Purpose: This study aims to provide practical guidance for Korean companies in adopting the TNFD recommendations, particularly in the distribution and logistics industry. As natural capital becomes increasingly critical in corporate sustainability and financial risk management, the study highlights the importance of structured disclosures aligned with the TNFD recommendations.Research design, data, and methodology: This study analyzes the Locate and Evaluate phases of the TNFD's LEAP approach. It applies ENCORE, a global open-access tool, to assess natural capital dependencies and impacts across five distribution and logistics-related economic activities based on ISIC classifications. Using ENCORE's materiality scoring system, the study evaluates sectoral dependencies on ecosystem services and pressures on the environment, presenting quantitative ratings across distribution and logistics sub-sectors.Results: The findings reveal that the distribution and logistics sector exhibits significant dependencies on natural capital, particularly in water, land, and air transport. Ecosystem services such as cultural, climate regulation, and water provisioning are highly relevant to operations. Environmental pressures, including noise, GHG emissions, and the introduction of invasive species, are identified as key risks. These results underscore the necessity for companies to conduct geographically informed and activity-specific assessments of natural capital risks.Implications: The study contributes to the practical implementation of TNFD recommendations in Korea and suggests a structured roadmap for natural capital risk management in distribution-related industries. Future research should expand to the Assess and Prepare phases of the LEAP approach and incorporate case studies using corporate-level data to validate and refine the proposed framework.
Kwon et al. (Wed,) studied this question.