Environmental Risk Analyst, Liza Botha Head ESG Risk and Stuart Inglis, Senior Programme Manager at Nedbank for their support with this case study. Photo by Tayla Kohler on Unsplash.