The Environment and our Global Commons

While much corporate environmental reporting concentrates on climate change, there are a range of related environmental issues that go beyond climate change to address other threats to the life of the planet. These are sometimes referred to as the global commons, the planetary boundaries, or simply as nature.

While business organizations exist to set accountability standards on climate change, some new initiatives are underway to look at ways for business to measure and report the full range of environmental issues affecting the planet.

The global commons, most simply defined, involve the protection of our water, our land, our oceans, our climate, and the biodiversity of which we are but one part.

The concept of planetary boundaries examines the resource challenges related to these global commons: freshwater supplies; nitrogen and phosphorous cycles; ocean acidification; chemical pollution; atmospheric aerosol loading; ozone depletion; biodiversity loss; land use change; and climate change.

Risks to the Global Commons are Risks for Business

Business has an inherent interest in social stability – companies will not thrive in a situation of political turmoil, social unrest or violent confrontation. In a similar way, business has an inherent interest in the stability of our planetary systems. It will not thrive in a sustainable way in the face of weather extremes, fresh water supply risk, food supply disruption, land supply shortages and the health impacts of air, water and land pollution. Loss of biodiversity ultimately means the loss of vital knowledge and material for pharmaceutical and food systems.

Building an accountability system for the global commons is in the best interests of all – business, finance and citizens alike. The drivers of better stewardship will include financial pressure from investors, insurers and lenders mindful of the fact that capital should be applied within the boundaries of the global commons. Responsibility for a company’s impact on nature should exist from Board level and down through the organization. Every firm should be conscious of the fact that public attitudes are decreasingly tolerant of a business that is systematically damaging nature. ¹

But as with all issues with global, long-term impacts, action is best driven by coordinated international efforts that involve governments, business and civil society. The framework to protect nature will need to include alarms, rewards and penalties. Accurate, traceable and comparable information on corporate impact on global commons will underlie any attempt to raise alarms and apply regulations.

Some initiatives are already underway to establish ways of doing this.

The Task Force on Nature-Related Financial Disclosures (TNFD)²

This is a new initiative trying to stimulate business action on the big environmental picture. This coalition is focused on the financial sector in terms of ensuring that their financing can assess the impact of loans and investments on planetary integrity. The founding partners of this initiative are Global Canopy, the United Nations Development Programme (UNDP), the United Nations Environment Programme Finance Initiative (UNEP FI), and the World Wide Fund for Nature (WWF).

A number of business and financial institutions are supporting this work including BNP, Ernst & Young, Paribas, AXA, Citi, Credit Suisse, DBS, and Wells Fargo. Companies include GlaxoSmithKline, H&M, Kering, Rio Tinto and Tesco.

The Science-Based Targets for Nature³

This is a separate but related initiative. The institutions working on science-based targets have refined measures for greenhouse gas emissions reduction for some years. Over 65 environmental organizations, companies and consultancies from 22 countries are now looking at developing methods to enable companies to assess, address and track their impact and dependencies on the full range of natural ecosystems.

They propose that these targets (see figures below) demonstrate that a company is taking action to:

a) avoid and reduce pressure on nature loss;

b) restore and regenerate ecosystems; and

c) transform underlying systems to address the drivers of nature loss.

Science Based Targets initiative is part of the broader coalition, the Global Commons Alliance⁴, which is working on accountability standards for the full range of global commons.

Fig 1: Combined “nature” and “climate” ambition loops, which collectively create stronger policy and voluntary action for both climate and nature.

Source: https://sciencebasedtargetsnetwork.org/wp-content/uploads/2020/09/SBTN-initial-guidance-for-business.pdf

Fig 2: High-level target categorization for SBTs for Nature

Source: https://sciencebasedtargetsnetwork.org/wp-content/uploads/2020/09/SBTN-initial-guidance-for-business.pdf

 

Fig 3: The Action Framework (AR3T) of the Science Based Targets Network (SBTN) for companies

Source: https://sciencebasedtargetsnetwork.org/wp-content/uploads/2020/09/SBTN-initial-guidance-for-business.pdf

Both these initiatives are in their early stages. The Taskforce on Nature-Related Financial Disclosures expects to release its first framework in 2023.

By 2022, those working on Science-Based Targets for Nature aim to provide companies with methodologies and tools for target setting, a system for validation of corporate targets, guidance on target wording and claims, and a platform for targets and action plans disclosure. A preliminary guidance, however, is already available.⁵

European Union work on non-financial reporting has developed the idea of “double materiality” which is particularly relevant to protecting the global commons. This involves disclosure on both how activities depend on planetary resources, as well as how activities affect these same resources. We need to consider both our impact on nature as well as the risks which result from poor stewardship.⁶

A Holistic Approach to Global Commons

All planetary boundaries and environmental risks become the responsibility of each successive generation and require a holistic, long-term approach. There is no purpose in protecting the climate if we run out of fresh water, pollute the oceans or destroy the ozone layer.

Many of our current business systems have an erosive impact on life-giving natural systems. We cannot continue to transgress boundaries that result in the deterioration of our oceans, our fresh water, our biodiversity, our land and our climate. To overcome this predicament, we need to reassess some fundamental issues such as our concepts of value, ideas about the essential and acceptable role of companies within our society; and what a more holistic definition of ‘fiduciary duty’ may mean for those taking financial decisions.

These initiatives on protecting nature aim to ensure that business plays its role alongside government and environmental groups in protecting all the common assets that we share, and which we depend upon for continued life.

 

¹ Global Commons Alliance. 2021. Building an Accountability System for our Global Commons: Synthesis of accountability workshop May 2021 (Draft)

² Taskforce for Nature-Related Financial Disclosures. https://tnfd.info/

³ Science-Based Targets Network. www.sciencebasedtargetsnetwork.org

⁴ Global Commons Alliance. www.globalcommonsalliance.org

⁵ Science Based Targets Network. 2020. Science-Based Targets for Nature: Initial Guidance for Business. September 2020. https://sciencebasedtargetsnetwork.org/wp-content/uploads/2020/09/SBTN-initial-guidance-for-business.pdf

⁶ European Commission. 2019. Guidelines on reporting climate-related information. https://ec.europa.eu/finance/docs/policy/190618-climate-related-information-reporting-guidelines_en.pdf