Three out of four of the largest Nordic companies are struggling to assess their biodiversity impacts and integrate nature into their business models, a paper has found.
Copenhagen-headquartered Danske Bank analysed how 100 corporations from Denmark, Norway, Sweden, and Finland with $1.4 trillion in market capitalisation are grappling with biodiversity risk management, and published its findings in the white paper “Navigating biodiversity: a review of 100 Nordic companies”.
While all the companies taken into consideration either have significant impacts on drivers leading to biodiversity loss or are heavily dependent on ecosystems, as many as 73% of them are having difficulties handling their biodiversity risks, Danske Bank found.
“The struggle stems partly from the absence of clear guidance and frameworks for adopting biodiversity targets in the past,” the paper said.
“There is still a considerable journey ahead for all Nordic companies in fully embedding biodiversity into their business practices.”
The paper emphasised the gap between corporate-wide awareness of the importance of biodiversity and the concrete steps taken by companies to translate their commitments into action.
Biodiversity is regarded as a critical issue by most companies, though to date only 11% have developed strategies aimed at achieving targets on nature.
“This gap suggests a lack of full awareness about the extent of their business impact on biodiversity and their reliance on ecosystem services,” the study said.
“Consequently, these companies may be underestimating the risks associated with harming nature and local communities, as well as the potential challenges arising if these vital ecosystem services become unavailable.”
ALIGNING WITH TNFD DISCLOSURES
The bank stressed the critical role of the Taskforce on Nature-related Financial Disclosures (TNFD) and the Science Based Targets initiative (SBTi) guidelines in steering corporate efforts to integrate biodiversity into their decision-making.
According to Danske Bank, fewer than 15% of the companies analysed in the paper assessed their impacts and dependencies on nature.
“Nordic companies still have considerable progress to make in aligning their operations and reporting with TNFD’s guidelines,” it said.
“Their strongest performance is in the area of governance, likely due to its overlap with existing sustainability and climate agendas, such as board oversight on sustainability issues.”
TNFD disclosures focus on four main pillars – governance, strategy, risk management, and metrics and targets.
In mid-January, 320 companies worldwide committed to adopting the TNFD recommendations within two years, the task force announced at the annual World Economic Forum meeting in Davos.
Eight are headquartered in Norway, eight in Sweden, seven in Finland, and three in Denmark.
“On average, Danish companies lag behind their Nordic counterparts in addressing biodiversity risks and opportunities,” the paper said. “Contrastingly, Norway emerges as the leader in biodiversity management quality.”
By Sergio Colombo – sergio@carbon-pulse.com
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