Starting the business journey to nature positive
As businesses grapple with the challenge of meeting and accelerating their net zero targets, natural capital is emerging as the key vehicle to make it happen. Not only is nature material to all businesses, many argue we will not reach net zero without equal action towards nature positive.
In this insight piece we hear from Guy Williams, Deloitte’s Director of Biodiversity and Natural Capital. In addition to his role as Deloitte’s natural capital lead, Guy also supports as Deloitte’s global representative on the Taskforce on Nature-related Financial Disclosures, and the technical working group of the GRI Biodiversity standard.
According to the World Economic Forum, $44 trillion in economic value - over half of the world’s total GDP - is moderately or highly dependent on nature. This is a sobering statistic given humans are responsible for the loss of 83% of wild mammals and over half of the world’s tropical rainforests since the 1960s.
It was a breath of fresh air for many in the scientific community when nature and biodiversity emerged as a key theme of the COP26 summit in Glasgow. Over 140 countries committed to reversing deforestation and land degradation by 2030.
Bending the curve towards nature positive
The role of nature is emerging as material for climate action: businesses simply will not achieve net zero without pursuing a ‘nature positive’ agenda.
Nature positive encompasses actions that seek to halt and reverse nature loss. It is part of a larger ambition to ensure that by 2030, the net benefit of these actions is positive and outweighs negative impacts on nature.
All businesses with net zero commitments have now come to realise that protecting and regenerating our natural world is at the heart of reducing global greenhouse gas emissions. But even beyond these nature-based climate solutions, I see a shift towards nature-positive business models bringing a range of benefit to society at large, with predictions of more than $10 trillion in additional opportunities each year, supporting some 350 million jobs by 2030.
Both regulation and accelerating market demand is increasing pressure on businesses to act. Corporate and institutional investors are demanding nature-related disclosure and the setting of science-based targets for nature. Regulators are also taking more ambitious steps, building natural capital accounting into land management and market valuation.
A necessary framework for nature-related risk
The Australian Government is taking action to support the nature agenda domestically, using COP26 to announce Australia’s involvement in the Taskforce for Nature-related Financial Disclosures (TNFD), along with the UK, France, Switzerland and Peru.
The Taskforce for Nature-related Financial Disclosures is a global market-led initiative which aims to provide financial institutions and corporates with a framework to help map their nature-related risks and opportunities.
The TNFD framework mirrors that of the Taskforce for Climate-related Financial Disclosures (TCFD) - with the shared objective of quantifying the financial exposure that natural capital loss presents to organisations.
Ironically, the growth of business and enterprise has created an existential threat to nature and, in turn, to the entire economic system they rely upon. It’s through the TNFD framework that businesses can understand their relationship with nature and begin to bend the curve of biodiversity loss back towards nature positive.
What does it mean for businesses?
The launch of the TNFD framework is just around the corner, with a deadline of Q3 2023 announced for the creation of this new disclosure framework.
Action has already begun. Businesses are taking their relationship with nature extremely seriously and as frameworks like the TNFD become the status quo, I see that those who are prepared and proactive will be ahead of the pack.
Deloitte is honoured to be one of 30 organisations, alongside BlackRock, HSBC, UBS and Moody’s appointed to develop the TNFD framework and disclosure guidance. We are in a unique position to help our clients leverage the opportunities available through nature-based solutions.
As Deloitte’s representative on the TNFD, and a Director of Biodiversity and Natural Capital, I see an exciting ocean of new opportunity for businesses to get prepared for the TNFD and engage in new and emerging nature positive initiatives. Nature was always a key material issue for all aspects of the economy and now it is on the agenda of local and global leaders it is not going away. Businesses which leverage natural capital and nature-based solutions and see it as an opportunity to thrive will have a competitive advantage in the market.
So, what can businesses do today to begin their journey to nature positive? I see a clear path forward for businesses.
- Engage: Become a member of the TNFD forum, get plugged in to Deloitte’s Natural Capital network, and keep up-to-date on the latest TNFD developments.
- Prepare: Conduct an internal materiality assessment and risk screening to understand the impacts and dependencies on nature, existing programs and initiatives, and commence education, awareness and training.
- Commit: Set science-based targets for nature and align your net zero commitments with nature-positive principles.
- Pilot: Be showcased as a global case study of how to leverage the TNFD frameworks to implement a game-changing, future-proofed business strategy.
But importantly, ensuring nature positive is on your strategic agenda is key. The world knows it’s time to act on climate and nature is the at the heart of making net zero and nature positive a reality.
For more information on the business journey to nature positive, read WBCSD's latest guide, What does nature-positive mean for business?, or visit TNFD.
