Assess nature risks across agricultural supply chains

Olam Agri is an agri-business operating across food, feed and fibre value chains with owned assets, processing facilities and global sourcing networks. The company depends on ecosystem services such as water supply, climate regulation, soil health and biological control while also contributing to pressures on nature through land use, water use and agricultural production. Declining ecosystem health creates physical risks such as supply disruptions and higher raw material costs, while impacts on nature create transition risks linked to regulation, litigation and reputation. To strengthen its management of nature-related risks and opportunities, the company adopted the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP approach across its operations and supply chains.

Location of the initiative: Global, covering owned plantations, concessions and farms, selected processing assets, and 23 supply chains across more than 170 regions in 15 countries.

The company implemented a nature risk assessment based on the TNFD LEAP methodology to identify, assess and prioritize nature-related dependencies, impacts, risks and opportunities across agricultural operations and supply chains. The assessment covered:

• All owned plantations, concessions and farms.

• More than 50% of Tier 1 processing facilities, defined in the assessment as large manufacturing plants.

• 71% of purchased volumes across cotton, maize, palm oil, rice, rubber, soy, wheat and wood products. (1)

The assessment evaluated key impact drivers including land use, water use, deforestation, and soil, water and air pollution. It also assessed dependence on ecosystem services such as water supply, soil retention, soil quality regulation, biological control and climate regulation. These insights were used to identify both physical risks and transition risks and to prioritize actions for business units.

Figure 1 — The four LEAP phases as applied

The four-phase approach applied across owned assets, selected processing facilities and 23 supply chains.

Figure 2: Commodity risk mapping and ecosystem dependencies

Key commodity sourcing regions and ecosystem service dependencies considered in the assessment. Source: Olam Agri, Response to the Taskforce on Nature-related Financial Disclosures (TNFD), Annual Report 2025 (1).

Sustainability Impact

Climate

This initiative is an enabling measure rather than a direct emissions reduction project. It supports improved management of nature-related dependencies and risks that can influence future climate outcomes across operations and supply chains. The assessment considered global climate regulation as a critical ecosystem service dependency and informed broader environmental risk management processes. (1)

Nature

This initiative is an enabling nature-risk assessment rather than a direct conservation or restoration intervention. As of the 2025 disclosure, the company has not reported an attributable change in ecosystem condition resulting directly from the assessment itself. Instead, the assessment provides the evidence base for action by identifying and prioritizing nature-related dependencies, impacts, risks and opportunities across operations and supply chains.

The assessment covered 71% of purchased volumes across eight key commodities, 23 supply chains and more than 170 regions in 15 countries and prioritized 11 nature-related risks for engagement with business units. These outputs are intended to enable targeted mitigation actions where exposure to nature-related risks is greatest. (1)

Expected nature impact: By integrating the findings into the company's nature strategy and risk management processes, the assessment is expected to support actions that reduce pressures associated with land use, deforestation, water use, and soil, water and air pollution across priority supply chains and operations. Progress will be monitored through the nature-related metrics disclosed under the company's TNFD reporting, including forest management and deforestation indicators, water consumption in water-stressed areas, wastewater recycling, waste generation and recycling, and sustainable sourcing commitments for key agricultural commodities. The assessment has already been integrated into the company's nature-related strategy and overall risk management processes, creating a structured mechanism for translating identified risks into management actions and future nature outcomes. (1)

Social

The assessment incorporates Indigenous Peoples’ rights and local stakeholder considerations when identifying sensitive locations. Indigenous Peoples, local communities, farmers and workers are engaged through environmental and social impact assessments, policy implementation processes and Free, Prior and Informed Consent (FPIC) procedures. The company's broader nature resilience strategy also supports farmer engagement through commodity-specific sustainable sourcing and regenerative agriculture initiatives, including regenagri®-certified cotton sourcing, sustainable rice farming practices such as alternate wetting and drying, and responsible natural rubber sourcing commitments. (1)

Business Impact

Benefits

The assessment helps the company move from a broad understanding of environmental exposure to a prioritized set of actionable risks. Key business benefits include:

• Improved visibility of nature-related risks across global operations and supply chains.

• Prioritization of 11 risks for targeted business unit engagement.

• Integration of nature-related risks and opportunities into enterprise risk management processes.

• Improved preparedness for emerging regulations, including the European Union Deforestation Regulation (EUDR). (1)

• Identification of business opportunities related to resource efficiency, sustainable products, and market access. (1)

Costs

The company does not publicly disclose investment costs, operating costs, subsidies, or payback periods associated with this assessment. (1)

Impact Beyond Sustainability And Business

Co-Benefits

The assessment supports more inclusive decision-making by recognizing Indigenous Peoples, local communities, farmers and workers as stakeholders in landscape stewardship. It also strengthens alignment with internationally recognized frameworks focused on deforestation-free supply chains and responsible land management. (1)

Typical Business Profile

This approach is relevant to organizations that are:

• Agricultural companies operating global supply chains.

• Food, feed, fibre, forestry and other land-intensive sectors.

• Companies beginning or advancing TNFD-aligned disclosure.

• Organizations seeking to integrate nature risks into enterprise risk management.

• Companies sourcing commodities from multiple regions and jurisdictions. (1)

Approach

1. Establish governance and board oversight: place nature, sourcing and land-use policies under appropriate governance structures and board review mechanisms.

2. Define the assessment scope: determine which owned assets, processing facilities and supply chains will be included based on materiality and exposure to nature-related risks.

3. Locate environmentally sensitive sites and sourcing regions: Identify locations where biodiversity importance, ecosystem integrity, water risks or Indigenous rights considerations make the interaction with nature particularly significant.

4. Evaluate nature-related dependencies and impacts: Assess impacts such as land use, water use and pollution, alongside dependencies including water supply, soil quality regulation, biological control and climate regulation.

5. Assess physical and transition risks: Evaluate the likelihood and magnitude of risks associated with nature-related dependencies and impacts.

6. Prioritize material risks with business units: Identify the most significant risks for engagement and management action, including the 11 prioritized risks identified in the assessment.

7. Integrate findings into strategy, risk management and disclosures: Embed assessment findings within nature strategies, enterprise risk management processes and external reporting aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) framework.

Stakeholders Involved

The project lead was the Sustainability Finance team coordinating the assessment methodology and disclosure. Sourcing and asset data are provided by Finance, Operations, and Business Units. Business Units implement sustainable agriculture programmes on ground. The Sustainability Finance team led the integration of identified climate and nature risks into the company's enterprise risk management framework, with the support of the Risk Management team. External data and research providers supplied geospatial and environmental datasets. Other stakeholders included suppliers, smallholder farmers, indigenous peoples, local communities and workers, whose lives and livelihoods are at the core of decision-making and motivation for nature positive outcomes on the ground. (1)

Key Parameters To Consider

• Initiative maturity: the LEAP approach is an established framework with additional Agriculture sector guidance; the company applies it as an early adopter, building on prior assessments (1).

• Technical constraints and pre-requisites: access to global datasets — EXIOBASE, Commodity Footprint, IBAT, satellite data, WRI Aqueduct, World Bank — and to commodity-specific scientific literature, together with supply chain traceability sufficient to attribute purchased volumes to sourcing countries and regions (1).

• Enabling regulation: the EUDR is an explicit consideration, with early compliance treated as an opportunity for access to regulated markets (1).

• Sensitivity of results: assessed water risk depends on the thresholds applied — here, areas with more than 75% area associated with high water stress, drought risk and nutrient levels in surface water, based on World Resources Institute and World Bank databases (1).

• Methodological maturity: nature-related financial risk valuation methodologies are still evolving, which affects how far results can currently be translated into financial terms (1).

Implementation And Operations Tips

• Start with the highest-volume commodities and sourcing regions.

• Use existing environmental datasets before developing bespoke methodologies.

• Integrate nature assessments into existing enterprise risk management processes and business strategy.

• Clearly document exclusions and data gaps to improve transparency and enable future expansion. (1)

External Links

• Company website: Olam Agri | Food & Agriculture & Ag Services

• SUSTAIN_Report_AgriFood_August2024.pdf

Source List

(1) Olam Agri, Response to the Taskforce on Nature-related Financial Disclosures (TNFD), Annual Report 2025 — TNFD-2025