Sep 45 min read

An A-Z of Sustainability: N is for Nature

This is another one of those topics where people have written whole books about it, so I’ll only really scratch the surface in this article. Whilst much attention has been focused on the climate crisis, at the same time we are also in the middle of a nature crisis, or as it is often described, a biodiversity crisis. It is estimated that 1 in 8 species of plants and animals are threatened with extinction and that we have already significantly altered 75% of the world’s land by human actions. The ocean has been similarly affected with significant consequences for marine wildlife from overfishing and pollution. Of course, the nature crisis and climate crisis are not completely independent – climate change is causing impacts in nature such as drought, and nature impacts are making climate change worse e.g. deforestation.

So, what has this got to do with business and what should you do about it? Well, it matters because we all depend on nature. Our economy is part of our society which exists within our planetary boundary, not separate from it. There is nowhere else to source our food from and nowhere else to throw our rubbish away. However, you wouldn’t know it from the way we currently operate, using resources as if they were infinite and creating pollution and waste with huge impacts. Apart from the moral imperative to act for the long term good of society, slowly people have woken up to the fact that the impacts on nature are starting to have direct impacts on companies, either from aspects of nature that companies depend on, or from the threat of legislation or reputational damage in this area. The recent ESRS legislation in Europe (see M is for Materiality) has heightened this, with companies required to identify material impacts.

For some companies the link to nature is very clear. If you are involved in building infrastructure or housing, you know you are having a direct impact on nature in the locations in which you are building. The same is true of mining or any aspect that is linked to agriculture. For others it may not be their direct operations that are so critical, but the impacts associated with their suppliers which makes it even more challenging.

There are many parallels in how the corporate agenda on nature has evolved with the agenda on climate, but there are a couple of very important differences. Firstly, it doesn’t matter where you emit carbon, the impacts are global – we only have one atmosphere that is being impacted. Secondly, we can reduce carbon impacts to a single metric, CO2 equivalents (see C is for climate change and carbon reduction) making it easy to set targets and monitor progress. However, with nature location is important – consider reliance on a particular source of water for your operations. And the issues associated with nature are so varied that they can not be reduced to a single metric.

Inspired by the Taskforce for Climate-related Financial Disclosure (TCFD), the Taskforce for Nature-related Financial Disclosure (TNFD) was formed a few years ago with the aim of helping companies to determine how to disclose relevant and useful information to stakeholders on nature related topics. Whilst many of the structures are akin to the TCFD, the important differences are dictated by those two key differences for nature - location and no single metric.

If you want to start to understand where nature fits in your sustainability plans, I would recommend using the TNFD approach. Like TCFD, it has been market led and is a widely accepted model that is able to be used to meet wider reporting requirements like ESRS and GRI, with the ISSB also using this as the basis for their research in this area. The TNFD called their risk-based approach LEAP: Location, Evaluate, Assess and Prepare. So, let’s look at each stage to see what it means in a bit more detail.

In the “Location” phase you consider where you operate and what locations are in your value chain. Are there impacts on nature, or areas where your business depends on nature? What specifically is affected, for instance forests or the marine environment. TNFD refers to these particular parts of nature as “biomes”. Within biomes are there any particularly sensitive sites? As you start to home in on things, the TNFD provides sector guidance and reference other data sources to help.

In the “Evaluate” phase, the emphasis is on focussing down from the generic to the specific and trying to compile a list of dependencies and impacts to allow you to prioritise. It is about understanding what the elements of nature are that your business depends on, what services or benefits your business gets from those elements and the type of impacts involved. In TNFD language, these are “environmental assets”, “ecosystem services” and “impact drivers”. So, you might reference water bodies that you discharge waste into and the impacts on fresh water that this might have. Or it might be particular species that you, or your suppliers, rely on for crops to be pollinated. The idea is that at the end of this stage you conduct a materiality assessment so that you have a list of priorities for the next stage.

“Assess” is about taking your priorities and looking at what the risks are and what you need to do about them. It uses some of the same approach as TCFD in considering physical risk (what happens if that body of water you rely on dries up because of drought, or that pollinator declines significantly) and transitional risks (what regulation may come in that would restrict your use of water from that particular source or restrict what you could discharge to it).

The final stage is “Prepare” which is what you are doing to respond to the issues and risks you have identified, how you will get internal alignment and resources allocated and how are you going to report on progress including any targets you may set.

I’ve not really done the TNFD framework full justice here and there are a lot more resources on their website, particularly the knowledge hub (Knowledge Hub – TNFD) but hopefully this gives an idea of the process involved. I know that if this is an issue that is material for your business, my advice would be to get started and learn as you go. If you are a big multinational with lots of sites don’t try to do it all at once. Start with a few sites connected to what you think are likely to be the most significant nature impacts and go from there. You’ll learn a lot about the process but also about your business too and that will help determine how you move on.

There are also bodies like the Science Based Targets for Nature who are establishing a process for grounding targets in this area in rigorous science in the same way that SBTi have done for climate targets. Clearly, there is a lot happening in this area which is evolving rapidly. Although there are not any mandatory specific nature related disclosures required, as there are on climate, the more general sustainability disclosure requirement, such as ESRS in Europe, do require nature related issues to be disclosed if they are material. If this all sounds too daunting, then please contact CEN Group who can guide you through this important but complex area.

About the Author

Chris is a senior strategic leader with over 25 years’ commercial experience including sales, marketing, strategic planning and major business change initiatives at AkzoNobel and ICI. He has a wide knowledge of sustainability and how to integrate this into business having held senior sustainability roles at AkzoNobel for 12 years, including as Global Sustainability Director Decorative Paints and AkzoNobel Planet Possible Programme Manager. Chris is now an independent sustainability consultant and a pension trustee director.