Nature and biodiversity part 1: Key to growth and resilience
Nature and biodiversity part 1: Key to growth and resilience
In a previous article about TNFD we explored the expectations and developments in the financial sector and what institutions must do. This is the first part of a two-part series looking at what organisations need to be thinking about and doing in terms of nature and climate to protect and create value.
Why Nature Matters to you
In an increasingly volatile global landscape, organisations are beginning to realise that their success is intrinsically tied to the health of nature. Ecosystems provide essential services – from clean air and water to food security and climate stability – yet they are under threat. Research estimates that over half of global GDP is moderately or highly dependent on nature, making biodiversity loss a significant risk across sectors.
By integrating nature into corporate strategy, businesses can not only mitigate risks but unlock new opportunities for growth and resilience. Healthy ecosystems regulate the climate, replenish soils, pollinate crops and purify water. For industries such as agriculture, pharmaceuticals and tourism, these services are directly tied to their operations. Yet, the loss of and changes in biodiversity due to deforestation, pollution and overexploitation poses material risks to companies. For instance, declining bee populations threaten crop yields and the stability of the global food supply chain. Further impacts are yet to be identified.
Critically, investors, customers and regulators are increasingly concerned about nature-related risks and are demanding transparency and regulatory compliance on how businesses interact with and impact the environment. Embracing nature can no longer be seen as a cost; instead, it’s a key enabler of growth and resilience in the face of climate change and resource scarcity.
Addressing Ecosystem Degradation
Over the past decade, governments and organisations have made some strides in addressing ecosystem degradation, but challenges remain. Global initiatives like the UN Decade on Ecosystem Restoration and the Paris Agreement provide a platform for governments and businesses to coordinate actions for environmental sustainability. Additionally, NGO conservation projects and corporate sustainability programmes aim to restore forests, clean oceans and preserve endangered species. However, progress remains fragmented and ecosystem degradation continues at alarming rates. Companies in key sectors are increasingly adopting a nature-positive¹ approach, which focuses on halting biodiversity loss and restoring ecosystems.
Frameworks and standards to guide you
For companies looking to integrate nature into their strategy, several frameworks and standards can provide guidance:
- The North Star - Taskforce on Nature-related Financial Disclosure (TNFD): encourages sustainable practices that protect ecosystems and builds long-term resilience. The framework is aligned with regulations and standards, helping organisations integrate nature and biodiversity into their strategic planning. Like the Taskforce on Climate-related Financial Disclosures (TCFD), TNFD emphasises transparency, requiring companies to assess and disclose their impacts on nature. For many, your experience from TCFD reporting will stand you in good stead. Starting with qualitative reporting is the first step towards quantification.
- Grounded in Science - Science-Based Targets Network (SBTN): Building on the success of SBTi for climate action and aligning with the UN SDGs, these targets guide businesses in setting measurable, science-backed goals to reduce their negative impacts on ecosystems and biodiversity.
- A Capitals Approach - Natural Capital Protocol: A standardised framework for businesses to identify, measure and value their impacts and dependencies on natural capital through a four stage process, supporting better decisions by including how we interact with nature in decision making.
- The Multilateral Treaty - Convention on Biological Diversity (CBD): This framework sets targets to reduce biodiversity loss and restore ecosystems, aligning corporate actions with global biodiversity goals. Just as the 28th United Nations Climate Change Conference of the Parties (COP28), held in Dubai last year focused on climate, the COP16 CBD taking place in Colombia focuses on biodiversity. This conference is part of the broader Kunming-Montreal Global Biodiversity Framework and informs national/regional strategies like the EU Biodiversity Strategy for 2030 and standards such as the Global Reporting Initiative.
These frameworks encourage companies to adopt a holistic view of their environmental impact, extending beyond carbon to consider their broader ecological footprints. Businesses that don’t adapt could find themselves at a competitive disadvantage or facing reputational risk.
Navigating Challenges: Directors’ Duties and Strategic Integration
Directors have a fiduciary duty to act in the long-term interests of their organisations, including considering environmental risks. Failure to manage these risks can lead to litigation, as stakeholders demand accountability. Transitioning to a nature-positive model is challenging. Directors need to identify key biodiversity risks material to their sector, measure ecosystem dependencies and balance short-term profits with sustainability.
Prioritising Actions: A Sector-Specific Approach
No two industries have the same impact on biodiversity, so the first step is understanding where the greatest nature-related risks lie. For instance, agriculture and forestry businesses should prioritise land and water stewardship, while manufacturing companies may focus on supply chain transparency and resource efficiency.
You should conduct nature-related risk assessments to identify which ecosystems you depend on and where you have the most significant negative impact. Companies can then focus efforts where they will have the greatest positive effect, whether that’s protecting water resources, reforesting land, or enhancing biodiversity on farms. Leadership commitment is essential, embedding strategies at board level with clear governance.
What Next: Moving Towards a Nature-Positive Future
Becoming nature-positive is not just about mitigating risks, but seizing opportunities for innovation, reputation enhancement and operational resilience. Leading businesses are investing in nature-based solutions – from sustainable agriculture practices to green infrastructure – that offer both ecological and economic benefits.
Ultimately, integrating nature into corporate strategy is a pathway to long-term growth and resilience. By prioritising nature in decision-making, companies can future-proof their business, protect their assets and contribute to a more sustainable and value driven future that demonstrates leadership and resilience.
Hemantha Perera Trevelyan and the team are happy to discuss points raised in this article to help you navigate frameworks and standards to protect and create value.
¹ Nature Positive is a global societal goal defined as ‘Halt and Reverse Nature Loss by 2030 on a 2020 baseline and achieve a full recovery by 2050’. This will in turn improve nature’s ability to contribute to human wellbeing.