Biodiversity: incorporating nature and TNFD into your strategy | JD Supra
Biodiversity: incorporating nature and TNFD into your strategy JD Supra
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Defining Nature and Biodiversity
“Nature” refers to the natural world and includes non-living things (such as water, air and soil) and living things (such as plants, animals (including people) and fungi).
People and society, including corporates and financial institutions contribute to and are affected by nature – we have to recognise that we are embedded in nature and depend upon it for our survival. “Natural capital” can be described as the stock of renewable and non-renewable resources (e.g. plants, animals, air, water, soils, minerals) and services from which business and societies benefit.
“we must fix our relationship with the natural world or destroy human prosperity, well-being and our future. And it is with this knowledge in hand that in 2021 we must seek to join up the climate and nature agendas, and arrive at an ambitious, measurable and accountable post-2020 global biodiversity framework. To secure nature is to invest in our own self-preservation.” Inger Andersen, UN Under-Secretary-General and Executive Director of the UN Environment Programme.
In the same breath as nature, we often refer to “biodiversity” but this is slightly different. It refers to the wide array of biological life on Earth. We can observe biodiversity at two levels, in the genetic variation of species in a population (think farming and the narrow range of species which are produced) and in the variety of functions that different species perform in an ecosystem. For this reason, a common metric for biodiversity is the number of species present in an ecosystem. No one knows the number of species on Earth but around 1.2 million have been described by scientists and estimates of the total number range from 8 million to 100 million species. The Kunming-Montreal Global Biodiversity Framework (GBF) states that “An average of around 25 per cent of species in assessed animal and plant groups are threatened, suggesting that around 1 million species already face extinction, many within decades, unless action is taken to reduce the intensity of drivers of biodiversity loss”. Biodiversity is important because the more biodiversity there is in an ecosystem, the more productive that ecosystem is, and the more resilient and adaptable that ecosystem is in the face of climate and other change.
Why do nature and biodiversity matter?
In the last few years, the focus of governments and business has been on climate change. Following the adoption of the Paris Agreement in 2015, we have seen a global drive to reduce greenhouse gas emissions to reach net zero emissions to limit the impacts of climate change, to avoid, amongst other things, increases in extreme weather which will affect food generation, reduce freshwater availability, bring ecosystems to collapse and cause widespread flooding and wildfires. But we are in the middle of a twin climate-ecological crisis. Climate change and biodiversity loss are interconnected. Loss of biodiversity is a cause of climate change and restoration of biodiversity is a big part of preventing climate change. In December 2022, the Kunming-Montreal Global Biodiversity Framework (GBF) was adopted at COP 15. The GBF aims to halt and reverse nature loss and sets out global targets to be achieved by 2030 to safeguard and sustainably use nature and “relies on action and cooperation by all levels of government and by all actors of society”.
At this juncture, given the interconnectedness noted above, biodiversity and climate change arguably need to be tackled together, making biodiversity restoration a key part of climate change solutions and ensuring that biodiversity does not become a victim of those solutions. Poor alignment can lead to ecosystem destruction, including for example cases of deforestation to accommodate new solar farms, siting wind farms on bird migration paths, leading to the death of many birds, and disruption of aquatic ecosystems, flooding and blocked fish migration from hydropower. We risk accelerating nature’s destruction unless biodiversity and ecosystems are fully considered in development decisions around climate change solutions, including wind, solar and hydropower facilities.
The extent of biodiversity loss is visually depicted in the “Biodiversity Stripes” below (showing global biodiversity loss between 1970 and 2018).
The stripes were developed by Professor Miles Richardson et al of the University of Derby. Using data from the Living Planet Index they show an average population drop of 69% globally in mammals, birds, fish, amphibians and reptiles since 1970. In 2019, Rockström et al suggested in “A safe operating space for humanity” that biodiversity loss (based on extinction rate) is occurring at a rate not seen since the last global mass-extinction event and has already reached levels which the Earth cannot sustain without “significant erosion of ecosystem resilience”.
So it is clear that the rate of biodiversity loss is dangerously high and businesses need to act now. But how is biodiversity loss linked to business risk? Almost all businesses have a direct or indirect link to nature. Using a simple food industry example to demonstrate this linkage – if a driver of change, such as climate change, occurs one consequence would be strain on ecosystems which can result in a loss of a species, such as a honeybee (biodiversity loss). Honeybees (and many other types of bee and flying insects) provide nature services in the form of pollination. Decline in these species results in reduced rates of crop pollination. Agricultural and food sector businesses are consequently negatively impacted due to reduced production and even crop failures, supplies may have to be obtained from more expensive and/or distant sources, or may not be available at all. This is one example of how changes in nature impact businesses’ everyday activities. Nature-related risks are also closely connected to climate-related risks: ecosystems both emit and sequester carbon dioxide. The Taskforce on Nature-related Financial Disclosures framework (TNFD) explains much more about the risks and their interconnection here. The intention is that the TNFD provides a framework for entities to consider and disclose nature-related risks affecting their business, alongside their climate-related risk reporting.
What is TCFD and how is it different to TNFD?
The Task Force on Climate-Related Financial Disclosures provides a reporting framework for climate-related financial disclosure. It already applies in the UK and other countries, see SDG 15: Life on Land
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: jdsupra.com
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