Technical Appendix: Sectoral Nature Indicators Scoring Methodology (accompanying the Nature-Intelligent Legal Services Toolkit)

Context

This Technical Appendix provides the detailed scoring methodology that underpins Stage 1a (Assess Client’s Sectoral Nature Indicators) of The Nature-Intelligent Legal Services Toolkit (the Toolkit).

Who should read this: This page is intended for sustainability and biodiversity professionals with technical knowledge who need to understand and evaluate the methodology. It explains how data has been aggregated and adapted to produce the sectoral nature indicator scores, including the assumptions, weightings and limitations involved. Legal professionals and business development teams using the Toolkit do not need to understand these technical details to use the tool effectively but may find this page helpful for understanding how sectoral ratings are derived.

Understanding the scores: The sectoral scores in the Toolkit are deliberately high-level proxy indicators based on industry-level data. They are not precise assessments of individual client impacts or dependencies. This appendix sets out how data was aggregated to create sectoral scores and the limitations and approximations inherent in this approach.

How to use this document: This methodology should be read in conjunction with Stage 1 of the main Toolkit (‘Assess Client's Sectoral Nature Indicators’). The Toolkit provides the practical application; this page provides the technical foundation and acknowledges the methodological constraints.

For the complete Toolkit: This Technical Appendix is one component of the Toolkit. For guidance on all stages of the methodology, the strategic context, practical guidance and instructions for conducting client assessments and the broader business case for nature-intelligent legal services, please refer to the Toolkit.

Aims of the sectoral nature indicators

The sectoral nature indicators are designed as a high-level screening tool for legal service providers. The aim is to quickly identify which clients are potentially exposed to high nature-related risks and opportunities, allowing firms to categorise their client portfolio by estimated proxy nature impacts and dependencies.

The data for the indicators was taken from the Exploring Natural Capital Opportunities, Risks and Exposure database (ENCORE).¹

To serve the screening purpose, the underlying database information has been deliberately simplified and aggregated. ENCORE provides granular materiality ratings at a detailed sectoral level, but for practical application in busy legal practices, a more streamlined approach is necessary. The methodology described in this document explains how that aggregation was achieved.

Important limitations: The sectoral indicators do not aim to provide detailed and precise information about the impacts and dependencies of each individual client or business activity. Each company's activities will be nuanced and location-specific. ENCORE's materiality ratings indicate a typical level of materiality at global level, and this data has been further aggregated to produce approximate ratings. The actual materiality of dependencies and impacts is likely to vary significantly based on the specific context, company and location.²

These high-level proxy scores are, however, sufficient for initial portfolio screening and identifying which clients warrant deeper nature-related due diligence.

Toolkit sectoral nature indicator scores

The table below presents the sectoral nature indicator scores generated by applying the methodology described in this document. For guidance on how to apply these scores in practice, see Stage 1a of the Toolkit.

Business activity	Nature impacts materiality rating	Nature dependencies materiality rating
Accommodation and food service activities	Nature impacts materiality rating:High	Nature dependencies materiality rating:Very high
Administrative and support service activities	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Low
Arable agriculture	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Very high
Arts, sports and recreation	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Medium
Chemicals, petrochemicals and pharma manufacturing	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:High
Construction	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Medium
Domestic, household, and subsistence activities	Nature impacts materiality rating:High	Nature dependencies materiality rating:High
Education	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Medium
Electricity, gas, steam and air conditioning supply	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Low
Financial and insurance activities	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:High
Fisheries and aquaculture	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Very high
Food and beverages manufacturing	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Very high
Food processing	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Very high
Forestry	Nature impacts materiality rating:High	Nature dependencies materiality rating:Very high
Human health and social work activities	Nature impacts materiality rating:Low	Nature dependencies materiality rating:Medium
Legal and accounting activities	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:High
Livestock agriculture	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:Very high
Machinery and equipment manufacturing	Nature impacts materiality rating:High	Nature dependencies materiality rating:High
Maintenance and repair of motor vehicles	Nature impacts materiality rating:Low	Nature dependencies materiality rating:Very low
Management consultancy activities, other professional service activities	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Very low
Manufacturing minerals	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Medium
Mining and quarrying	Nature impacts materiality rating:Very high	Nature dependencies materiality rating:High
Printing and reproduction of recorded media	Nature impacts materiality rating:Low	Nature dependencies materiality rating:Very low
Professional, scientific and technical activities	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Very low
Public administration and defence; compulsory social security	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Low
Publishing, broadcasting, and content production and distribution activities	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Very low
Real estate activities	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Low
Renting and leasing activities	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Low
Rubber and plastics manufacturing	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Low
Telecommunications, computing infrastructure, and other IT services	Nature impacts materiality rating:Very low	Nature dependencies materiality rating:Very low
Textiles, apparel, leather and footwear manufacturing	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:High
Transportation and storage	Nature impacts materiality rating:High	Nature dependencies materiality rating:Low
Water supply; sewerage, waste management and remediation activities	Nature impacts materiality rating:High	Nature dependencies materiality rating:Medium
Wholesale and retail trade	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Very low
Wood product manufacturing	Nature impacts materiality rating:Medium	Nature dependencies materiality rating:Medium

Very high (>3.5) High (2.8–3.5) Medium (1.6-2.8) Low (0.5-1.6) Very low (0-0.5)

Approach

The heatmap gives a broad indication of risks and dependencies across direct operations, and upstream supply chains of the sectors. Sectors are based on the most aggregated ISIC Level 1 codes, but where Level 1 codes did not sufficiently reflect the diversity of activity, Level 3 codes were used to add some granularity (eg, in diversified manufacturing, and agricultural or aquaculture operations).³

Scores are derived from the ENCORE database and are an aggregate of direct and upstream impacts and dependencies. To reflect where impacts or dependencies may be concentrated in operations or supply chains, a weighting was applied.⁴ For diverse service related, an equal weight of direct and upstream impacts and dependencies was used. For other sectors (labelled in the below table as follows):

¹ Primary producers, extractors or distinct asset owners direct/upstream weighting was 70/30 to reflect impacts and dependencies being more immediate within operations.

² Manufacturers typically reliant on upstream inputs were given a 30/70 weighting to reflect reliance on, and exposure to supply chain risk factors.

³ Legal and financial sectors, where risks and tendencies are likely spread across diverse portfolios were scored using an aggregate of all sectors. For all other sectors, which were mainly diverse service related, an equal weight of direct and upstream impacts and dependencies was used.

Value chain impacts

Business activity	Climate change	Ecosystem change	Pollution	Resource use	Invasive species	Weighted total	Impact decile
Accommodation and food service activities	2.70	2.06	2.60	0.25	2.45	10.1	0.6
Administrative and support service activities	1.19	1.44	1.21	0.14	0.40	4.4	0
Arable agriculture ¹	3.42	2.90	3.42	0.50	3.23	13.5	0.9
Arts, sports and recreation	1.17	1.69	1.39	0.22	0.34	4.8	0.1
Chemicals, petrochemicals and pharma manufacturing ²	2.82	1.55	3.01	0.23	1.02	8.6	0.5
Construction ²	3.74	2.46	2.76	0.00	2.00	11.0	0.8
Domestic, household and subsistence activities	2.03	2.10	2.30	0.95	1.97	9.3	0.6
Education	1.76	1.08	1.68	0.00	0.43	4.9	0.1
Electricity, gas, steam and air conditioning supply ¹	2.19	1.95	1.97	0.11	0.00	6.2	0.3
Financial and insurance activities ³	2.49	1.76	2.30	0.51	1.57	8.6	0.5
Fisheries and aquaculture ¹	3.00	3.13	3.00	2.25	3.50	14.9	0.9
Food and beverages manufacturing ²	3.04	2.40	3.20	0.41	2.67	11.7	0.8
Food processing ²	3.05	2.22	3.22	0.66	2.62	11.8	0.8
Forestry ¹	1.75	1.63	2.45	1.50	2.75	10.1	0.7
Human health and social work activities	1.50	1.09	1.96	0.00	0.94	5.5	0.2
Legal and accounting activities ³	2.49	1.76	2.30	0.51	1.57	8.6	0.5
Livestock Agriculture ¹	3.55	2.51	3.52	0.61	3.07	13.3	0.9
Machinery and Equipment manufacturing ²	2.92	2.16	2.97	0.29	2.05	10.4	0.7
Maintenance and repair of motor vehicles	1.70	1.23	1.46	0.00	0.80	5.2	0.2
Management consultancy activities, other professional service activities	2.15	1.22	1.54	0.00	0.06	5.0	0.1
Manufacturing minerals ¹	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Mining and quarrying ¹	3.44	2.96	3.13	0.90	1.74	12.2	0.8
Printing and reproduction of recorded media	2.17	1.17	2.13	0.00	0.00	5.5	0.2
Professional, scientific and technical activities	1.58	1.24	1.44	0.04	0.47	4.8	0.1
Public administration and defence; compulsory social security	3.00	2.00	2.30	0.00	1.00	8.3	0.5
Publishing, broadcasting, and content production and distribution activities	1.31	1.42	1.37	0.07	0.15	4.3	0
Real estate activities ¹	2.50	1.75	2.00	0.00	1.00	7.3	0.5
Renting and leasing activities	1.50	1.40	1.34	0.00	1.42	5.7	0.3
Rubber and plastics manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Telecommunications, computing infrastructure, and other IT services	1.47	1.36	1.33	0.07	0.14	4.4	0
Textiles, apparel, leather and footwear manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Transportation and storage ¹	3.10	1.51	2.00	0.02	2.72	9.4	0.6
Water supply; sewerage, waste management and remediation activities ¹	3.60	2.10	2.98	0.00	2.24	10.9	0.7
Wholesale and retail trade	2.75	1.20	1.38	0.00	1.20	6.5	0.3
Wood product manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3

Very high (>3.5) High (2.8–3.5) Medium (1.6-1.8) Low (0.5-1.6) Very low (0-0.5)

Value chain dependencies

Direct physical input	Enables production processes	Enables production processes	Mitigates impact	Protection from disruption	Cultural benefits	Weighted total	Dependencies decile
Accommodation and food service activities	2.70	2.06	2.60	0.25	2.45	10.1	0.6
Administrative and support service activities	1.19	1.44	1.21	0.14	0.40	4.4	0
Arable agriculture ¹	3.42	2.90	3.42	0.50	3.23	13.5	0.9
Arts, sports and recreation	1.17	1.69	1.39	0.22	0.34	4.8	0.1
Chemicals, petrochemicals and pharma manufacturing ²	2.82	1.55	3.01	0.23	1.02	8.6	0.5
Construction ²	3.74	2.46	2.76	0.00	2.00	11.0	0.8
Domestic, household and subsistence activities	2.03	2.10	2.30	0.95	1.97	9.3	0.6
Education	1.76	1.08	1.68	0.00	0.43	4.9	0.1
Electricity, gas, steam and air conditioning supply ¹	2.19	1.95	1.97	0.11	0.00	6.2	0.3
Financial and insurance activities ³	2.49	1.76	2.30	0.51	1.57	8.6	0.5
Fisheries and aquaculture ¹	3.00	3.13	3.00	2.25	3.50	14.9	0.9
Food and beverages manufacturing ²	3.04	2.40	3.20	0.41	2.67	11.7	0.8
Food processing ²	3.05	2.22	3.22	0.66	2.62	11.8	0.8
Forestry ¹	1.75	1.63	2.45	1.50	2.75	10.1	0.7
Human health and social work activities	1.50	1.09	1.96	0.00	0.94	5.5	0.2
Legal and accounting activities ³	2.49	1.76	2.30	0.51	1.57	8.6	0.5
Livestock Agriculture ¹	3.55	2.51	3.52	0.61	3.07	13.3	0.9
Machinery and Equipment manufacturing ²	2.92	2.16	2.97	0.29	2.05	10.4	0.7
Maintenance and repair of motor vehicles	1.70	1.23	1.46	0.00	0.80	5.2	0.2
Management consultancy activities, other professional service activities	2.15	1.22	1.54	0.00	0.06	5.0	0.1
Manufacturing minerals ¹	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Mining and quarrying ¹	3.44	2.96	3.13	0.90	1.74	12.2	0.8
Printing and reproduction of recorded media	2.17	1.17	2.13	0.00	0.00	5.5	0.2
Professional, scientific and technical activities	1.58	1.24	1.44	0.04	0.47	4.8	0.1
Public administration and defence; compulsory social security	3.00	2.00	2.30	0.00	1.00	8.3	0.5
Publishing, broadcasting, and content production and distribution activities	1.31	1.42	1.37	0.07	0.15	4.3	0
Real estate activities ¹	2.50	1.75	2.00	0.00	1.00	7.3	0.5
Renting and leasing activities	1.50	1.40	1.34	0.00	1.42	5.7	0.3
Rubber and plastics manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Telecommunications, computing infrastructure, and other IT services	1.47	1.36	1.33	0.07	0.14	4.4	0
Textiles, apparel, leather and footwear manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3
Transportation and storage ¹	3.10	1.51	2.00	0.02	2.72	9.4	0.6
Water supply; sewerage, waste management and remediation activities ¹	3.60	2.10	2.98	0.00	2.24	10.9	0.7
Wholesale and retail trade	2.75	1.20	1.38	0.00	1.20	6.5	0.3
Wood product manufacturing ²	3.04	1.28	2.70	0.00	0.00	7.0	0.3

Very high (>3.5) High (2.8–3.5) Medium (1.6-1.8) Low (0.5-1.6) Very low (0-0.5)

Acknowledgements

Disclaimer: The information contained in this publication is provided for general informational purposes only and does not constitute legal advice. While every effort has been made to ensure the accuracy and completeness of the information, no guarantee is given. The IBA and the author will not be liable for any reliance that you place on the information herein.

Sectoral scoring methodology developed by: Thomas Mason and Julian Mashingaidze of Nature Positive. For full acknowledgements, please refer to the Toolkit.

Sectoral data derived from: ENCORE database © ENCORE Partners (Global Canopy, UNEP FI, and UNEP-WCMC) (2024). ENCORE: Exploring Natural Capital Opportunities, Risks and Exposure.

¹ Maintained by the ENCORE Partnership (Global Canopy, UNEP FI, and UNEP-WCMC)). (ENCORE, About Encore).

² ENCORE, Data and Methodology – Limitations; ENCORE, Data and Methodology – Methodology.

³ The 35 business activities in the scores table cover 20 of the 21 International Standard Industrial Classification (ISIC) sections, with high-impact sectors (agriculture, manufacturing) subdivided for greater precision. United Nations Department of Economic and Social Affairs, Statistics Division, International Standard Industrial Classification of All Economic Activities, Rev 4 (2008). (See ENCORE, Data and Methodology – Economic Activities.)

⁴ The weightings applied were based on professional judgment and a range of publicly available data and assessments on value chain effects, reflecting where impacts and dependencies are typically most concentrated for different types of business activities.

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