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A forest from above
3 minute read
Featured Insight

Nature comes under the spotlight. Is your business response prepared?

As the TNFD releases the final draft of their beta framework, we look at how your organization can go beyond disclosures to restore our vital relationship with nature.

Jo Hughes

At the UN Biodiversity Conference (COP 15) held in December 2022 in Montreal, Canada, nations adopted the Kunming-Montreal Global Biodiversity Framework, with a landmark commitment to conserve and manage at least 30% of the world’s lands, inland waters, coastal areas and oceans. Target 15 of this Framework requires governments to ensure that large companies disclose “their risks, dependencies and impacts on biodiversity.” 

In recent years, we have focused on climate-related issues, with transition to a net zero economy being a key goal. Now we are going to see a much greater focus on how businesses report and manage their relationship with nature alongside climate action. ‘Nature positive’ is a term that is gaining traction, aligned to ‘net zero’, and the spotlight is firmly on the Taskforce on Nature-related Financial Disclosures (TNFD) – whose latest framework has just been released.

Businesses need to get ready for TNFD and for a shift towards a nature positive economy. In this issue of the ESG Advisor, we look at how your organization can develop an understanding of your risks and dependencies on biodiversity, explore the opportunities that emerge from this understanding, and consider the expertise and technology available to support your maturing relationship with nature.

Identify risks to take positive action

TNFD is a “risk management and disclosure framework for organizations to report and act on evolving nature-related risks”. Businesses declare the risks they have and then develop and implement a strategy for improvement for the elements most pertinent to them.

A springboard to regulation

Financial disclosures of nature-related risks are important to businesses as many governments and investors are expected to make the TNFD mandatory or at least base their own nature-based regulations on this framework. Clients may choose to voluntarily adopt the framework due to their operational environment, sustainability strategy, or as a competitive advantage, as well as being prepared for further evolution of business and nature alignment.

A platform for resilience

Forward thinking businesses are using the metrics from disclosure frameworks such as TNFD as a proactive exercise to integrate natural systems in development work. For example, in Texas, USA, we are preparing a regional plan for resilient nature-based engineering solutions to defend the coastline.

Metrics for improvements

Disclosure frameworks like TNFD are action driven frameworks, designed to show annual progress with year-on-year metrics that highlight areas for improvement. There will be core metrics that all companies use, as well as bespoke voluntary metrics defined by more ambitious organizations looking to become nature positive.

Nature-based solutions meets tech

We are seeing a growing trend towards use of technology to bring nature-related data points and trends into senior leadership meetings and board rooms as businesses seek to bring impacts and dependencies on nature into mainstream strategy. At AECOM, we’re pioneering this approach through a project in the Scottish Highlands with our Natural Capital Laboratory where we are rewilding 100 acres of forest to re-introduce lost species and developing our own natural capital accounting platform - EcoUplift - to support straightforward sustainable decision-making.

Key takeaways

1. Start understanding your relationship with nature

By exploring where your operations interact with nature and where they have an impact on nature you can plan for positive improvements. There are over 15,000 indices available for measuring this but a simple model to get started with as part of the TNFD is the LEAP assessment framework which is:

  • Locate your interface with nature

  • Evaluate your dependencies and impacts

  • Assess your risks and opportunities

  • Prepare to respond to nature-related risks and opportunities and report.

2. Build nature into your strategic priorities

Your response to nature should form part of your overall Environmental Social Governance (ESG) / sustainability strategy which in turn is part of your overall business strategy.

3. Connect your climate and nature response

We can’t achieve net zero without recognizing that healthy ecosystems with thriving nature are one of the best measures for achieving climate action, a more resilient society, and less vulnerable businesses. With common frameworks for climate (TCFD) and nature (TNFD), forward thinking firms should develop a cohesive response for both that acknowledges the inter-dependencies of climate and nature.

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