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Bringing nature into the boardroom
The mix of attendees at any major summit can usually tell you a lot about the inflection point a global issue has reached. At the COP15 Biodiversity meeting in Montréal in December 2022, over 1000 corporate entities were present among the politicians and scientists, an indication that nature and biodiversity have become pressings concerns for the world’s C-suite leaders.
Their attendance wasn’t driven by simple interest in the environmental agenda of course. The summit’s conclusion was a landmark international agreement signed by 190 countries and a new Global Biodiversity Framework (GBF). Within the many targets defined in the GBF are new responsibilities (and soon, regulations) towards the natural world for businesses to plan for and respond to.
It’s true that some of the agreement’s new objectives/aspirations lack a numerical target, but then that’s often been the price of achieving consensus within global multilateral environmental agreements. However, the GBF represents a willingness and momentum that is expected to cascade through national legislation.
Where previous attempts to set and achieve targeted improvements to nature and biodiversity have been only partial successes, the new framework recognises the need to consistently raise awareness nationally and build a public case for looking after our natural world. That attention will of course be levelled not just at governments but also businesses large and small.
How to work with Target 15
Within the GBF, Target 15 means governments will require all large business and financial institutions to assess and disclose their risks, impacts and dependencies on nature, through their operations, supply and value chains, and portfolios.
It supports corporate reporting practices and mechanisms, some of which we are already seeing through the arrival of the new EU legislation. But as the name suggests, this target is likely to set global standards for the way we treat the natural environment. Businesses are already beginning to digest the risks, operational, financial and investment implications, and to prepare for the likely regulatory impacts, which will vary by region and country. In a global economy where supply chains have recently been broken or complicated by Covid-19, war and sanctions, this is another layer of complexity to grasp and navigate.
As businesses are grappling to calculate their CO2 emission of their operations and assets, biodiversity and nature present a far more complicated regulatory challenge. To date we’ve had no common measurement for biodiversity. It’s inherently complex, with massive bio-geographical variability across ecosystems, a multitude of elements to measure. What counts as ‘loss or damage’ is often locally defined. For a company with a global footprint, with say data centres or mining interests in various locations, understanding their operational risks, impacts and regulatory exposure will be very challenging.
Simplifying the complexity
Today there is work underway to develop functional frameworks that enable private corporations to report on their biodiversity impacts and responsibilities. Efforts like the Taskforce on Nature-related Financial Disclosures (TNFD) and Science Based targets for Nature (SBTN) are beginning to help organisations set targets, report and disclose. And at Arup we’re helping to develop these reporting standards, through our work with formal and strategic partnerships, such as SBTN, C40, Global Commons Alliance, Ellen MacArthur Foundation, to name a few.
At Arup we are already enabling organisations to plan and implement a rigorous response to the nature agenda. This is underpinned by our technical expertise, deep experience and understanding of the many related sectors and our delivery of nature restoration on the ground – the essence of putting nature on a path to recovery.
For businesses, faced with in excess of 120 emerging and different tools to measure biodiversity, there’s a clear need for unified and credible standards, so that even if the mechanisms and regulation are not yet fully defined, organisations can still progress and align themselves with these emerging realities.
Working with what we know
Understandably, beyond familiar regulations on single issues like pollution, few businesses are likely to have an intuitive grasp of the biodiversity implications of the services or products they produce. We are increasingly hearing ‘nature positive’ being used as a term for the overall ethos leaders want to see, but not always clarity about what might have to change to make that goal become a substantive part of their operations. The data, measurement and metrics needed for this level of accounting across an entire organisation, are undoubtedly hard.
However, I believe that, even while national biodiversity approaches are still being defined, there are already clear principles that businesses can adopt right now. At its heart biodiversity is challenged by land/sea use change, exploitation and damage, pollution, invasive species and climate change. So for any business this fundamentally means asking and understanding where are our touchpoints with nature, how are we adversely impacting on it and how do we halt and reverse this?
These (and many related) issues point to the need to end the ‘out-of-sight, out-of-mind’ assumptions that were often quietly part of long supply chains. Responsibility must be end-to-end, from initial extraction to operational practice to the end consumer. It will be a radical shift but it’s the only way to ensure the planet’s boundaries are not transgressed.
“For any business this fundamentally means asking and understanding where are our touchpoints with nature, how are we adversely impacting on it and how do we halt and reverse this? ”
A license to operate
Even though reporting on direct/indirect impacts on biodiversity is not mandatory under the new framework, its importance is still implicit. There’s a clear requirement for corporate entities to be transparent about biodiversity impacts, and it will gain ground as a priority for consumers, part of a company’s social license to operate. Pension funds and other major investors will approach damage to nature as a business risk that must be avoided. At the same time, peripheral legislation that echoes the targets of the GBF is starting to emerge within the EU, with the corporate sustainability reporting directive and the recent deforestation regulations where it will no longer be legal to import or export any product in to the EU that’s associated with deforestation; this will have significant implications from direct operations through to supply chains.
Part of the bigger picture
We can already see that net zero commitments and transition in relevant sectors will not be possible (or enduring) without the restoration and protection of nature. This emphasises the urgency to integrate biodiversity into corporate policies and operations. Here at Arup, we are already bringing our biodiversity expertise to the climate and decarbonisation programmes we work on with clients. We have also committed to assessing and disclosing our impact and dependency on biodiversity by 2030, as part of the Business for Nature coalition which has signatures from over 1000+ companies worldwide. These are trends that need to accelerate.
Finally, within the ecological fraternity, we have perhaps spent too much time talking to ourselves about the biodiversity crisis and ultimately failing to engage meaningfully beyond the immediate impacts of biodiversity loss. The agreement of the GBF brings together the audiences that need to grasp its message. Across every kind of business, a more joined-up and socially responsible mindset will need to take hold, one that embraces difficult challenges, but also unlocks new opportunities, and enables us to live in harmony with nature. A new era marked by uncommon collaborations, with new partners and the adoption of new practices and priorities, will be needed if we are to achieve the transformational change our planet needs.