Could 2024 mark a boom in corporate nature strategies?

A wealth of standards, frameworks and initiatives are emerging to help businesses measure their nature-related impacts, risks and opportunities. Could 2024 finally be the year that vague corporate nature statements become corporate strategies?

Could 2024 mark a boom in corporate nature strategies?

Businesses have historically struggled to set out tangible nature targets due to a lack of clarity on how to measure progress and determine what an appropriate target should be.

This is becoming less and less of a credible excuse. Science-based targets for nature were finalised last spring and are now being tested by dozens of businesses. The Taskforce on Nature-Related Financial Disclosures’ (TNFD) framework has also launched, with the backing of more than 300 firms. The first aligned corporate reports are due this year.

And, earlier this week, Business for Nature named the first business biodiversity strategies it had assessed and found to be aligned with the principles of its Nature Strategy Handbook.

Designed to help businesses develop robust nature strategies, the Handbook details how firms can measure the level of ambition of their targets to reduce negative environmental impacts and expand positive ones. It also encourages businesses to go beyond target-setting and draw up step-by-step delivery plans – similarly to a net-zero transition plan.

The firms aligning with these and the rest of the Handbook’s principles are being spotlighted through the ‘It’s Now For Nature’ campaign. Initial participants include pharmaceutical giant GSK and French luxury fashion major Kering.

edie asks the organisation’s chief executive Eva Zabey how the campaign aligns with existing initiatives intended to enhance the credibility of corporate nature targets – like the Taskforce on Nature-Related Financial Disclosures (TNFD) or Science-Based Targets Network’s work.

She explains that the Handbook is designed to align with the key requirements of such standards and could set businesses on the path to alignment with more complex standards by laying a firm foundation.

“The Handbook’s high-level business actions are intended to give businesses four clear actions that will enable them to contribute to a nature-positive future: assess, commit, transform and disclose,” Zabey explains, adding that guidance on completing these actions “ensure that the critical components of [existing] frameworks” are captured.

Ensuring interoperability and reducing the burden on sustainability teams will be vital as ever-more standards and frameworks – voluntary or mandatory – are launched. A recent poll of 500 sustainability professionals found 70% now believe disclosure requirements have increased to the point that it impacts their ability to deliver other work.

Double materiality

One of the broadest new mandatory disclosure requirements is the EU’s Corporate Sustainability Reporting Directive (CSRD). This came into force in January 2023 and will be expanded further next January.

Ahead of implementation, several studies revealed that most businesses did not feel prepared and would appreciate further guidance.

The ‘assessment’ part of the Business for Nature Handbook outlines how businesses can go beyond measuring their impacts on nature. They should also assess nature-related dependencies and risks, This is a key facet of the CSRD, which is widely hailed for efforts to embed a double materiality approach into corporate sustainability strategizing.

It is also the centre of the TNFD, which is not legally mandated anywhere yet, but could well be if nations with TCFD mandates (the climate equivalent) decide to build upon them.

Zabey argues that smart businesses should look ahead “rather than simply reacting to changing laws and legislation”, even if this is more challenging in an election year.

She says: “Few if any, of the companies currently developing nature strategies will have done so without future regulation in mind. A credible nature strategy will put them one step ahead of any new requirements and help anticipate what’s ahead.

“Being better prepared ultimately gives them a competitive advantage and greater business resilience.”

This year, several national governments are set to signal their support for mandatory reporting in line with the International Sustainability Standards Board’s (ISSB) first two standards, which are predominantly focused on climate but do contain nature-related elements. The ISSB itself will also set out its next priority topics for standards; nature is a likely pick.

Additionally, the EU is primed to build upon the CSRD by finally signing off on its Corporate Sustainability Due Diligence Directive (CSDDD). This legislation would increase the accountability of large businesses for environmental harms such as deforestation and pollution in their supply chains.

Good governance

The Directive’s passage has been fraught. The number of companies it will apply to has been cut significantly in order to get it past Parliament, and policymakers keen to avoid being seen as burdening businesses in an economic downturn.

But there is still some hope for a voluntary race to the top. Zabey explains that there are pressures on businesses to take ownership of their relationship with nature beyond legislation and regulation.

She cites the top three drivers as pressure from customers, investors and employees. Which of the three is the most pronounced will vary from sector to sector, and firm to firm.

On the investor piece, she believes that many investors are “getting serious” about the risks of nature loss as the likely impact on GDP is better understood. This can be seen in the fact that Nature Action 100, a global investor-led initiative intended to empower financiers to better engage with clients on nature, recently firmed up its benchmark. The initiative convenes more than 200 institutional investors with more than $28trn in assets under management collectively.

On employees, Zabey notes that taking robust action on nature will be key to attracting new talent as well as retaining existing staff, calling a strong sustainability approach “an increasingly competitive edge”. A 2023 Deloitte poll found that one-quarter of workers have considered switching roles to work for a more sustainable organisation.

With all of this in mind, it’s clear why business’s nature plans must have the approval of senior management for them to be featured on It’s Now For Nature. There must also be processes in place to ensure that senior decision-makers, be that the executive or the board, are held at least partly accountable for delivery.

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