Applicability of supply shed approach in global supply chains: integrating supply shed and landscape approaches for natural capital assessment

Abstract Private companies are increasingly expected to evaluate and disclose their environmental impacts across entire value chains, yet supplier-level traceability remains highly burdensome. Core barriers include supplier volatility, commodity mixing, and nondisclosure by upstream actors. These challenges limit the feasibility of site-specific monitoring and hinder compliance with emerging frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD), the European Union Deforestation Regulation (EUDR), and the Kunming–Montreal Global Biodiversity Framework adopted under the Convention on Biological Diversity (CBD). In response, the “supply-shed” approach has emerged as a pragmatic alternative. By grouping suppliers within defined markets or regions, it enables collective impact assessment and management without requiring precise supplier identification. This method, already applied in corporate Scope 3 greenhouse gas accounting, reduces costs while maintaining meaningful links to environmental outcomes. Integrating the supply-shed concept with landscape approaches provides a hybrid framework that balances practicality and ecological relevance. The supply-shed brings organizational clarity and accountability within supply chains, while the landscape approach anchors assessments in spatial and ecosystem-specific boundaries. Together, they allow companies to conduct initial risk screening at regional scales using secondary data, remote sensing, or environmental DNA (eDNA), followed by targeted supplier-level studies when higher resolution is necessary. This model offers efficiency in addressing traceability barriers and supports more systematic monitoring of biodiversity, water, and land-use impacts. Looking ahead, critical issues remain in defining responsibility across overlapping supply-sheds, ensuring coordination within broader landscapes, and aligning with regulatory regimes that may burden smallholders. Nonetheless, embedding supply-shed–landscape hybrids into evolving policy frameworks presents a cost-effective and inclusive pathway for corporate natural capital assessment. Such integration can lower financial and technical barriers, expand corporate participation, and foster more credible contributions to global biodiversity conservation.