Agriculture & Food Systems
Agriculture is the single greatest driver of terrestrial biodiversity loss on Earth. The IPBES Global Assessment (2019) identifies land-use change - primarily driven by agricultural expansion - as the leading pressure on biodiversity worldwide. At the same time, food systems are themselves profoundly dependent on nature: pollinators, healthy soils, freshwater, and stable climate are all ecosystem services that underpin agricultural productivity. This dual role, as both a major driver of biodiversity loss and a major dependent on ecosystem services, makes the food and agriculture sector a priority area for TNFD disclosure and nature-related risk management.
Land Use Change and Deforestation in Supply Chains
Agricultural expansion is responsible for approximately 80% of global deforestation. The conversion of forests, wetlands, and grasslands to cropland and pasture destroys habitat, fragments ecosystems, releases stored carbon, and eliminates the full suite of ecosystem services those biomes provide. For corporate food and agriculture companies, the deforestation risk is often concentrated in upstream supply chains rather than in directly operated assets.
Four commodities - soy, beef, palm oil, and wood products - account for the majority of tropical deforestation linked to commerce. Companies sourcing these commodities from high-deforestation-risk regions (the Amazon basin, the Cerrado, Southeast Asian peatlands, Central African forests) carry significant nature-related transition and reputational risks, particularly as regulations such as the EU Deforestation Regulation (EUDR) require due diligence on deforestation-free supply chains.
Key Dependency: Land as a Productive Asset
Agriculture depends directly on soil structure, nutrient cycling, water regulation, and pollination - all ecosystem services delivered by biodiversity. As these services degrade, input costs rise (more fertiliser, more irrigation, more pesticide), yield variability increases, and the long-run productive capacity of land declines. TNFD treats agricultural land dependency on ecosystem services as a core physical risk exposure.
Pollinator Dependence
Approximately 75% of global food crop species depend on animal pollinators - primarily bees, butterflies, flies, and birds - for at least part of their reproduction. Crops with high pollinator dependence include almonds, apples, cocoa, coffee, blueberries, and many oilseeds. The IPBES Pollination Assessment estimated that pollinator-dependent crops represent USD 235-577 billion in global annual agricultural production value.
Pollinator populations are in significant decline, driven by pesticide use (particularly neonicotinoids), habitat loss from monoculture intensification, disease, and climate change. For food companies with high pollinator-dependent crop exposure in their supply chains, this represents a material dependency risk: reduced pollinator availability can directly constrain yields and increase production costs.
Water Use and Soil Degradation
Agriculture accounts for approximately 70% of global freshwater withdrawals. In water-stressed basins, agricultural water use can directly threaten the aquatic ecosystems and wetlands that depend on adequate river flows and groundwater recharge. Companies with operations or suppliers in water-scarce regions face both regulatory risk (water use restrictions) and physical risk (reduced water availability constraining production).
Soil degradation - through erosion, compaction, salinisation, and nutrient depletion - affects an estimated 33% of global agricultural land. Healthy soil is a complex ecosystem hosting billions of microorganisms per gram that drive nutrient cycling, carbon sequestration, and water retention. Industrial farming practices that disrupt soil structure reduce the productive capacity of land over time and increase dependence on synthetic inputs.
Analogy: The Farm as an Ecosystem Service Consumer
Think of a farm as a factory that receives most of its key inputs - pollination, water filtration, pest control, nutrient cycling - for free from the surrounding ecosystem. As long as the local ecosystem is healthy, these inputs flow in at no cost. When biodiversity declines, the factory must purchase substitutes (synthetic fertilisers, irrigation infrastructure, pesticides) at significant expense. TNFD asks companies to disclose how dependent their value chains are on these "free" ecosystem inputs and what happens to the business model when they are no longer available.
TNFD Sector-Specific Guidance for Agriculture
TNFD's sector guidance for food, agriculture, and beverages identifies the following priority nature-related issues for disclosure:
- Land conversion and deforestation in sourcing areas
- Water use intensity and exposure to water-stressed watersheds
- Soil health metrics and land degradation trends
- Pollinator dependency by crop category
- Use of agrochemicals and their impact on soil and aquatic biodiversity
- Exposure to protected areas and Key Biodiversity Areas (KBAs) in land holdings and sourcing geographies
Companies are expected to apply the LEAP approach to map where in their value chains these dependencies and impacts are most material, and to set targets for reducing negative impacts on nature - ideally aligned with Science Based Targets for Nature (SBTN) methodologies.
Case Study: A Cocoa Supply Chain
Example: Cocoa and Forest Loss in West Africa
Cocoa production is responsible for significant deforestation in West Africa, including in Ghana and Cote d'Ivoire, which together supply approximately 60% of global cocoa. A major chocolate manufacturer sourcing cocoa from these regions faces multiple nature-related risks: transition risk from stricter EU Deforestation Regulation requirements (proof of deforestation-free supply chains required from 2025), physical risk from climate change reducing suitable cocoa growing areas, and dependency risk from declining pollinator populations in degraded forest landscapes. TNFD guidance would require this company to: (1) map its sourcing origins against deforestation risk maps and protected area boundaries, (2) assess its dependence on pollination services for yield, and (3) disclose targets for achieving deforestation-free cocoa supply chains within a defined timeframe.
Applying the LEAP Approach in Agriculture
For an agricultural company or food manufacturer applying LEAP, the Locate phase involves mapping farm-level sourcing geographies against biodiversity sensitivity layers - including the IBAT (Integrated Biodiversity Assessment Tool), the Global Forest Watch deforestation alerts, and ENCORE's ecosystem service dependency maps. The Evaluate phase assesses which ecosystem services (pollination, soil formation, water regulation) are most critical to production and where the highest-impact activities occur.
The Assess phase quantifies nature-related risks: physical risks (yield impacts from ecosystem degradation), transition risks (regulatory requirements for deforestation-free sourcing), and reputational risks (consumer and investor pressure). The Prepare phase involves setting reduction targets, engaging with suppliers on sustainable land management practices, and drafting disclosure aligned with TNFD's recommended metrics for the food and agriculture sector.
Key Takeaways
- 1Agriculture is both the leading driver of global biodiversity loss (through land conversion) and profoundly dependent on ecosystem services including pollination, soil health, and freshwater regulation
- 2Deforestation in agricultural supply chains is concentrated in four key commodities: soy, beef, palm oil, and wood products, with significant exposure in the Amazon, Cerrado, and Southeast Asian peatlands
- 3Pollinator-dependent crops represent USD 235-577 billion in annual production value globally, making pollinator population declines a material financial risk for food companies
- 4TNFD sector guidance requires food and agriculture companies to map supply chain geographies against biodiversity sensitivity data and disclose targets for nature-related impact reduction
- 5The EU Deforestation Regulation creates a regulatory transition risk requiring companies to demonstrate deforestation-free supply chains from 2025