Reducing emissions isn’t enough, reversing the climate crisis means restoring balance
Dr Andrew Coburn, CEO and Founder of sustainability analytics firm Risilience, explains how to prepare for a future in which biodiversity is as regulated as greenhouse gases.
Global business is no stranger to reporting on climate. A raft of climate-and-nature-related regulation has positioned net-zero targets and transition plans at the forefront of business agendas. Add the escalating price of carbon, a heightened risk of climate litigation and changing consumer-demand to the business mix, and the value of credible transition planning for the low-carbon and nature-positive economy is evident.
Net-zero target setting and transition plans are to be welcomed but organisations must ensure that ambition aligns with action. Late last year, when Net Zero Tracker announced that half of the world’s largest companies were committed to net zero, the news came with a caution that “the integrity of company emission reduction targets should urgently improve if they are to be met on time”.
Reporting on climate has long been a soft space for positive messaging but the optimism conveyed in publicly-facing sustainability statements often betrays the complexity of the issues at hand. This is significant because time is of the essence. We are approaching multiple climate-and-nature-related tipping points, which could have catastrophic consequences for people and planet.
Reporting on nature
Regulatory focus on nature is increasing. The Task Force for Nature-related Financial Disclosures (TNFD) provides a set of voluntary recommendations and guidance for organisations to report and act on evolving nature-related dependencies, impacts, risks and opportunities. The TNFD is at the frontier of nature reporting but the mandated EU Corporate Sustainability Reporting Directive (CSRD) is beginning to significantly shape corporate thinking around nature.
The need for restoring and protecting biodiversity and nature, globally, is now framed by the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF), signed in December 2022 at the Convention on Biological Diversity’s (CBD) 15th Conference of the Parties (COP).
The GBF agreement is aimed at halting and reversing the loss of the planet’s biodiversity by 2030. The framework includes targets for the conservation and sustainable use of biodiversity, recognising its intrinsic value and its vital role in supporting human well-being and economic stability. The framework will be reviewed in 2024, with an emphasis on considering progression towards national goals and encouraging participating parties to go further.
The inclusion of biodiversity and nature in financial reporting agendas is driven by increasing awareness among investors and business leaders of the economic risks posed by biodiversity loss and emerging opportunities in a nature-positive economy. The integration of these considerations into financial decision-making processes promotes sustainable business growth, investment in nature and nature-based solutions in the climate space, and greater resilience against environmental risks. The overall goal is to support a shift in the flow of global capital away from nature-negative outcomes and towards nature-positive activities.
The interplay between reducing carbon footprints and nurturing biodiversity must be carefully considered at the corporate level. It requires credible transition plans, informed by sustainability intelligence, to support nature-positive and net-zero outcomes integral to business resilience.
Understanding the climate-nature nexus
Nature and biodiversity loss undermine the resilience of ecosystems, reducing their ability to provide essential services such as carbon sequestration, water purification and pollination that are crucial for human survival. This loss directly exacerbates the climate crisis by diminishing natural carbon sinks and disrupting climate regulation leading to more extreme weather events and unpredictable climate patterns.
The interconnection between biodiversity loss and the climate crisis amplifies existential risks, as the degradation of natural habitats accelerates climate change, creating a feedback loop that threatens the planet’s life-support systems.
Regulatory emphasis on nature is as crucial as the focus on carbon. The very foundation of our global economy, agriculture, relies on common crops which in turn depend on a stable climate and thriving pollinators. The loss of a single pollinator species can cascade through an ecosystem, impacting food production and supply chains which can lead to increased costs to business and to the broader economy.
The vitality of our natural world is not a ‘nice to have’ for corporates but a central pillar of economic stability. Corporations need functioning markets and critical ecosystems to flourish. Maintaining the staples for business success provides organisations with a strong incentive to play their part in addressing the dual climate-nature crisis by developing credible transition plans that are both nature positive and net zero.
Mitigating risk and optimising opportunity
Organisations can take proactive steps to mitigate their climate-and-nature-related risks to avert future financial costs associated with use of natural resource and stewardship of biodiversity.
A forward-looking and data-driven approach that enables organisations to consider, for example, the intensity of their water use, the locations of their operations relative to areas of biological importance and their reliance on staple crops can position them advantageously for a future where nature is likely to be as heavily regulated as carbon emissions are today. Understanding an organisation’s value chain in relation to its nature-related dependencies, impacts, risks and opportunities will be essential to aligning with evolving and increasingly rigorous regulation.
To achieve this, corporations could:
- Engage in Science-Based Targets for Nature (SBTN): By setting quantifiable, science-based targets that align with global efforts to conserve and restore nature corporations can ensure their business models support biodiversity and ecosystem health. This approach provides a clear roadmap for reducing environmental impact and contributes to global conservation goals.
- Develop an understanding of nature-related risks and opportunities, impacts and dependencies: Companies must conduct initial qualitative assessments to understand how their operations interact with the natural world. Identifying and understanding these dynamics will enable an organisation to quantify its exposure to nature-related risks. Developing lines of sight to nature-risk dynamics will surface opportunities to make supply chains and operations more resilient to biodiversity loss and enhance ecosystem resilience through corporate practices.
- Integrate nature-based solutions: Organisations should consider incorporating nature-based solutions into their sustainability strategies. This approach addresses climate change and biodiversity loss simultaneously. Solutions might include investing in ecosystem restoration, sustainable land management practices and green infrastructure to provide economic benefits, while enhancing biodiversity. Being able to prioritise and measure returns on nature-based solutions is enabled, in part, by the quantification of nature-related risks and opportunities, impacts, and dependencies.
- Adopt biodiversity net-gain principles: Corporations developing sites as part of their operations can commit to leaving the natural environment in a measurably better state than before it’s interventions and interactions. By implementing biodiversity net-gain principles, corporations can ensure their activities contribute positively to local ecosystems.
Taking action, now
Expediting learning with new data and tools to address these challenges will enable companies to create a joined-up approach to reporting on both nature and climate, understanding where they diverge and overlap.
Now is the time for action. Businesses need to hold themselves accountable through transparent reporting of their impacts – implementing rapid and extensive mitigation activities across the value-chain, and taking the initiative to restore and regenerate landscapes to be resilient, so that our natural world can continue to provide extrinsic and intrinsic value to us all.
More features:
https://environmentjournal.online/editors-pick/no-growth-on-a-dead-planet-budget-2024-is-another-climate-blow/
https://environmentjournal.online/headlines/what-the-uk-must-do-to-meet-its-2030-net-zero-targets/
https://environmentjournal.online/headlines/quick-question-whats-a-repair-cafe-and-how-does-it-work/
Images: Aaron Burden (top) / Guy Bowden (middle) / Dawid Zawiła (bottom)