Map and prioritize nature risk in a credit portfolio
CAIXA Economica Federal
CEBDS总结
A national bank piloted a structured approach to locate, assess and analyse nature-related risks across its commercial corporate portfolio, prioritising the most exposed sectors and biomes.
Key resources
Context
Caixa is Brazil's largest 100% state-owned bank, with a nationwide corporate (business-to-business) lending portfolio spanning agriculture, construction and industry (2). Through the activities it finances, the bank is indirectly exposed to nature-related dependencies, impacts, risks and opportunities. Biodiversity loss and ecosystem degradation can translate into credit, physical, regulatory and reputational risks. As a first Brazilian public financial institution classified in the S1 regulatory tier, the bank committed to the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) (3; 4). The bank needed a practical method to understand where nature risk concentrates in its loan book and how climate and nature interconnect.
Location: Brazil, nationwide Organizational scope: Commercial corporate credit portfolio Portfolio data date: 31 December 2024
Solution
The bank implemented the first three phases of the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP approach - Locate, Evaluate and Assess, without the Prepare phase - to identify and prioritise nature-related risks across its commercial corporate portfolio (1; 5). The initiative screened economic sectors by their dependencies and impacts on nature, cross-referenced them with the sensitivity of the biomes where exposures concentrate, and combined this with the bank's internal environmental and physical risk data. The result is a prioritised view of the sectors, biomes and clients where nature risk is most material, guiding engagement, monitoring and disclosure.
Impact
Sustainability Impact
Climate
The initiative is an enabler rather than a direct emissions-reduction measure. The pilot did not directly reduce greenhouse gas (GHG) emissions but strengthens the identification of financed activities that drive land-use change and ecosystem degradation - key underlying causes of Scope 3 (Category 15, Investments) emissions (5;6). By integrating the risk of biome degeneration into portfolio analysis, the pilot enables better-informed decisions on climate-sensitive exposures and provides inputs that will help inform the bank's climate transition plan, which is currently under development.
Nature
The pilot created an enabling outcome for nature-related risk management by making portfolio dependencies and impacts more visible and actionable. It screened approximately 71% of the commercial corporate portfolio, prioritised 11 activities with the highest dependencies (18.78% of the portfolio) and 10 with the highest impacts (17.78%), and flagged the Atlantic Forest and Cerrado as the most sensitive biomes - directing future engagement and monitoring towards the ecosystems most at risk. (5)
Social
No direct social outcome has yet been measured. The pilot mapped civil-society organizations in the priority biomes to support future engagement with local communities and value-chain actors.
Business Impact
Benefits
Strengthened collaboration between sustainability, risk, credit and business functions.
Extended nature-risk visibility from no prior portfolio-level coverage to approximately 71% of the commercial corporate portfolio, across 50 economic activities, within a single assessment cycle.
Produced a repeatable sector-prioritization method that narrows a large, diversified portfolio down to a manageable set of priority activities and biomes for deeper analysis.
Generated inputs that can support refinement of internal socio-environmental risk-management systems and future nature-related disclosure.
Costs
Operating costs: Limited and mainly internal - staff time from sustainability, risk and credit teams, plus specialist consulting support.
Investment: Limited; the pilot primarily used existing internal systems and publicly available or already-licensed datasets.
Subsidies used: None.
Main cost dependency: The availability and granularity of geolocated exposure data, with incomplete data increasing manual analysis.
Costs can be minimised by starting with a representative portfolio pilot, reusing existing risk systems, and progressively improving data granularity rather than waiting for complete data.
Impact Beyond Sustainability And Business
Co-Benefits
Improved data governance and a shared nature-related risk vocabulary across participating functions and created a basis for more integrated climate and nature discussions.
Potential Side-Effects
Sector- and biome-level screening can oversimplify client-specific realities. The results should therefore be used as a prioritization lens rather than a final judgement - and followed by client-level engagement and more granular geospatial data where available.
Implementation
Typical Business Profile
The approach is most relevant for banks, asset managers, development banks with diversified commercial corporate portfolios exposed to nature-intensive sectors, at an early-to-intermediate stage of their nature-positive journey. It is particularly applicable in geographies with high biodiversity value and sectors such as agriculture, food, construction and manufacturing.
Approach
Define the scope. Select the portfolio, reporting date, portfolio terminology and decision use for the assessment.
Locate nature exposure. Map economic activity codes (national CNAE codes, convertible to ISIC) to nature dependencies and impacts using a recognized screening source such as ENCORE, and link exposures to biome information using a national land-cover dataset.
Evaluate priority activities. Rank activities by dependency and impact scores, retain those in the highest materiality classes, then select the largest credit exposures within each prioritized activity as the working sample.
Assess risk sensitivity. Compare prioritized exposures against biome sensitivity and internal environmental and physical risk data, producing a combined risk view per asset.
Review and validate. Bring sustainability, risk, credit and business teams together to challenge data assumptions, interpret limitations and agree priority areas.
Plan the next phase. Use the findings to guide more granular analysis, client engagement, monitoring, risk management and preparation for TNFD-aligned disclosure.
Stakeholders Involved
Project Leads: the bank's sustainability function coordinated the industry pilot.
Company functions: sustainability, risk management, credit and business teams contributed data, interpretation and validation.
External support: a specialist sustainability adviser and a collaborative industry convenor provided technical and process support.
Other stakeholders: conservation-focused non-governmental organizations active in the priority biomes were identified and mapped during the pilot. They had no role in conducting the assessment; the mapping was one of its outputs, intended to inform future engagement and knowledge exchange.
Key Parameters To Consider
Maturity: the approach combines established screening datasets with an emerging practice for portfolio-level nature-risk assessment.
Implementation timeline: a first screening cycle of this scope can typically be delivered within one business quarter; in this case the pilot ran from May to August 2025 (5).
Technical prerequisites: the key pre-requisite is geolocated portfolio data mapped to biomes; multiple data sources were integrated to fill gaps.
Geographical and sector relevance: highly relevant where portfolios are concentrated in nature-intensive sectors and biodiversity-sensitive locations.
Implementation And Operations Tips
Start with a prioritized portfolio subset and treat the first cycle as a learning exercise.
Combine complementary datasets, apply expert judgement and cross-functional review where data is incomplete.
Embed lessons into data governance, then progressively expand portfolio coverage and analytical depth.
Going Further
External Links
Caixa's TNFD LEAP pilot case study - Reflections of a Brazilian bank applying the LEAP approach within its commercial corporate credit portfolio