We’re living in an era of heightened environmental awareness and rising stakeholder scrutiny. Global business is facing a raft of climate-and-nature-related regulation that has positioned net-zero targets and transition plans at the forefront of business agendas.
Add the escalating price of carbon, resource dependencies, a heightened risk of climate litigation and changing consumer-demand patterns to the business mix, and the value of credible transition planning for the low-carbon and nature-positive economies is evident.
As environmental regulations tighten and societal demands for corporate responsibility intensify, businesses are expected to demonstrate a genuine commitment to reducing their environmental footprint and prioritise sustainable practices across their operations and supply chains. Merely paying lip service to sustainability will no longer suffice; companies need to embrace transparency, accountability and data-driven decision-making to substantiate their claims and efforts. Business integrity will reward companies with a social licence to operate into the future.
Businesses must act, now. Net-zero target setting and transition plans indicate progress 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 nature
Regulatory focus on nature is increasing. 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 Task Force for Nature-related Financial Disclosures (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 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 towards nature-positive activities.
Understanding the climate-nature nexus
This year’s Sustainable Futures conference, held on Wednesday 22nd May, that also marks International Biodiversity Day, brings focus to connecting climate and nature with business for better outcomes. Our conference is timely; 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 – the confluence of climate and nature analytics, data, technology and information flows that enables business to become profitably sustainable – to support nature-positive and net-zero outcomes integral to business resilience and success.
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 contribute to a more sustainable future.
Mitigating risk and optimising opportunity
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.
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. This will position organisations to become profitably sustainable, to make the most of new opportunities emerging from the climate-nature nexus and flourish while maintaining business integrity.
- Join us at this year’s Sustainable Futures conference: connecting climate and nature with business for better outcomes, on Wednesday 22nd May, 2024, at London’s Barbican Centre. See the full agenda and register here. The conference includes a keynote by author and senior Bloomberg news reporter, Dr Akshat Rathi, and features presentations and panel discussions from business and sustainability leaders representing a number of the world’s leading brands, including: Nestlé, Britvic, Pernod Ricard, GSK, Mars Petcare and many more.
- Read more about the climate-nature nexus and how business can prepare for the net-zero and nature-positive economies by downloading the latest Risilience report: Sustainability Intelligence: connecting organisations to Business 2.0.