Tag Archive for: corporate reporting

We are anticipating increased focus in 2024 on biodiversity disclosure within corporate reporting.  This is in line with increased global action, legal reforms, shifts in mindset towards biodiversity conservation and nature-positive outcomes that we’re seeing at the moment.

Figure 1: Summary of global developments in the landscape of corporate biodiversity disclosures

The corporate reporting and regulatory landscape are undergoing significant changes, ushering in a new era of nature-related corporate disclosures. The Global Reporting Initiative (GRI) has introduced GRI 101: Biodiversity 2024, an updated reporting standard aimed at enhancing transparency on organisations’ biodiversity impacts. This update closely follows the release of the Taskforce on Nature-related Financial Disclosures (TNFD) late last year, which is a disclosure framework with over 320 organisations, including banks, asset managers and owners, financial institutions, publicly listed companies, and market intermediaries, committing to early adoption by fiscal year 2025.

The European Union (EU) is at the forefront of mandatory biodiversity reporting, with the establishment of the European Sustainability Reporting Standards (ESRS) E4 standards by the European Financial Reporting Advisory Group (EFRAG), that requires EU companies to report on biodiversity risks, opportunities, targets, and action plans.

Other upcoming developments to expect, include the emerging International Financial Reporting Standards (IFRS) developed by the International Sustainability Standards Board (ISSB). The ISSB has announced that there will be enhancements to their disclosure standards to include topics on biodiversity, like natural ecosystems, deforestation, and just transition.

Growing awareness within the investor and financial sectors highlights the significant reputational and legal risks associated with biodiversity loss in investment portfolios. This has led to a shift towards financial instruments prioritising biodiversity to achieve nature-positive outcomes and mitigate financial risks. The financial sector is anticipated to continue driving reporting and regulatory requirements for biodiversity disclosures to meet the increasing demand for transparency, credibility, and the prevention of greenwashing risks.

The intricate interconnectedness of nature and biodiversity can present a daunting challenge for companies to integrate these considerations into their business strategies. Recognising this initial trepidation, a shift is gaining momentum within the corporate landscape, evidenced by the proliferation of frameworks and guidance specifically designed to support a transition towards nature-positive outcomes. Furthermore, leading organisations like Business for Nature Coalition, World Business Council for Sustainable Development (WBCSD) and World Wildlife Fund (WWF) are spearheading the development of practical tools tailored to specific industries, and equipping businesses with the tools and knowledge needed to implement effective nature-positive strategies.

Adding further impetus to this positive trajectory is the burgeoning field of science-based Targets for Nature (SBTN). Leveraging SBTN will empower companies to establish quantifiable, achievable, and time-bound nature-related targets, grounded in science, that aligns with planetary boundaries and societal sustainability aspirations. In May 2023, 17 pioneering companies have piloted the first-ever science-based targets for nature, marking a significant advancement in understanding and implementing such targets, ahead of opening the target validation process later this year. As the pilot program will conclude in May 2024, the forthcoming report will offer valuable guidance and insights gleaned from participant companies’ successes and challenges in setting science-based targets.

Despite progress made, there remains a significant gap between rhetoric and reality. It is paramount to recognize that integrating biodiversity considerations within business strategies is not solely a matter of environmental responsibility; it holds tangible benefits. By embracing nature-positive practices, entities can unlock novel opportunities for growth and contribute meaningfully to the construction of a more sustainable future for all. We must seize the momentum generated by UN Biodiversity Conference (COP 15) and UN Climate Change Conference (COP 28), translating ambitious targets into concrete actions on the ground. Ultimately, collective action from governments, businesses, and individuals is essential to protect our planet’s biodiversity and ensure a prosperous future for all.

For 20 years, Paia has empowered local organisations to embark on their sustainability journeys. Leveraging our expertise in the sustainability space, we drive measurable improvements across organisations, helping achieve sustainability progress across E, S and G. With TCFD strategy and implementation being one of Paia’s key service lines, and our in-house environmental expertise, we are well-placed to support our clients with getting started on managing nature-related risks and opportunities. To delve deeper into TNFD disclosure reporting, we invite you to explore our insightful article, “TNFD, Explained”.

Get in touch with Paia for more information and insights on how we can support your organisation. If you would like to learn more about how to kickstart your nature strategy, you can reach out to us via info@paiaconsulting.com.

References

[1] European Sustainability Reporting Standards (ESRS) E4 standards

[2]  GRI 101: Biodiversity 2024

[3] International Sustainability Standards Board (ISSB)

[4] Paia Insights: “TNFD, Explained”.

[5]  Science-based Targets for Nature (SBTN)

[6] Taskforce on Nature-related Financial Disclosures (TNFD)

[7] UN Biodiversity Conference (COP 15)

[8] UN Climate Change Conference