With the conclusion of COP15, 2022 has been a pivotal year for nature and biodiversity with international efforts stepping up to halt and reverse biodiversity loss, writes Orlaith Delargy, KPMG EMA Nature & Biodiversity Lead.

Target 15 of the new Global Biodiversity Framework agreed at COP 15, which concluded on 19 December 2022, aims to ensure that bigger companies disclose “their risks, dependencies and impacts on biodiversity”.

The Taskforce on Nature-related Financial Disclosures (TNFD) is developing a framework to enable companies and financial institutions to integrate nature into their decision-making. More and more market participants are joining the TNFD and piloting its guidance, but gathering data and metrics is a big challenge, and organizations will need help to refine their measurement and reporting processes.

The next step is getting nature on the balance sheet – something that many companies are only starting to think about. Placing a monetary value on a company’s impacts and dependencies on nature can help to make the topic understandable in the boardroom and drive further action. Natural capital accounting can help to reveal how nature supports business activities and delivers tangible environmental and social benefits. These accounts give stakeholders vital information to allocate resources and reward responsible investments.

From good intentions to action

A recurring message from COP15 is that disclosure is not the end game in itself; it provides a foundation for making nature-related strategic, governance, operational and capital allocation decisions.

With this in mind, market participants are asking what “nature positive” means in practice, acknowledging that the transition will look different across industries and sectors. Several initiatives such as the World Economic Forum, the World Business Council for Sustainable Development, the Impact Mitigation and Ecological Compensation (IMEC) thematic group of the International Union for Conservation of Nature (IUCN) and the EU Business and Biodiversity Platform are working to develop principles that organizations can follow on this journey.

Nature and biodiversity “credits” will likely have a role to play in the road to nature positive and hold significant potential to increase the flow of finance to nature restoration and conservation projects. This was a hot topic at COP15, with discussions centering on how to establish and extend nature markets, ensuring measurability, trust and integrity and learning lessons from the carbon markets.

With the GBF now in place, the global goals will need to be translated by governments into national goals and targets. But the private sector need not wait to act. Organisations can already get started by assessing their impacts and dependencies on nature, conducting a TNFD pilot, incorporating nature into climate transition pathways, and setting science-based targets for nature.  

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