New disclosure standards and coalitions
Recognizing that biodiversity and climate change are intrinsically linked, investors have sought to establish new disclosure standards and coalitions focused on addressing biodiversity and nature loss:
- The Science Based Targets Network (SBTN), a coalition of nongovernmental organizations and business associations including Ceres, the World Economic Forum, and the UN Global Compact, has released guidance for companies on assessing, identifying, measuring, disclosing, and setting targets covering nature and biodiversity impacts that are material to their business.
- The Finance for Biodiversity Pledge, a coalition of 126 financial institutions with approximately $20 trillion in assets under management has committed to sharing knowledge, engaging with companies, assessing impacts, and setting targets to protect and restore biodiversity through their finance activities and investments.
- The Taskforce on Nature-related Financial Disclosures (TNFD) recently released a final draft of its disclosure framework that is expected to be finalized in 2023. TNFD will require companies to assess, measure, report, and act on nature-related risks. TNFD is also launching a pilot program with member companies that will cover three systems: energy, land use (including food, agriculture, and forestry) and the built environment––the value chains for which account for about 90 percent of the pressure on biodiversity.
- The Global Reporting Initiative (GRI) recently released its exposure draft on new biodiversity standards, which seeks increased disclosure on supply chain and location-specific impacts on biodiversity and introduces new disclosures on the direct drivers of biodiversity loss and the impact of companies and their suppliers on ecosystems and local communities and management responses.
- The International Sustainability Standards Board recently committed to considering the recommendations of TNFD in scoping its forthcoming climate-related disclosures.
Increasing shareholder engagement and activism
Shareholder activism also continues to grow. At the COP15 summit last year, a coalition of investors led by AXA Investment Managers, BNP Paribas Asset Management, Christian Brothers Investment Services, and Columbia Threadneedle Investments, among others, partnered with Ceres, the Institutional Investors Group on Climate Change (IIGC), and the Finance for Biodiversity Foundation to launch Nature Action 100. That new initiative will seek engagement with companies in sectors deemed to be important to reversing nature loss and identify corporate actions that need to be undertaken to protect and restore nature. The initiative parallels Climate Action 100+, another investor-led initiative that has resulted in significant investor engagement and monitoring of companies’ greenhouse gas emissions in recent years.
The launch of Nation Action 100 follows a landmark campaign launched last year by Ceres and a coalition of investors with $10 trillion under management. The campaign sought to push the biggest corporate water users and polluters to treat water scarcity as a financial risk, including pressing for increased board-level oversight on water issues and the development of time-bound, science-based targets and policies to address adverse impacts on water.