At the foot of a limestone hill in Perak, the tidy and convenient lines between nature and business start to blur. Formed from soluble carbonate rock, these karst outcrops are among the region’s most distinctive landscapes. They provide wildlife habitats, supply raw materials and draw tourists. Their ecological value, however, is easily underestimated.
According to a 2024 study, 538 plant species were recorded across Perak's limestone karsts, including 71 endemic and 108 threatened species [1]. Ten, in fact, were known from only a single karst. Each outcrop is therefore a tiny world of its own, and losing one can mean losing species found nowhere else.
These landscapes can also carry highly localised physical risks. The Banjaran Hotsprings Retreat is a luxury wellness retreat that sits in a valley beside ancient limestone hills [2]. In November 2020, a landslide at the property took the lives of two guests [3]. The Perak Government ordered the resort to close temporarily, while the state Minerals and Geoscience Department identified further unstable rock blocks. Officials cited intense rainfall, water pressure within cracks and weathered limestone as contributing conditions [4]. No public account attributed the landslide to quarrying or to the resort’s operations. So, that leaves a much narrower, but also more defensible, business lesson:
Location matters. The condition of a natural setting can create safety, business-interruption, insurance and reputational consequences with little to no warning.
And that is the root of the matter.
Ecological significance becomes financially material when its consequences reach a company’s prospects. Nature is gaining prominence in corporate reporting, yet businesses are still learning to translate this awareness into strategy, risk management, capital allocation and operations [5].
This question carries particular weight across ASEAN. Biodiversity-rich landscapes sit alongside economies built in part on agriculture, plantations, fisheries, property, infrastructure, energy, utilities, with further consequences for tourism and finance. Environmental degradation or physical disruption can reduce destination appeal, interrupt hospitality operations and damage local livelihoods, while banks, insurers and investors may absorb the resulting credit, underwriting and asset-valuation risks. Materiality will differ by company, location and time horizon. The assessment is therefore company-specific: where does a business meet nature, what does it depend on or affect, and could the answer alter enterprise value?
At the same time, sustainability reporting architecture continues to develop. IFRS S1 and IFRS S2 establish a global baseline for sustainability-related financial disclosure [6]. In April 2026, the International Sustainability Standards Board (ISSB) agreed to propose nature-related guidance in the form of an IFRS Practice Statement, drawing on the Taskforce on Nature-related Financial Disclosures (TNFD). An exposure draft is targeted for October 2026 and will be subject to public consultation, including on whether a Practice Statement is the right form [7].
ISSB Chair Emmanuel Faber put the point plainly:
“Providing material nature-related disclosures is not optional; IFRS S1 already requires that. A Practice Statement will guide companies on how to provide such disclosures.” [7]
The proposed guidance is still being shaped but the underlying obligation is not: companies applying IFRS S1 already need to disclose material sustainability-related risks and opportunities, including those connected to nature. However, attempting to catalogue every species, ecosystem service, dependency, impact and possible financial transmission pathway across the entire value chain would rarely be proportionate. The practical task is to instead find the few nature-related issues that could alter revenue, costs, assets, financing or strategy, and explain them before events do the explaining.
As of May 2026, the numbers reveal a broad field for assessment and a remarkably quiet register. Across Bursa Malaysia, the Singapore Exchange, and Thailand’s SET and mai, 2,631 issuers are listed. Among them are companies operating in agriculture and plantations, mining and materials, energy, oil and gas, utilities, construction and property development. These sectors rely directly on land, water, minerals, biological resources and ecosystem services, while also placing pressure on nature through extraction, pollution, land conversion and physical development.
In Malaysia, 276 of 1,099 issuers, or 25.1%, sit within these sectors. In Singapore, 262 of 601 issuers, or 43.6%, while Thailand records 252 of 931 issuers, or 27.1% [8]–[10]. Together, 790 issuers 30.0% of the combined market operate in sectors where nature-related issues are likely to demand closer attention.
Yet that broad exposure is barely reflected in the TNFD register. Across the full markets, only five Malaysian issuers, five Singaporean issuers and three Thai issuers are registered TNFD adopters, giving market-wide adoption rates of 0.45%, 0.83% and 0.32%, respectively. Combined, just 13 of 2,631 issuers—0.49%—have made a registered adoption [8]–[11]. Narrowing the view to the selected nature-intensive sectors does little to change the picture: three Malaysian adopters, one Singaporean adopter and no Thai adopters fall within those same categories, producing a combined rate of 0.89%. Whether viewed across the market as a whole or among sectors most closely tied to nature, formal TNFD adoption remains rare.
The implications extend into the financial system, where nature-related exposure travels through money. Banks, insurers and investors channel capital towards businesses whose operations depend on and affect nature. A 2026 assessment by Bank Negara Malaysia, the World Bank and the United Nations Development Programme found substantial nature-related exposure within Malaysian banks’ loan books. About 54% of commercial lending goes to sectors that depend heavily on ecosystem services such as water provision, soil stability, pollination and rainfall regulation. Looking at how borrowers affect nature, 36% of loans finance sectors that place high or very high pressure on ecosystems. These categories may overlap because the same sector can both depend on nature and contribute to its degradation [12].
A separate survey of 83 financial institutions and 45 publicly listed companies found that implementation remains nascent. Nearly 80% of the financial institutions were identifying, or planned to identify, nature-related risks, while 22% of the surveyed companies had conducted a formal nature-related risk assessment [12].
This gap between initial risk identification and formal assessment matters because ecological change can move quickly through a balance sheet. A borrower that depends on reliable water, stable soils, pollination, flood regulation or biological inputs may face lower output, higher costs, impaired assets or difficulty repaying debt when those services deteriorate. Its financier can inherit the consequences through credit risk, insurance exposure, regulatory scrutiny or loss of market confidence.
Turning such broad exposure into decision-useful information for the finance team requires both a financial-materiality lens and a practical assessment route. IFRS S1 provides the lens, stating: an entity shall refer to and consider the applicability of the disclosure topics in the SASB Standards (IFRS S1.55(a)) [13]. This provides a structured starting point while leaving the materiality judgement with the company [14]. Depending on the industry, useful starting points may include water withdrawn in stressed areas, sites near protected or high-biodiversity locations, and the proportion of important inputs obtained through recognised sourcing standards [15]. These metrics narrow the field. The final judgement then depends on the company’s assets, activities, locations, value chain and financial exposure.
The TNFD’s LEAP (Locate, Evaluate, Assess, Prepare) approach provides the route [16]. A company first locates where its operations, assets and priority value-chain activities meet nature. It then evaluates what the business depends on and how its activities affect ecosystems. Those dependencies and impacts are assessed for physical, transition and systemic risks, as well as opportunities. Finally, the company prepares to respond and report by bringing material findings into strategy, risk management, capital allocation, targets and disclosure. As illustrated in the process flow diagram below:
The sequence matters because nature is stubbornly local. A cubic metre of water drawn from a wet catchment carries a different business profile from one drawn from a basin already in distress. The approval, restoration and liability exposure of a factory near a sensitive habitat may differ sharply from that of an identical facility elsewhere. Industry metrics become meaningful when they are pinned to actual assets, suppliers, catchments and ecosystems.
For each priority issue, management should therefore be able to follow the pathway from a location-specific change in nature to its consequences for the business. Consider a water-dependent plant in a stressed basin. Reduced abstraction may lead to production curtailment, lower sales and further capital expenditure. A development near a sensitive habitat may encounter approval delays, redesign costs or restricted market access. Conversely, a food producer that secures more resilient and traceable inputs may reduce supply volatility and protect revenue. Nature becomes financially legible when these effects can be connected to revenue, operating costs, asset values, liabilities, insurance, access to finance or the cost of capital.
IFRS S1 asks whether omitting, misstating or obscuring information could reasonably be expected to influence the decisions of investors, lenders and other creditors [13]. The useful question is therefore precise: could this particular nature-related risk or opportunity affect this company’s prospects? Time matters too. A risk that appears distant within an annual budget may sit uncomfortably close over the life of a mine, plantation, hotel or water-treatment plant.
Uncertainty calls for explanation. Companies should disclose their assumptions, data gaps and the range of plausible effects. A credible assessment should also change decisions. Material findings belong in enterprise risk management, procurement, site selection, capital expenditure, financing and business-continuity planning. The work belongs across the organisation, involving boards, finance teams, risk managers, sustainability specialists, buyers and operators alongside the teams responsible for disclosure.
Disclosure can then follow the four TNFD pillars: governance, strategy, risk and impact management, and metrics and targets [17]. A short list of location-aware metrics tied to decisions carries more value than a thicket of indicators with no visible route to financial performance.
Early movers may still work with incomplete nature-related data, including information on biodiversity, ecosystem condition, water, soils and ecosystem services. Their advantage lies in a defensible chain of evidence: where they interact with nature, what they depend on or affect, how those interactions create risks or opportunities, and where the financial consequences may arise.
For ASEAN companies, the sensible starting point is the handful of issues most likely to affect the business, followed by stronger evidence over time.
That is how nature moves from the margins of a sustainability report into strategy.
That is how a company gets to the root of the matter.
Comparative TNFD Adoption Across ASEAN
The analysis compares listed-issuer populations as at 31 May 2026 with the number of issuers falling within broad exchange-sector categories classified by Aubrens as automatically nature-intensive. Exact listed-issuer matches in the TNFD Adopters register are then used to estimate the prevalence of formal TNFD commitments across the full market and within the screened-sector population.
Table 1: Coverage of the Nature-Intensive Sector Screen
Table 2: Market-Wide Registered TNFD Adopter Rate
Table 3: Registered TNFD Adoption Within the Screened-Sector Population
Source basis: Market and sector data published by the Securities Commission Malaysia, Singapore Exchange and Stock Exchange of Thailand [8]–[10]; the TNFD Adopters register [11]; and ENCORE sector-level nature-dependency and impact data [18]. Calculations by Aubrens. Data cut-off: 31 May 2026.
Methodology
The analysis uses two related issuer populations for each market:
The full market population is used to calculate the market-wide TNFD registered-adopter rate. The screened population is used to estimate the share of the market falling within automatically nature-intensive sectors and the registered-adopter rate within those sectors.
Financial-sector issuers and foreign-incorporated issuers remain in the relevant market populations. Their inclusion ensures that the market-wide denominator reflects the full population reported by each exchange or market authority.
The sector screen is applied at the broad exchange-sector level rather than at individual-company level. A sector category is classified as automatically nature-intensive where its definition indicates a high concentration of activities that directly involve one or more of the following:
A category is excluded where it is predominantly service-based or sufficiently broad and mixed that nature intensity cannot reasonably be inferred for the whole category. This treatment is deliberately conservative. Individual companies within an excluded category may nevertheless have material nature dependencies or impacts.
The categories included in NN are:
Calculation
The number of listed issuers in sectors classified as automatically nature-intensive is:
NN = ∑ listings in sectors classified as automatically nature-intensive
The share of the total listed market covered by the sector screen is:
NS = (NN / NM) × 100
The market-wide TNFD registered-adopter rate is:
RM = (AM / NM) × 100
The TNFD registered-adopter rate within the screened-sector population is:
RS = (AS / NN) × 100
Interpretation and Limitations
The figures represent a broad sector-screening estimate, not an issuer-level assessment of nature-related financial materiality. ENCORE describes potential dependencies and impacts associated with economic activities but does not establish the location, scale or financial consequences of an individual company’s exposure.
ENCORE identifies potential dependencies and impacts associated with economic activities but does not establish an individual company’s location, scale of exposure or financial consequences. Broad exchange categories may include both high- and lower-impact activities, while excluded sectors may still contain companies with material nature-related issues.
Market taxonomies are not directly equivalent. Singapore has 11 unclassified listings, while Thailand’s sector frame excludes property funds, REITs and infrastructure funds even though they remain in the full market population.
The TNFD register records public commitments to begin TNFD-aligned reporting. Registration does not confirm that a complete disclosure has been published, and companies applying TNFD guidance without registering are not captured.
The results should therefore be treated as indicative measures of formal TNFD commitment, not as compliance rates, assessments of reporting quality, estimates of issuer-level materiality or national performance rankings. They also reflect the market of listing, not necessarily where nature-related dependencies and impacts occur.
References
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[2] Sunway Hotels & Resorts, “About The Banjaran Hotsprings Retreat.” [Online]. Available: https://www.sunwayhotels.com/the-banjaran/about-us. [Accessed: Jul. 28, 2026].
[3] J. Bunyan, “Perak authorities recover two bodies from landslide at Banjaran Hotsprings Retreat in Tambun,” Malay Mail, Nov. 10, 2020. [Online]. Available: https://www.malaymail.com/news/malaysia/2020/11/10/perak-authorities-recover-two-bodies-from-landslide-at-banjaran-hotsprings/1921131. [Accessed: Jul. 28, 2026].
[4] C. Teh, “The Banjaran Hotsprings Retreat closed until further notice,” Ipoh Echo, Nov. 11, 2020. [Online]. Available: https://www.ipohecho.com.my/2020/11/11/the-banjaran-hotsprings-retreat-closed-until-further-notice/. [Accessed: Jul. 28, 2026].
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