Why location matters as much as the scale for impact on nature: lessons from the paper industry

Companies and investors are increasingly expected to understand and disclose how their activities affect nature. Yet despite rising expectations, action has often lagged. This is because measuring impacts on nature is complex, technical and time-consuming. There is therefore a clear need for approaches that are faster and still robust enough to inform sustainability decisions. 

Most existing studies that quantify the impacts of the paper and pulp industry rely on life-cycle assessments (LCAs). While useful, these methods have had limitations due to where activities take place. As a result, they can miss significant differences between locations, even though the impacts on nature vary greatly across local ecosystems.

To address this gap, we propose a practical framework that combines speed with robustness. Instead of relying on a single method, it brings together two complementary workflows. The first uses existing studies and databases to estimate impacts linked to production processes and overall activity levels. This approach is well-suited to indicators that are less sensitive to location. The second workflow uses spatial analysis to assess impacts that depend strongly on where activities occur, such as effects on biodiversity and ecosystem integrity.

We apply this dual workflow to the paper and pulp industry in Indonesia. Using published studies and publicly available geospatial data, we assessed impacts on key biodiversity and ecosystem indicators, including key biodiversity areas (KBAs), peatlands, species richness, threatened and endemic species, and ecosystem connectivity.

Our results show that impacts linked to forest concessions were greater for biodiversity and ecosystem connectivity than those associated with processing mills. For activity-based indicators, such as greenhouse gas emissions and air pollution, impacts were mainly driven by production volume, with larger mills having greater impacts. In contrast, for outcome-based indicators, impacts depended more on location. Facilities located in more biodiverse or better-connected landscapes had greater impacts, even when production levels were lower. This highlights that location can be just as important as scale.

Together, the two workflows provide complementary insights. Activity-based indicators help identify intervention points at the operational level (e.g., GHG and non-GHG emissions, water pollution) are most effective. Spatial indicators add critical context by showing how sensitive the surrounding environment is, allowing for a more nuanced understanding of impacts.

The indicators used in this study align with environmental disclosure frameworks, such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the EU Corporate Sustainability Reporting Directive (CSRD). These frameworks emphasise the importance of location-specific impacts on biodiversity and ecosystems. They are also consistent with the Science-Based Targets for Nature, which highlight species and ecosystem integrity as core dimensions for setting nature-positive targets.

One finding deserves particular attention: the role of ecosystem connectivity. Connectivity is often affected indirectly, for example, through road construction, and is challenging to address at the level of individual projects or companies. Maintaining and improving global datasets on ecosystem connectivity, ideally through coordinated efforts led by international institutions such as the IUCN, would support better decision-making at the landscape scale.

More broadly, this work supports a shift toward integrated, value chain-wide accountability for impacts on nature. Financial institutions and investors play a key role in accelerating the shift away from environmentally harmful practices. The framework presented here can support better decisions at both territorial and investment levels. Integrating spatial impact assessments into early decision-making can help avoid investments in highly biodiverse areas or deeply degraded areas, where damage to nature is hardest to reverse, and most difficult to reconcile with nature-aligned goals.

We recommend that companies and investors carry out rapid assessments of ecosystem integrity, including connectivity, even as international standards for these metrics continue to evolve.