Read insights from Matt Haddon, ERM’s Global Service Lead for Biodiversity, Nature & Water, outlining three key takeaways from COP15 for business. These include understanding the Taskforce on Nature-related Financial Disclosures recommendations, aligning decarbonization with nature goals, and engaging the executive team and investors.
ERM’s biodiversity team recently returned from a very inspiring COP15 biodiversity conference in Montreal, resulting in a new ambitious global framework to halt and reverse biodiversity loss by 2030.
In broad terms, the new global framework will require governments around the world to create the right policy frameworks to ensure all organizations, including government and business in particular, do more to protect and restore nature and biodiversity. We've all come to understand that this is as critical as the climate change crisis.
Moving further, faster
This breakthrough agreement on nature will likely affect all companies. Although global efforts to tackle nature loss have often lagged behind those addressing greenhouse gas emissions, it was clear in Montreal that both policymakers and business were keen to move much faster on nature.
Governments have acknowledged that society and business have a crucial role to play, and in fact, businesses are enthusiastically pushing in the same direction. During the conference, the whole business community was very vocal in asking for clear policy direction and a business framework they can use to play their part.
The Taskforce on Nature-related Financial Disclosures, or TNFD, which asks companies to disclose their risks and opportunities related to nature much like the Taskforce on Climate-related Financial Disclosures (TCFD) does for climate, received particular attention and a lot of support from companies.
Added support for the TNFD from both governments and key figures in the climate world, such as former Governor of the Bank of England, Mark Carney, who was central to the TCFD effort, make it likely that this will be one of the biggest developments on nature that is going to most affect companies.
Investors are also expected to push harder for corporate disclosure on nature, driven by new finance, disclosure and engagement initiatives, such as the EU Taxonomy, the International Sustainability Standards Board (ISSB) announcement at COP15 that it will incorporate nature into its disclosure standards and the COP15 launch of Nature Action 100 – a new investor-led engagement program demanding action from companies to reduce nature and biodiversity loss.
There was an open willingness amongst COP15 delegates to engage in multi-stakeholder collaboration to address nature loss and restoration. This will be particularly important to meet the new biodiversity framework’s goals. The complexity of biodiversity, nature and water issues means that science and community stewardship will be key to finding effective long-term solutions that meet the needs of business, society and nature.
So, there are three key takeaways for companies to think about in the wake of Montreal. The first is to take the opportunity to understand what TNFD means in business terms. Many companies are currently undertaking TNFD pilots. ERM is working with a number of these businesses both individually and in partnership with the World Business Council for Sustainable Development (WBCSD). Companies have the opportunity now to offer feedback on their initial experiences to the TNFD Secretariat in time for its full publication in September 2023.
The second is to start to find alignment between your climate and decarbonization programs and nature, particularly regarding natural climate solutions. There are lots of credible nature-based projects available to help offset carbon emissions. One of the standout issues in Montreal was how to help redirect flows of capital into nature-based solutions. There are huge opportunities for companies to find a double win here on climate, carbon and nature.
And the third is to harness the momentum of Montreal, and the movement on nature-related corporate disclose, inside your organizations to engage your executive team and to engage your investors. 2023 is the year of getting ready to act on nature, because there's now enough alignment around the global biodiversity framework, the policy direction and the corporate disclosure tools to satisfy both companies’ needs and those of investors and wider society.
Watch out for more from ERM in the New Year on the real business implications of the global biodiversity framework and how companies can blend together business and technical perspectives to create a successful nature strategy. We look forward to some exciting work on nature in 2023.
