What is the business challenge?

Governments, businesses, and other stakeholders are increasingly recognising the urgency of preserving our planet’s natural ecosystems. As a result, there has been an unprecedented focus on nature in sustainability reporting. Major reporting frameworks, including the Carbon Disclosure Project’s recent update, now require the reporting of nature-related risks and opportunities. Organisations are preparing to report their climate-related risks and opportunities, but more action is needed.

CDP is just one of several reporting initiatives that demand increased disclosure on nature. Other initiatives, such as the Global Reporting Initiative (GRI), International Financial Reporting Standards (IFRS), and S­­­cience-based Targets Network (SBTN) SBTs for Nature, now incorporate nature and biodiversity as a central theme. As organisations grapple with this critical issue, they ask themselves: How can we take meaningful steps to reverse the loss of biodiversity? The answer lies in collective action, informed strategies, and a commitment to addressing nature and biodiversity loss.

What can businesses do?

The business case for nature is becoming increasingly evident. Leading companies now recognise the impact of their operations on the ecosystem and the economic consequences of nature and biodiversity loss. As business as usual is not an option, companies are incorporating nature into their core management and decision-making processes. Recognising and understanding the financial risks and opportunities related to nature also enables companies to adapt to changing stakeholder expectations and upcoming legislation.

Companies are increasingly recognising the importance of assessing material nature-related dependencies and impacts within their operations and value chain. Understanding how these factors affect business operations, strategy, and financial planning is an essential step in evaluating corporate risks and opportunities. The integration of corporate commitments and targets plays a pivotal role as part of a nature strategy. Businesses may need to show ambition to contribute to a nature-positive world before defining specific nature-related targets with clear time horizons and milestones. Monitoring progress against these targets is crucial for assessing compliance, performance, and progress in fulfilling their commitments. Examples of Key Performance Indicators (KPIs) include emissions inventory, land use change emissions, and the percentage of deforestation-free commodities.

Businesses should consider taking action to enhance their relationship with nature and achieve their targets. This can be accomplished through stakeholder engagement, integrating nature within their governance structure, and implementing practical mechanisms. These steps ensure the successful execution of their nature strategy across the organisation. To provide credibility to their strategies, companies should disclose and report their actions. Aligning with major reporting standards allows them to communicate their progress effectively.

What are the next steps?

When companies are in the early stages of their sustainability journey, taking the first step may seem overwhelming. A good starting point is to identify the areas where progress has already been made and where there are gaps that need to be addressed. Today, there are tools available, such as the Taskforce for Nature-Related Financial Disclosures (TNFD), the Carbon Disclosure Project questionnaire (CDP), the FLAG for Science-Based Target Initiative and the Accountability Framework (AFi). It’s also important for businesses to understand their impact and dependencies on nature, how these can affect their production and consumption value chains and the risks associated with upcoming legislation such as the EUDR. Businesses have a crucial role to play in integrating nature into decision-making processes, assessing dependencies, setting ambitious targets, and transparently reporting their actions. Without nature and biodiversity

Author: Camila Segura, Consultant, Simply Sustainable

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