Understanding nature-related risks is becoming increasingly crucial for businesses and financial institutions as environmental challenges accelerate. ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure) is a tool designed to support organisations in identifying and managing their dependencies and impacts on nature. It provides a comprehensive overview of how different sectors interact with nature, helping companies and financial institutions to make more informed decisions to ensure resilience and sustainability, and supporting relevant organisations in assessing risk.
What’s New in ENCORE?
ENCORE has recently undergone significant updates, enhancing its knowledge base. These improvements now offer users more detailed data on how their operations and supply chains may depend on and impact natural capital. Organisations can now access more specific information to assess risks and opportunities, allowing them to build resilience and better support nature
The tool has expanded from covering 92 production processes to 271 economic activities. This broader scope ensures that companies across various sectors can now obtain more detailed insights into their dependencies and impacts on nature and the potential risks they face. The updates also provide data on key value chain links, helping businesses pinpoint which stage of the value chain is likely to be most exposed to nature-related risks.
Why Are These Updates Significant?
These improvements make ENCORE an even more valuable resource for organisations looking to assess their exposure to nature-related risks. With more detailed data and improved functionalities, users can better screen the dependencies and impacts across their value chains. This allows them to adopt strategies that mitigate risks and capitalise on opportunities in a world increasingly affected by environmental change.
Case Study: Netherlands Environmental Assessment Agency
One notable example is the Netherlands Environmental Assessment Agency (PBL), which is using ENCORE’s updated data to enhance macroeconomic analyses of nature-related dependencies. By integrating ENCORE’s improved knowledge base with its Multi-Regional Input-Output (MRIO) model, PBL can better estimate the economic impact of nature dependencies across various sectors. This enables it to perform more accurate risk assessments and compare sectors’ exposure to environmental risks more precisely. The updated materiality ratings provided by ENCORE allow for better comparisons, allowing PBL to identify which sectors are most exposed to nature dependency risks.
How Were the Updates Developed?
These enhancements are based on research conducted as part of the Horizon Europe project, ‘Strengthening Understanding and Strategies of Business to Assess and Integrate Nature’ (SUSTAIN). The technical developments were led by the United Nations Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) in collaboration with the Capitals Coalition, PBL, IUCN, and ETH Zurich. The expertise provided by the SUSTAIN consortium partners helped ensure that the updates are backed by the latest scientific research and best practices, making the tool even more robust for businesses and financial institutions.
ENCORE will continue to be updated based on the latest scientific research, as part of the wider collaboration between ENCORE partners Global Canopy, the United Nations Environment Programme Finance Initiative (UNEP FI), and UNEP-WCMC.
With enhanced data and functionalities, users can now better assess their exposure to environmental risks and adopt more informed strategies. Access more information about the data updates here.