From Forest to Farm: Why Nature Restoration is Essential to Supply Chain Resilience

In 2020, the World Economic Forum estimated that more than half of global GDP (US$44 trillion) depends to some extent on nature and the ecosystem services it provides. This simple calculation reveals an important truth: nature loss is business loss; and the protection of natural ecosystems is demonstrably good for business.

Since that report was released, the value of—and the need for—protection has only increased. In sourcing landscapes around the world, climate shocks are becoming more frequent, regulatory requirements are tightening and the pressure on natural resources continues to intensify. To manage these risks, companies who source commodities like palm oil are investing heavily in satellite monitoring, smallholder engagement, grievance systems and traceability to mill. And yet, many of the underlying drivers of disruption or regulatory non-compliance remain largely outside the traditional boundaries of supply chain management.

At the Rimba Collective, we recognise that a fundamental shift in perspective is required. The long-term stability of agricultural supply depends, not just on the producers of palm oil and other essential commodities, but on the landscapes that make this production possible. And this means resilience must be built upstream, where disruption begins. But how and where does risk occur? How does investment in natural capital translate to improved supply chain resilience, and why is collective action essential to success?

In this article, we outline four lessons learned by the Rimba Collective over time, which can address each of these important questions in turn.

1. Supply chain risks often originate outside the supply chain

Many of the risks facing agricultural commodities today are not operational in nature. They are ecological. Flooding, fire, biodiversity loss and land degradation are shockwaves in nature that can ripple across landscapes and reverberate through supply chains, manifesting as procurement volatility, rising costs and disrupted operations; ultimately, this compromises the availability of commodities like palm oil.

The evidence is impossible to ignore. In places where forests are degraded, watershed function deteriorates. Where watershed function deteriorates, agricultural systems become increasingly vulnerable to droughts and floods. Where ecosystems are destabilised and nature fails to function, disruption to production is sure to follow.

By focusing on forests and watersheds on the periphery of palm oil sourcing areas, the Rimba Collective is working with local communities to halt and reverse deforestation and degradation at landscape scale, thereby helping to maintain the ecosystem functions upon which long-term productivity depends. This approach enables us to reduce exposure to risks that individual suppliers or companies cannot effectively address alone or within their own sphere of operational influence.

2. Watersheds may be the most overlooked infrastructure in agricultural supply chains

Healthy watersheds are the first line of defence against climate-related disruption. They regulate water flows, stabilise soils, reduce erosion and moderate local climate conditions. They perform functions that are fundamental to agricultural production but rarely appear on balance sheets; for this reason, watershed protection is at the forefront of the Rimba Collective model.

The key to watershed function is forest protection. This is evidenced by the floods that swept through North Sumatra and Aceh in late 2025; a poignant reminder of what can happen when nature’s life support systems are weakened by unsustainable landscape management. In places where forests were degraded, the impacts of these floods were noticeably more severe; conversely, where forests were protected, commodity sourcing areas downstream proved more resilient under the same conditions.

For businesses, the implication is clear. Funding the protection and reforestation of watersheds is an investment in the natural capital that mitigates disruption to supply. Faced with an increasingly volatile climate, standing forests should be recognised and valued as the guardians of agricultural production.

In locations like East Kalimantan (above), Rimba Collective projects are strategically located upstream from critical watershed areas and mills, providing an effective buffer against nature degradation and disruption to supply chains (graphic: Lestari Capital)

3. The value of protection is far greater than the cost of inaction

Another instructive example is Indonesia's 2015 peat and forest fires, which burned an area of approximately 2.6 million hectares and caused an estimated US$16.1 billion in economic losses, according to the World Bank. The impacts extended far beyond forests, affecting public health, transportation, agricultural production and economic activity throughout Indonesia and beyond. With the El Niño–Southern Oscillation (ENSO) on the horizon in 2026, the risks posed to agricultural production—and the need for large-scale mitigation efforts—are significantly increased; by learning lessons from history, we can avoid similar disruption to future supply.

From fire to flood, the key lesson to be learned from these climate-related disasters is that landscape risk behaves much like any other business risk—it becomes more expensive when ignored. Every year, deforestation and land degradation costs the world US$6.3 trillion in lost ecosystem services, raising the pressure on water systems and causing production risks to accumulate. Costs that might have been addressed through planned intervention eventually resurface as emergency sourcing, remediation, compliance costs or operational disruption; in some extreme cases, inaction can be construed as culpability, which can lead to loss of license to operate in sourcing landscapes. Now let’s look at the other side of the coin. For every dollar invested in restoring and protecting these landscapes, nature provides an estimated $7–$30 in economic benefits, covering everything from improved food production to carbon sequestration and water quality.

The cost of action is planned, predictable and shared across multiple stakeholders operating within the same sourcing landscapes. It allows companies to address risk drivers before they become crises. Conversely, the cost of inaction is uncertain, fragmented and cumulative. It results in disrupted supply continuity, escalating compliance burdens, increasing procurement volatility and growing exposure to regulatory and reputational risk. The Rimba Collective provides a proven mechanism for investing in the kind of pre-emptive, proactive mitigation measures that can reduce risk, build resilience and secure long-term supply.

4. Resilience requires collective action, not isolated interventions

Forest recovery, watershed restoration, community stewardship, behavioural change and institutional strengthening—the building blocks of resilience—all require time. Durable outcomes demand durable finance. This is why long-term, large-scale commitment is a defining feature of the Rimba Collective model. By pooling investment and supporting long-term, landscape-scale interventions, the Rimba Collective enables companies to address shared risks collectively rather than individually.

Nature-related dependencies that once sat outside conventional financial analyses are increasingly influencing operational continuity, input costs, compliance requirements, access to finance and long-term enterprise value. At the same time, disclosure frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), emerging Science-Based Targets for Nature (SBTN) expectations and regulations such as the European Union Deforestation Regulation (EUDR) are increasing scrutiny of sourcing landscapes and nature-related impacts.

The Rimba Collective cannot eliminate risks entirely or guarantee compliance, nor can it replace company-level due diligence obligations. What it can do is provide a credible, evidence-led mechanism for addressing the underlying drivers of risk within sourcing landscapes, enabling companies to achieve more by working together than they could by working alone.

(Above) Through community-led conservation in critical watershed areas, the Rimba Collective is working to reduce risk, mitigate disruption to supply chains and build greater resilience into sourcing landscapes (photo: Ivan Batara / Rimba Collective)

The business case for investment in natural capital

Production landscapes do not exist in isolation. They are not immune to the forces shaping the climate and our planet’s capacity to provide. Just like forests, plantations rely on pollinators, healthy soils, strong root systems, and reliable water sources to function. They are just as vulnerable to fire and flood as their natural neighbours—and depend on them to help deflect these risks. In a volatile climate, and when navigating short-term weather fluctuations such as El Niño, investment in the protection of natural capital is essential to reducing risk and mitigating supply chain disruption.

The same World Economic Forum report that quantified the cost of nature loss in 2020 also issues a rallying call for restoration that remains deeply relevant today: “humanity urgently needs to rethink its relationship with nature, in order to halt and reverse the alarming degradation of the natural world. Business leaders have a crucial role to play by putting nature at the core of their processes and decision-making, and by systematically identifying, assessing, mitigating, and disclosing nature-related risks to avoid severe consequences.”

From Sumatra to Kalimantan, the consequences of inaction versus the value of protection are clear. While there is no easy road out of the climate crisis, and no silver bullet for supply chain resilience, even the World Economic Forum believes that “we have the power to change this.” And that power surely lies in collective action.

From Sumatra to Kalimantan, the consequences of inaction—and the value of protection—are clear. While there is no easy path out of the climate crisis, and no single solution for supply chain resilience, the World Economic Forum affirms that “we have the power to change this.” That power ultimately lies in collective action.