The unknown exposure

This is article 1 in the On Biological Time series.

A map arrives on 30 December

On 30 December, less than three months from now, the European Union's deforestation regulation finally applies. After two postponements, every large and medium operator placing palm, cocoa, coffee, rubber, soy, cattle or wood on the EU market must hold geolocation coordinates to at least six decimal places for every plot of land behind every product, and the Commission has confirmed the date and said it will not reopen the core text.

The regulation is doing what it was designed to do. It forces supply chains that have been abstract for decades to become physical again, plot by plot, and it is right to do so. Thousands of compliance teams are now assembling those coordinates at considerable expense, often from smallholders who have never been asked for them before.

The coordinates are being gathered to answer one question, which is whether a hectare was cleared after the 2020 cut-off. This essay is about the questions nobody is asking of the same data.

The number that frames the map

Earlier this year the Swiss Re Institute published a figure that belongs beside every one of those coordinates. In 2025, Asia suffered around $65 billion of economic losses from natural catastrophes, and roughly $5 billion of that was insured. Ninety-two per cent of the loss burden landed on households and businesses with no cover at all.

Asia carried roughly thirty per cent of the world's economic catastrophe losses last year and around five per cent of its insured losses. The region's insured total was the lowest since 2017, not because less was destroyed but because the year's heaviest events landed in emerging markets where insurance barely reaches.

That is usually described as a protection gap. A gap, though, implies two edges of the same thing, and what the numbers describe is closer to a different financial universe, one operating underneath the same shelf price that a shopper in London or Hamburg pays.

The industry is very good at events

Every figure above describes an event: a flood, a typhoon, an earthquake, something that arrives, is counted, and is either paid or not paid. The insurance industry is very good at events, with three centuries of practice behind it, and the repricing now under way across wildfire, flood and storm is that machinery working exactly as designed.

Globally, insured catastrophe losses reached $107 billion in 2025, and close to half of all economic losses were insured, the highest share Swiss Re has ever recorded. In August the Institute reported a quieter first half of 2026, with $42 billion of insured losses, and warned that a benign half-year does not mean that risk has gone anywhere. Where the industry can see, it is getting steadily better at paying.

Pricing begins with somebody looking

Before any risk can be written, someone has to know what is being covered. For land, that knowledge is not abstract: it rests on a survey, a soil record, a history of what the ground has done, and all of it depends on a person having stood there and recorded what they saw.

Across most of rural Asia that visit never happened, for the simple reason that no premium on a smallholding of a hectare or two could ever pay for it. The land went unrecorded because recording it was uneconomic, and over the decades a very large share of the developed world's supply chains came to rest on ground that, in any formal sense, has never been described.

What grows on the unobserved ground

Walk the aisles of any supermarket in Europe and a remarkable share of what you pass began on that ground: the oil in the biscuits, the cocoa in the chocolate, the coconut in the dairy alternatives, the rubber in the gloves at the checkout. Until this year, almost none of it had to be traced to a specific plot, and none of it has ever been traced to the condition of that plot.

Consider palm, because palm is where the arithmetic is public. Around 2.4 million hectares of Indonesian smallholder palm are past their productive age and need replanting. The government set out in 2017 to replant 180,000 hectares of smallholder palm every year, and the total replanted since then has yet to reach 450,000 hectares. The shortfall did not arrive suddenly. It accumulated on the clock, exactly as the trees were planted.

The people who manage that ground are ageing on the same clock. Indonesia's 2023 agricultural census found that the share of farmers over 55 is rising while the share under 44 is falling, and that the number of individual farm holdings fell by more than two million in a decade.

And since 1 July, Indonesia's B50 mandate has required that half of every litre of diesel sold in the country come from palm, drawing between 16 and 17 million tonnes of crude palm oil a year into domestic fuel, more than a third of national output, before a single cargo reaches an export market.

What I saw from the other side of the ledger

I spent the first part of my working life in investment banking, where an asset existed when it appeared in a model. I have spent the fifteen years since living inside smallholder communities in Indonesia and the Philippines, where the assets are trees and the people who tend them, and where almost none of what decides a harvest appears in any model at all.

Nothing happened

None of the palm facts above is a catastrophe. No one will ever file a claim on any of them, and they will never appear in a sigma report, because nothing happened.

That is precisely the point. The ground stops producing on a schedule that owes nothing to the weather. An ageing estate does not flood or burn; it yields a little less each season until, one season, it is no longer worth harvesting, and the decline never crosses the threshold that turns it into a number anyone records.

An event is insurable because it is observable. A condition is not insured because it is not observed, and it is not observed because no instrument in the disclosure stack was built to detect it.

The panel that comes back clean

TNFD asks what you depend on, ESG frameworks ask what you disclose and carbon accounting asks what you emit. Each of those instruments returns a clean result on ground that is running out of time, and each of them is functioning correctly when it does.

A blood test that comes back normal is not lying to you. It reports faithfully on the markers it was designed to measure, and the patient who still feels unwell is not imagining it. The question is what was never on the panel.

A coordinate is not a condition

On 30 December, the coordinates arrive in every compliance system that needs them. They will establish, at six decimal places, where a commodity came from and whether the forest was standing there in 2020. That is a genuine achievement and it will change sourcing for good.

A coordinate, however, is a location. It says nothing about how old the trees on that plot are, how many seasons of productive life they have left, or whether the person who harvests them has anyone to hand the work to. Two plots a hundred metres apart can share every decimal place that matters to the regulation and sit at opposite ends of their working lives.

Where the growth story meets the ground

Capital in the developed world is pouring into data centres, chips and power on a scale without precedent, and the economies building that infrastructure still eat, cook and clean with what grows in the tropics. The growth story and the supply story are usually told separately. They meet on a smallholding in Sulawesi or Mindanao, where the insurance that would catch a failure covers less than a tenth of what is lost and the slow decline of the ground itself is covered by nothing at all.

A condition of this kind tends to announce itself late, as a supplier who quietly delivers less, a contract that cannot be filled at the agreed volume, or a price that will not come back down. By then it has moved from the sourcing team to the boardroom, and the most honest account anyone can give is that every instrument the company relied upon reported, correctly, that nothing was wrong.

The question on your book

The question is no longer whether your supply chain carries climate exposure. You have answered that one, there is a page on it in the annual report, and the page is accurate.

The questions are different now. Which of the hectares behind your products are young enough to still be producing in ten years? If you write property or agricultural risk in the region, what does your model assume about the age of what is standing on the ground? Who in your organisation would know the answer, and who would think to ask? When the coordinates land in your systems on 30 December, will anyone ask them anything other than whether a tree was cut down?

You will hold a coordinate for every hectare you depend on before the year ends, and the only part still open to you is whether you learn what is standing on that ground now or at a border.

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