Biodiversity bubbled up as an important — if still overlooked — issue for businesses during 2021. And sustainability professionals can anticipate the emergence of important new resources for that agenda to emerge during the months ahead.
“I think we’ll look back on [last] year and see it as a positive tipping point at which business and finance really came to understand the critical importance of nature-related risk,” observed Tony Goldner, the executive director of the Taskforce on Nature-related Financial Disclosures (TNFD), a working group of 35 financial and climate members whose mission is to develop risk management frameworks for climate change.
Elodie Chene, manager of standards at the Global Reporting Initiative (GRI), saw biodiversity loss creep to the top of the agenda of many businesses in 2021. From increased disclosures related to nature to a focus on nature-protecting projects, businesses grappled with how to move beyond commitments centered primarily on reducing carbon dioxide emissions to initiatives that address ecosystem destruction and other nuanced issues related to climate change.
While corporate climate agendas are inherently interconnected, setting biodiversity goals requires different considerations than calculating carbon reduction targets. And it will also require different reporting methodologies. And according to Chene, less than 25 percent of large companies at risk from biodiversity loss are disclosing their impacts.
“The nature agenda is different from climate emissions,” Goldner said. “[With carbon], one company contributes to a global problem, whereas nature-related impacts are local. We have to think about the issues in a slightly different way.”
The resources, verifications and guidelines around biodiversity are much less mature than those surrounding climate. But updates are coming. Here are five organizations and collaborative efforts working on biodiversity disclosure frameworks and strategy guidelines coming in 2022 to watch closely.
1. GRI and the European Financial Reporting Advisory Group
GRI and theEuropean Financial Reporting Advisory Group are working together to release an update to GRI’s biodiversity standard by the end of 2022. This standard is used by over 2,000 companies including Shell, Ferrero, Solvay and Brother; it’s self-claimed and isn’t certified or verified by a third party.
GRI has assembled a 17-member technical committee including representatives from companies such as DSM, civil societies including BirdLife International and WWF, investment institutions and labor groups that will work to update the standard over the next year.
“Our aim is to offer a global disclosure framework that supports companies to be really transparent about their sustainability and be accountable for the impacts,” Chene said. “We aim to achieve a really robust set of disclosures on the biodiversity impact of a company to help them inform decision-making and raise awareness so that they better understand the relationship with biodiversity, and hopefully support them to put in place the right actions and safeguards to protect it.”
2. The Taskforce on Nature-related Financial Disclosures
Last fall, TNFD announced the names of the organizations that will make up the team that will create a biodiversity framework that it hopes will help companies move investments away from nature-negative activities. “Our goal is to build a risk management and disclosure framework that can help to shift the flow of global capital towards more nature-positive outcomes,” Goldner said.
The 30 members from companies including Bank of America, BlackRock, HSBC, Tata Steel, Natura and Moody’s (among others) met for the first time in October 2021 and are planning to deliver a beta version of this framework by early 2022.
The team is led by Elizabeth Mrema, the United Nations assistant secretary general and the executive secretary of the U.N. Convention on Biological Diversity, and David Craig, former CEO of refinitiv and strategic advisor to London Stock Exchange Group.
Our mandate is to integrate and to create a framework that sits on top of those specific standards.
The group is working on five focus areas including defining nature-related risks, data availability, the landscape of standards and metrics, development of a beta framework, and pilot testing and integration.
“Market participants are quite familiar with the climate agenda,” Goldner said. “Although many of them are still finding it a challenge to climb up that hill and do the required analysis to disclose their climate impacts. However, the nature agenda is a lot further behind. We need to come up with a robust assessment of their dependency or impact on nature. And then the risks and opportunities need to be managed. And then create significant commercial opportunities to embrace as nature positive business models, which can also be profitable.”
3. One Planet: Business for Biodiversity
Okay, so technically this framework came out in 2021, but it was in December, so I’m going to count it as a rounding error. Regenerative agriculture is one of those 2021 buzzwords that has garnered a lot of attention, headlines and initiatives but doesn’t actually have an agreed-upon definition. One Planet’s regenerative agriculture framework should help companies report on outcomes and articulate specific objectives and benchmarks around regenerative agriculture in their supply chains.
According to the framework, the four key objectives of regenerative agriculture are protecting and enhancing biodiversity at and around farms; improving or preserving carbon and water retention in the soil, leveraging the power of plants, livestock and agricultural practices; enhancing the resilience of crops and nature, while decreasing pesticide and fertilizer usage; and supporting the livelihoods of farming communities.
Nonprofit research organization CDP has a disclosure system in place with questionnaires that address biodiversity, and it plans to update them next year to align with new science related to this subject. CDP has committed to developing its guidelines alongside both the new GRI standard and TNFD’s framework. Likewise, those organizations will take into account the CPD disclosure requirements.
“We are not setting out to try and create a competing set of standards,” Goldner said. “Our mandate is to integrate and to create a framework that sits on top of those specific standards.”
5. Convention on Biological Diversity
The Convention on Biological Diversity (CBD) is an international treaty for the conservation of biodiversity signed by 198 countries. After pausing due to the COVID-19 pandemic, the organization will meet in person in March 2022 to continue its work on creating the Post-2020 Global Biodiversity framework.
The framework is a step towards CBD’s 2050 vision of “living in harmony with nature,” and itt will contain a set of principles to guide its implementation and sets out a holistic consultation process. The work will be presented for consideration at COP15, also known as the biodiversity COP, in Kunming, China, this May.