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15+ years on FTSE 100 & Fortune Global 500 disclosures
Canary Wharf, London
LRA educational guidance · Not issued or endorsed by TNFD
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TNFD Evaluate Phase: Environmental Assets, Ecosystem Services, Dependencies and Impacts
How to build causal pathways, assess the state of nature and combine primary, secondary and qualitative evidence
Who this is for
A 11-minute read for reporting teams working through Dependencies, ecosystem services and nature-related risk, and for reviewers testing whether the evidence behind it holds.
Published passport
Current as at 10 August 2026
Reviewed by
Dr Ross KurinkoLinkedIn
Strategic ESG Advisor · IFRS S1 & S2 / GRI / ESRS expert
GRI Certified Global Trainer · PhD, University of Cambridge · ESG-AI expert
15+ years on FTSE 100 & Fortune Global 500 disclosures
Canary Wharf, London
LRA educational guidance · Not issued or endorsed by TNFD
Edition written against
—
Technical limitation: This article is educational and cross-sector. Ecological baseline selection, attribution, impact materiality, valuation, species/habitat …
Published
10 Aug 2026
Knowledge Hub guide
Last reviewed
10 Aug 2026
Short answer
The answer, before the reasoning
The Evaluate phase explains how the organisation and nature affect one another. It links business activities and impact drivers to environmental assets, changes in the state of nature and ecosystem services; identifies the organisation’s dependencies and impacts; measures them where possible; and, where an impact-materiality lens is used, determines which impacts are material under that lens.
Primary data improve precision, but transparent secondary, modelled and qualitative evidence can support an initial assessment when its scale, assumptions and uncertainty are recorded.
Educational practitioner material. TNFD recommendations and LEAP guidance should be applied to the organisation’s facts, stated materiality approach and reporting context.
Quick orientation
Quick orientation
- Quick orientation
- Practical answer
- Applies to
- Assessment locations selected through Locate, including direct operations and priority value-chain interfaces.
- Primary decision
- What are the organisation’s dependency and impact pathways, and which require measurement or escalation?
- Key TNFD components
- E1 identification; E2 pathway analysis; E3 measurement; E4 impact-materiality assessment where that lens is applied.
- Core outputs
- Pathway register, material dependencies/impacts, metrics, reference conditions, data-quality record and inputs to Assess.
Technical status
Current technical position
<p>TNFD’s 2023 Recommendations and LEAP v1.1 remain the final core references. A 2026 TNFD discussion paper proposes further development of state-of-nature measurement; it should be described as consultation material, not as a final amendment to the Recommendations.</p>
1. Evaluate is a causal analysis, not a list of biodiversity topics
A useful Evaluate output shows a chain of cause and dependence. It identifies what the business does, the pressure or beneficial action associated with that activity, the environmental asset and ecosystem affected, the resulting change in nature or ecosystem-service availability, and the consequence for nature, people and the organisation. Without this chain, teams can produce long lists of “water, biodiversity and forests” that are difficult to measure or translate into risk.
In practice
| Component | Core question | Typical output |
|---|---|---|
| E1 - Identification | Which environmental assets, ecosystem services and impact drivers are relevant at the assessment location? | Location-specific inventory linked to business processes. |
| E2 - Dependencies and impacts | How do activities depend on services and change the state of nature? | Dependency and impact pathway diagrams/registers. |
| E3 - Measurement | What is the size, condition, trend, importance or severity of the dependency or impact? | Assessment metrics, qualitative scales, baselines/reference conditions and uncertainty. |
| E4 - Impact materiality | Which impacts are material under the organisation’s stated impact-materiality approach? | Prioritised impact list, rationale, thresholds and evidence. |
In practice
2. Core concepts that must remain distinct
| Concept | Working explanation | Do not confuse with |
|---|---|---|
| Environmental asset | A naturally occurring component of nature that can provide value or support ecosystem processes - for example water, soil, habitat or species populations. | A company-owned asset or a single environmental KPI. |
| Ecosystem service | A contribution of ecosystems to economic and social activity, such as water flow and quality, pollination, flood regulation or erosion control. | A generic environmental “benefit” with no identified user or pathway. |
| Impact driver | A measurable business-related pressure or action that can change nature, such as land-use change, water withdrawal, pollution, extraction or disturbance. | The impact itself; the same driver can produce different outcomes in different locations. |
| State of nature | The condition, extent, integrity and trend of ecosystems and species, considered against an appropriate baseline or reference condition. | Only the organisation’s activity level or compliance status. |
| Dependency | A business reliance on ecosystem services or environmental conditions. | A risk score; dependency is an input to risk, not automatically the risk itself. |
| Impact | A change in the state of nature caused, contributed to or linked to the organisation’s activities or relationships, depending on the applicable assessment lens. | A financial effect, although impacts can create risks and opportunities. |
3. E1: identify environmental assets, ecosystem services and impact drivers
Begin with the business process at each assessment location. A manufacturing plant may depend on reliable freshwater and flood regulation while creating impact drivers through abstraction, effluent, land occupation and noise. A farm may depend on soil fertility, pollination and water regulation while influencing habitat condition and nutrient loading. The same activity should be examined from both the dependency and impact lenses.
Environmental assets: surface and groundwater, soil, habitats, species populations, atmosphere and other components relevant to the location.
Ecosystem services: provisioning services; regulating and maintenance services; and cultural services where they are relevant to business, rights-holders or affected stakeholders.
Impact drivers: the operational or value-chain pressures that can change nature, including land/freshwater/ocean-use change, resource extraction and use, pollution, climate-related pressures, disturbance and introduction or spread of invasive alien species where relevant.
External factors: other users, cumulative pressures, regulation, climate change and ecological thresholds that influence the pathway even when the organisation does not control them.
4. E2: build dependency and impact pathways
A dependency pathway starts with an ecosystem service and asks how business performance changes if the quantity, quality, timing or reliability of that service changes. An impact pathway starts with an activity or impact driver and asks how it changes the state of nature and who or what is affected. The pathways can intersect: excessive water withdrawal can degrade an aquifer on which the organisation and communities both depend.
In practice
| Pathway field | Dependency example | Impact example |
|---|---|---|
| Activity/process | Food processing line. | Agricultural ingredient sourcing. |
| Environmental asset/service | Reliable supply of clean freshwater. | Wetland habitat and water-quality regulation. |
| Driver/change | Drought, competing demand and declining recharge reduce service availability. | Drainage and nutrient runoff alter habitat extent and condition. |
| Importance/severity question | How critical is the service, how substitutable is it and how quickly could disruption affect production? | What is the scale, scope, duration and reversibility of the change, and which stakeholders or species are affected? |
| Evidence | Metering, basin data, operating tolerances, alternative-supply analysis. | Land-cover data, farm practice, water monitoring, ecological surveys and stakeholder evidence. |
Rule
Scale matters
<p>A site can be within an intact catchment but create a local impact, or operate in a degraded landscape where a small additional pressure has disproportionate consequences. Evaluate the pathway at the ecological scale relevant to the service or change, not only at the property boundary.</p>
5. E3: measure dependency importance and impact severity
Measurement should be proportionate to the decision. Not every pathway needs a single monetary value or a highly complex ecological model. The team should select metrics and qualitative criteria that reveal the magnitude, trend and decision relevance of the pathway and that can be repeated over time.
Impact materiality and scoring
TNFD accommodates different materiality approaches. If the organisation uses a broader impact-materiality lens, E4 can apply the criteria and threshold of the relevant framework or methodology. TNFD does not impose one universal numerical scoring scale. The methodology should explain how severity, likelihood for potential impacts, positive impacts, stakeholder evidence and ecological significance are treated and how professional judgement is approved.
In practice
| Assessment dimension | Dependency questions | Impact questions |
|---|---|---|
| Magnitude or intensity | How much of the process relies on the service; what volume, share of output or value is exposed? | What quantity or intensity of the driver occurs, at which location and over what period? |
| Criticality and substitutability | Could the process operate without the service; are alternatives feasible, timely and affordable? | Does the affected ecosystem or species have limited substitutes or high conservation/social importance? |
| State and trend | Is service availability stable, declining or approaching a threshold? | What is the baseline/reference condition, current condition and direction of change? |
| Spatial extent and affected parties | How concentrated is reliance in one basin, landscape or supplier region? | How wide is the affected area and who or what is affected, including IPLCs and other stakeholders? |
| Duration and reversibility | How long would disruption persist and how quickly could the business adapt? | Is the change temporary, recoverable, difficult to remediate or potentially irreversible? |
| Confidence | What proportion is supported by primary monitoring versus proxy/modelled data? | How certain is attribution, magnitude and ecological consequence? |
6. Primary, secondary and qualitative data
Where only secondary or modelled data are available, use them conservatively. A country or sector average can support a screening hypothesis but should not be represented as a measured local impact. Record the geographic scale, time period, model assumptions and plan for validation. Qualitative assessment is legitimate when it is structured, evidenced and transparent; it is not a licence for unrecorded opinion.
Figure 1. Evaluate dependency and impact pathways. London Reporting Academy visual.
In practice
| Evidence type | Examples | Strength — Control needed |
|---|---|---|
| Primary site or supplier data | Meters, permits, ecological surveys, production records, supplier polygons, field sampling, grievance and engagement records. | Directly connected to the activity and period. — Method, calibration, coverage, chain of custody and reviewer. |
| Remote sensing and geospatial data | Land-cover change, habitat extent, water bodies, vegetation indices, fire or disturbance. | Scalable and spatially explicit. — Resolution, classification accuracy, cloud/season effects and validation. |
| Modelled and database evidence | Sector profiles, basin models, species databases, ecosystem integrity indices, input-output models. | Useful for screening and gap filling. — Scale, vintage, assumptions, false precision and applicability to the site. |
| Qualitative expert/stakeholder evidence | Ecologist judgement, local knowledge, community evidence, workshops and operational experience. | Can reveal context and pathways not present in databases. — Source, role, method, divergent views, consent/confidentiality and rationale. |
In practice
7. A practical pathway register
| Field group | Minimum content |
|---|---|
| Location and activity | Assessment-location ID, business process, value-chain stage, product/commodity and reporting period. |
| Pathway | Impact driver; environmental asset; state-of-nature change; ecosystem service; dependency and/or impact statement. |
| Measurement | Metric or qualitative criterion; unit; baseline/reference condition; current result; trend; threshold where relevant. |
| Evidence | Primary/secondary/modelled/qualitative; source; spatial and temporal resolution; coverage; confidence; limitations. |
| Importance/materiality | Dependency criticality; impact severity/likelihood criteria; stakeholder/ecological significance; decision and rationale. |
| Ownership | Data owner, technical reviewer, methodology approver, action owner and next review trigger. |
Hypothetical scenario
Illustrative scenario
<p>A processor relies on clean water and stable soil productivity in a sourcing landscape. Remote sensing indicates wetland decline, while supplier data show increased drainage and fertiliser use. The team maps the impact pathway from drainage and nutrient runoff to wetland condition and water-quality regulation, and the dependency pathway from wetland and soil functions to water treatment cost and crop reliability. Primary farm data cover 35% of volume; the remainder uses a landscape proxy. The assessment therefore reports a high-confidence direct-farm pathway for the covered volume and a moderate-confidence screening conclusion for the remainder, with a supplier-data plan rather than one blended “precise” score.</p>
Illustrative only. It shows how the decision is made, not wording that can be copied or relied on.
In practice
9. Weak versus stronger Evaluate statements
| Weak statement | Problem | Stronger statement |
|---|---|---|
| “The company depends on biodiversity.” | No service, process, location or importance is specified. | “The plant depends on reliable dry-season freshwater flows in Basin X for 80% of production; alternative supply would cover approximately two weeks and is not viable for sustained operation.” |
| “Our water impact is high.” | No driver, quantity, state change, boundary, period or evidence. | “At Site Y, abstraction and discharge are assessed against basin stress, seasonal flow and water-quality indicators; limitations in downstream ecological monitoring are recorded.” |
| “Satellite data prove supplier farms caused habitat loss.” | Modelled correlation is presented as attribution. | “Land-cover data identify a potential hotspot near probable origin areas; supplier polygons and field evidence are required before attributing change.” |
In practice
10. Common mistakes and corrections
| Mistake | Why it is a problem | Correction |
|---|---|---|
| Listing ecosystem services without users or processes | The dependency cannot be assessed or managed. | Link each service to a process, location, importance and substitution question. |
| Measuring only activity data | Withdrawal or hectares managed do not describe the resulting state-of-nature change. | Add state, reference condition and pathway metrics where feasible. |
| Using average model scores as site facts | Coarse data can misclassify local conditions. | Label the proxy, retain scale/uncertainty and validate priority locations. |
| Netting positive and negative impacts | Restoration activity can hide continuing damage. | Assess and report negative and positive impacts separately. |
| Ignoring cumulative and off-site effects | Nature processes cross property boundaries. | Use the relevant catchment, landscape or seascape and consider external pressures. |
| Turning every dependency directly into a risk | The causal step and control environment are skipped. | Complete the pathway, then translate it into risk/opportunity in Assess. |
| No evidence trail for expert judgement | Qualitative conclusions become unreviewable. | Record criteria, participants, evidence, dissent and approval. |
Readiness
11. Evaluate readiness checklist
- Each assessment location is linked to specific business activities and value-chain stages.
- Environmental assets, ecosystem services and impact drivers are separately identified.
- Dependency and impact pathways show causal logic, not only topic labels.
- The ecological scale extends beyond the site boundary where the pathway requires it.
- Dependency importance considers criticality, substitutability, concentration and time horizon.
- Impact assessment explains magnitude, spatial extent, duration/reversibility, affected parties and uncertainty as relevant.
- Metrics use a stated baseline or reference condition where possible.
- Primary, secondary, modelled and qualitative evidence are clearly distinguished.
- Proxy scale, model assumptions, data vintage and confidence are recorded.
- Positive and negative impacts are not automatically netted.
- Impact-materiality criteria and thresholds are stated where E4 is applied.
- Outputs are passed to Assess with location IDs, evidence links and owners.
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The checklists as a working spreadsheet
Every checklist and table on this page, with empty status, owner and evidence columns for your team to fill in and keep.
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