As we head into what promises to be a scorching summer on the heels of the hottest year on record, the climate crisis becomes more evident with each new temperature record that falls. But climate change is not our only pressing environmental threat.
Scientists also warn of an accelerating biodiversity crisis of habitat loss and extinction, with as many as a million species at risk.
On Wednesday—the International Day for Biological Diversity—the International Union for the Conservation of Nature released a report that found that more than half of the world's mangrove ecosystems are at risk of collapse due to development, pollution and sea level rise, the latest evidence of the growing threat to nature. The United Nations Environment Programme has called for a "whole of society approach," including the private sector, to address both climate change and biodiversity loss.
But while thousands of companies around the world are taking action to monitor, disclose and reduce greenhouse gas emissions, few widespread mechanisms are in place to systematically measure and reduce business impacts on nature. On the day dedicated to biodiversity, it's worth asking about what businesses are doing to reduce other harms to nature.
"There's obviously a lot more to the rest of nature than half a dozen or so gases that we measure in terms of greenhouse gases," Taskforce on Nature-related Financial Disclosures Executive Director Tony Goldner told Newsweek. "We now need to see the same thing happen for the rest of nature."
The TNFD launched in 2021 as a partnership among financial institutions, corporations and market service providers with a goal of developing business disclosure practices that would better account for impacts on nature.
Goldner said the 40 task force member organizations realize that many aspects of business and industry depend on services nature provides, from clean water to the pollination of crops. The estimated economic value of these "ecosystem services," as scientists call them, amounts to staggering sums.
Consider the role of the humble insect. The U.S. Department of Agriculture said the pollination of crops adds $10 billion in benefits annually just in the U.S. Globally, pollination contributes more than $3 trillion to the world economy.
And how do we repay our helpful bees, beetles and butterflies? Several studies have documented sharply declining populations of insect pollinators in industrialized parts of the world, and scientists link those declines to business activities such as the conversion of natural areas for agriculture and heavy pesticide use.
"If we degrade the systems that provide these benefits into our businesses, those benefits won't continue to flow into our business models," Goldner said.
Building on the best practices used for climate disclosure, TNFD developed a set of 14 recommendations for nature-related information that companies should disclose to potential investors and other stakeholders. Those include a company's nature-related dependencies, impacts, risks and opportunities and their strategies for addressing them.
At the World Economic Forum's annual conference in January in Davos, Switzerland, TNFD announced its early adopter companies, and the list has since grown to some 370 companies that have committed to nature-related disclosures.
As investors and lending institutions get more information about companies' nature-related issues, Goldner explained, they can make more informed decisions about where to provide capital.
"Ultimately, we're trying to help shift the flow of capital to more nature-positive outcomes, and disclosure is one tool in the toolbox," he said.
The task force is part of an emerging effort to get nature on the ledger sheets along with the other assets and liabilities companies track. Proponents argue that this is not just important for environmental improvement, it is a business imperative.
"None of these are any longer just feel-good moral things," Ethan Soloviev told Newsweek. Soloviev is chief innovation officer at HowGood, an independent research company that advises major companies on food product sustainability. "The hard business realities of the 21st century are that you must know your impacts on climate and biodiversity or risk disruption."
Connecting Nature and Climate Change
At the nonprofit Science Based Targets Network, SBTN, another new initiative is underway to help businesses better understand and act on their impacts on biodiversity and freshwater, land and ocean ecosystems.
About 300 companies are assessing their impact on nature with SBTN's help, the early step toward reducing harm. Where Goldner's task force works to get companies to measure and disclose information, SBTN works to give companies clear ways to act.
"We're providing the science-based methods for companies to set measurable, actionable and time-bound targets on their impacts," SBTN Executive Director Erin Billman told Newsweek.
SBTN builds on the success of a related effort, the Science Based Targets Initiative, a nonprofit partnership which has become a respected source for verifying and tracking company efforts to reduce greenhouse gas emissions and achieve net zero.
Billman said it's time that companies started thinking of climate and biodiversity as two sides of the same coin.
"They're inextricably intertwined," she said. "Nature is one of our biggest allies in fighting climate change."
The forests, fields and mangroves that harbor species diversity are also crucial to the carbon cycle, drawing down and storing some of the excess CO2 we have pumped into the atmosphere.
Integrating nature and climate considerations can help companies come up with plans that have a better chance of working, Billman said.
"Because if you look myopically at just trying to meet a climate goal, you're likely to create issues," she warned.
Carbon-offset tree plantations offer a cautionary tale. Some companies sought to make up for their CO2 emissions by planting single-species farms of fast-growing trees. But recent research showed those can do more harm than good by displacing native species and sucking up scarce water. Scientists concluded that the effort would be better put toward conserving existing forests and tailoring tree planting to better match local environmental conditions.
"By expanding the aperture to look more holistically, you find more robust and resilient solutions," Billman said.
What's Driving Nature Disclosures
A third group working to get more businesses to account for nature impacts used the International Day for Biological Diversity to announce the first companies to adopt comprehensive nature strategies.
It's Now for Nature, a campaign by the nonprofit group Business for Nature, developed a handbook for companies to follow to come up with robust nature strategies. The first five companies to adopt strategies include British pharmaceutical company GSK.
"Nature is vital for human health and the development, manufacture and supply of medicines and vaccines," GSK Vice President for Environmental Sustainability Claire Lund said in a statement emailed to Newsweek. "Taking action to protect and restore nature is business critical."
GSK also appears on Newsweek's 2023 list of the World's Most Trustworthy Companies, where it ranks 16th among companies in the health care and life sciences sector.
A review of the early adopter companies working with Tony Goldner and his disclosure task force shows considerable overlap with the companies that appear on Newsweek's rankings related to corporate responsibility. Of the task force's early adopters, 22 are companies that also appear on at least one of Newsweek's lists of America's Most Responsible Companies, America's Greenest Companies and the World's Most Trustworthy Companies.
Those companies represent a range of industry sectors, including financial giant Bank of America, Spanish electric utility Iberdrola and several companies in the agriculture, food and beverages businesses, such as Japan's Asahi and U.S.-based Bunge.
Billman said many of the companies SBTN works with belong to industry sectors with a close connection to nature, such as agriculture and food services, textiles and utilities.
"They're the ones that I think already see the materiality of nature to their business more directly," she said.
Many of the companies embracing nature-related financial disclosure are either based in the European Union or have a significant consumer or supply connection to the E.U. This points to the important role of regulation, Billman and Goldner agreed.
The E.U.'s Corporate Sustainability Reporting Directive took effect last year, and this summer thousands of major companies that do business in the E.U. will need to begin compliance with its rules on the social and environmental information that companies must report.
HowGood's Ethan Soloviev said that in addition to regulatory mandates, investor pressure is also driving some companies to adopt nature strategies and disclosures. He said he is heartened by the growing number of businesses making commitments but is also aware that—as is often the case with climate commitments—the pledges are not the same as action.
"Companies have been relatively good at making commitments," Soloviev said. "Following up on those commitments is another matter."
The upcoming international negotiations on biodiversity taking place in Colombia in October offer an opportunity for participating countries and their major businesses to take more solid action on nature.
"The risks, not just to the planet but also to business and finance, are escalating," Goldner said. "The climate science and the science around nature are telling us that the premium has to be on moving quickly."
fairness meter
To Rate This Article
