WTW Argues TNFD Can Deliver Better ROI Through Nature-Based Risk Management

WTW's Senior Director for Physical Climate Risk Torolf Hamm argues that risk and sustainability teams can unlock budget and drive long-term value by collaborating on nature-related financial disclosures under the TNFD framework, reframing it as a source of better return on investment rather than a compliance burden. The commentary notes that TNFD principles are already embedded in statutory frameworks including the EU's CSRD.

The TNFD recommends the LEAP framework — Locate, Evaluate, Assess and Prepare — for assessing and disclosing nature-related dependencies, impacts, risks and opportunities, with the main goal of shifting finance toward nature-positive outcomes. Hamm argues that the key challenge for sustainability and risk professionals is moving board conversations on nature from values-based arguments toward value creation, linking nature-based adaptations to demonstrably better investment returns. Risk financing optimisation analytics can model scenarios where nature-based solutions deliver better long-term financial returns than traditional infrastructure approaches.

The commentary illustrates the argument with a flood risk case study: a concrete flood wall may be the conventional answer, but modelling the costs and returns on nature-based alternatives such as planting vegetation or improving soil permeability could reveal better value over time alongside positive outcomes for biodiversity, pollution reduction, and ecosystem health. Such data-driven comparisons can also support competitive bids and strengthen community relationships, generating reputational value alongside financial returns.

Hamm identifies a collaboration gap between risk and sustainability functions: sustainability teams may lack capabilities to model financial impacts of nature-based adaptations, while risk functions may not have access to nature and biodiversity data. Joint efforts across the two functions are more likely to produce robust analysis on both the nature benefits and the ROI side of the equation, making it more likely that senior decision-makers will act proactively on TNFD rather than waiting for voluntary disclosures to become mandatory. CSRD already integrates biodiversity and nature-related risk principles.

Key figure — TNFD LEAP framework