AMPLIFY EXECUTIVE UPDATE VOL. 37, NO. 2
  

The Evolving Landscape

After decades of lagging, the emergence of nature as a pressing global concern has been swift. In large part, this was driven by the establishment of IPBES, a body inspired by and parallel to the Intergovernmental Panel on Climate Change (IPCC). This imitative approach was soon replicated by other climate initiatives, with the Task Force on Nature-related Financial Disclosures (TNFD) following in the footsteps of the Task Force on Climate Related Finance Disclosures (TCFD) and the Science Based Targets for Nature (SBTN) in emulating the climate-focused Science Based Targets Initiative (SBTi). In the US, the recently launched Nature Action 100 is hoping to echo the success of Climate Action 100+, which tracks corporate progress against a benchmark established by the investor community.

These approaches were helped by a pivot in the advocacy community to better frame the biodiversity crisis for national and multinational policy makers by using a less precise but more expansive term (“nature”) and adopting “nature positive” as an appealing and easily understood goal. (For more context on the importance of language in bending the curve on biodiversity loss, see last year’s Amplify article on connecting business strategy to biodiversity preservation.) Language changes, new frameworks, regulations, and initiatives have resulted in a significant increase in the private sector’s engagement with nature.

The emergence of nature as a pressing global issue became especially clear at the December 2022 United Nations Biodiversity Conference (COP15) with the adoption of the Kunming–Montreal Global Biodiversity Framework (GBF). The mission of GBF is “to take urgent action to halt and reverse biodiversity loss to put nature on a path to recovery for the benefit of people and planet by conserving and sustainably using biodiversity….”

Negotiations for the framework were contentious around a number of issues, but for the first time in the convention’s history, a specific requirement for business that seeks both disclosure and action on biodiversity was included.

This requirement (Target 15) asks governments to require businesses, especially large transnational companies, and financial institutions to monitor, assess, and report their operations and supply chain impacts on biodiversity for their entire portfolios. In addition, whole-of-government and whole-of-society approaches that include the private sector are being promoted as countries develop national biodiversity strategies and action plans as required by GBF.

In addition to the adoption of GBF; continuing assessment by IPBES; and the emergence of supporting initiatives like TNFD, SBTN, and Nature 100, national and multinational bodies are advancing regulations and legislation for biodiversity and nature as it pertains to business. Most notably, the EU adopted the Nature Restoration Law and included biodiversity in the EU Corporate Sustainability Reporting Directive (CSRD) and taxonomy. India and Brazil already require companies to disclose their nature-related risks and dependencies.

The speed of these developments, along with the complexity of the issue, is causing uncertainty and confusion in corporate sustainability offices worldwide. A growing awareness of (and pushback against) greenwashing in corporate reporting, voluntary markets, and mechanisms like offsets and credits is adding pressure to the situation. The emergence of new nongovernmental organizations (NGOs), verification schemes, technology platforms, and markets to support (or profit from) this new landscape is introducing more confusion, too.

Biodiversity credits is an emerging issue of concern and research as advocates for and against debate the merits of payments for successful outcomes for nature and work to develop a system centered on integrity. According to a 2023 report by the World Economic Forum, GBF seeks to mobilize US $200 billion in funding for nature and acknowledges that innovative mechanisms like biodiversity credits are needed. There is a general agreement that, given the hyperlocal nature of biodiversity, such credits cannot be used as offsets, but much discussion remains as to how such payments should be calculated and traded.

Another development is growth in “nature tech,” which refers to a set of technologies that seek to support the goal of a nature positive world through monitoring, data collection, modeling, and ecological restoration. In 2023, Nature4Climate released a trends report on venture capital investments in nature tech that showed “early-stage deals rose by 130% between 2020 and 2022 and average deal sizes for seed to series B funding increased by 70%, demonstrating the growing maturity of the nature tech industry.”

Given the speed and complexity of the evolution underway, it is no surprise that sustainability professionals are seeking ways to navigate the chaos and better understand the starting points for embarking on a nature positive journey. This Update provides companies with the actionable steps they need.

The Nature Positive Journey

Although many advances in elevating nature as a significant risk and opportunity for business have been modeled after successful climate initiatives, a divergence happens when it comes to goal setting and implementation.

The corporate climate target of net zero is based on a single metric: units of carbon. Nature is different. There is no single metric. Impacts are hyperlocal and driven by multiple factors. Ecosystems are complex. Accountability for positive and negative influences can be debated. Pressures differ not just across operations, but also geographical locations. A quarry in Indonesia, for instance, will have a significantly different nature impact than the same operation in the UK.

The complexity of nature suggests that companies should eschew any destination-focused aspiration (e.g., “being nature positive”) and instead commit to starting and progressing on a journey. This approach lets companies choose a starting point that allows them to prioritize according to impact and act according to context.

There are multiple starting points for any company seeking to embark on a nature positive journey. TNFD, the framework to support corporate disclosures, recognizes that organizations are different and allows for multiple entryways while expecting increasing ambition over time. The best place to start is with an awareness-raising phase.

Raising Awareness

One of the most cited practical obstacles to engaging in nature-related initiatives within environmental or sustainability offices is a lack of leadership buy-in and support. CEOs and boards seem resistant to yet another ESG (environmental, social, and governance) concern, especially as climate continues to dominate noncore business discussions. Many see corporate buy-in as essential to starting a nature positive journey; but, in fact, preparatory work like mapping impacts and dependencies, gathering data, and understanding supply chains can take place without it. In some cases, buy-in will only take place once success has been illustrated on the ground.

If C-suite support is important, buy-in below the C-suite is essential. Operational impacts and geographic locations contribute to biodiversity loss in a land-based company in the extractive sectors while supply chain activities are material to manufacturing and other sectors. Creating awareness and fostering engagement from operations, procurement, facilities management, and real estate will drive the journey forward. Importantly, messaging should be carefully tailored to each target audience in this phase.

Exploring

With awareness raised, the next step is to interrogate the company’s relationship to nature, seeking to understand its nature-based risks dependencies and opportunities. There are many tools and partners available to help. The International Union for Conservation of Nature (IUCN) Global Species Action Plan is a good starting point, as it lists eight GBF targets relevant to business. IPBES is currently undertaking a Methodological Assessment of the Impact and Dependencies of Business on Biodiversity and Nature’s Contributions to People, which will add to our collective knowledge. Companies must adopt boundaries for their explorations, and SBTN provides a sector-level materiality assessment tool that helps companies identify locations for further exploration and ultimately target setting.

Assessing & Planning

With a materiality analysis in hand, companies can focus on specific locations to assess for impacts and dependencies on nature. An academic or NGO partner may be necessary at this stage to bring scientific and local knowledge into the assessment. Many NGOs (e.g., BirdLife International, Flora & Fauna International, IUCN, and Wildlife Habitat Council [WHC]) have dedicated business and biodiversity programs that can build bespoke approaches for a company-wide assessment, and local environmental groups can be strong partners for site-based efforts.

In most companies, community relations staff should know who the nature positive stakeholders are. Each location should be assessed using a nature-impact methodology that examines the impacts of the industrial or commercial processes, the footprint, the supporting infrastructure against the geographical location, and the nature on or adjacent to the site. Each assessment should deliver a priority list of impacts and a suite of recommended interventions. These assessments can be a starting point for target setting and disclosures.

Piloting & Adapting

Nature-impact assessments should also be the starting point for action focused on abating, avoiding, or minimizing negative impacts and for resourcing potential positive impacts. Many large multinational companies seek to focus on a priority area of business or supply chain and pilot approaches that deliver against the targets in meaningful and sustainable ways. Best practices in addressing negative impacts should be integrated into business operations as permanent abatement and avoidance activities, and best outcomes from positive impact efforts should be sustainably resourced for long-term gain. Both efforts should be done on a performance-improvement loop that recognizes the day-to-day reality of operations and takes unpredictable external forces like extreme weather events or corporate disruptions into account.

Nature tech, which has raised $7.5 billion in venture capital in the last five years, can support these efforts. For example, new technologies can support the data collection and monitoring needed for implementation and adaptation. One of the most interesting nature tech developments is in the use of environmental DNA, in which samples are taken from the environment (rather than an individual) and can deliver results more efficiently and cost-effectively than traditional monitoring, which focuses on seeking individual species to form the environmental assessment. NatureMetrics is one group providing companies with an opportunity to create detailed biodiversity profiles across their entire footprint.

Adopting & Launching

Business for Nature, a global coalition of NGOs and businesses seeking to scale and speed up business action, is encouraging companies to adopt strategies for nature building on its ACT-D framework (assess, commit, transform, and disclose). The coalition’s “It’s Now for Nature” campaign seeks to bring companies together to “act on nature and contribute toward a nature positive world by 2030.”

The campaign asks companies to adopt nature strategies that contain a materiality assessment, have SMART (specific, measurable, achievable, relevant, and time-bound) goals, and have approval from the C-suite or board. These strategies will count toward a collective business impact and contribution to GBF. Whether to align with Now for Nature, respond to shareholder questions, address rating-agency inquiries, adhere to new or forthcoming regulations, or simply support a nature sustainably pillar, adopting and launching a nature strategy makes a lot of sense.

Becoming a Leader

According to CDP, only 50% of companies that consider biodiversity a materiality have set related commitments. Regulation has arrived for many companies and sectors, and more is coming. There remains room in most sectors for leaders to emerge and for companies to start a nature positive journey.

Biodiversity benchmarking can help a company see where it sits against its peers and where there is room for improvement. WHC’s methodology for biodiversity benchmarking gathers data from a range of reports and ranking entities and examines commitments, actions, and disclosures to deliver a score relative to a competitor set. This type of benchmarking explores the public commitments and statements a company has made and can quickly highlight gaps in reporting, action, and data collection, as well as placement relative to a peer group. Benchmarking shows who is leading today and where opportunities to excel lie.

Climate, Nature & Social Impact Intersections

As the marketplace of nature-related frameworks and initiatives grows and becomes more complex, calls for better intersections between various efforts become louder. CSOs, CFOs, and others seek more efficient data flows and reporting mechanisms, as well as a reduction in the duplication of effort and an increase in realizing co-benefits. 

Intersections are increasingly happening within the realms of climate, nature, and social impact as leaders realize we can’t fix the climate crisis without addressing the nature crisis — and we can’t solve either without involving the communities most impacted by both. Calls for bringing the twin crises together grow every year.

The nature and social impact intersection is especially clear with Indigenous communities, which are stewards of 80% of the biodiversity left in the world. Although Indigenous people constitute just 6% of the global population, they make up 12% of the extreme poor. Many Indigenous communities are in areas where exploitation of nature is driving extinctions not just of species but of traditional and Indigenous ways of life. The intersections here are clear: Indigenous people must be supported in their stewardship activities in ways that bring communities out of poverty and provide pathways to prosperity.

The nature, climate, and social impact intersection is clear in communities proximate to heavy industry, which suffer poor air quality, increased risks of flooding, and heat island effects. Nature-based solutions that address these issues can be part of a company’s nature positive journey and contribute to social impact goals and risk-reduction efforts.

Conclusion

Concerns about the unchecked loss of nature across the globe continue to grow, and efforts to address them are rapidly maturing. The old excuses for inaction (the absence of a business case, lack of frameworks/metrics, and regulatory pressure) no longer stand. The business case for nature has been clearly made by IPBES and others. Companies have been given valuable and useful tools to assess, commit, transform, and disclose their impacts and dependencies. The knowledge needed for nature recovery and restoration is rich, especially in Indigenous communities, and nature tech and financial instruments are emerging to support the effort. The goal is to be nature positive by 2030. Six years will pass quickly, so the time to act is now.