Four in five companies are unprepared for reporting on their nature-related risks and dependencies under the recommendations from the Taskforce on Nature-related Financial Disclosures (TNFD) and the EU’s CSRD, analysis has suggested.
Biodiversity monitoring company NatureMetrics examined data from its Nature Maturity Assessment, which enables businesses to assess their alignment with the evolving regulation on corporate disclosures.
Presented during a webinar on Tuesday, the results showed that, out of 176 respondents, 84% ranked within the “learning” level, meaning they are not ready to comply with the emerging frameworks.
While 58% are not currently committed to any sort of nature-related disclosure, 54% of them are planning to report for the first time under the EU’s upcoming Corporate Sustainability Reporting Directive (CSRD).
Approximately 50,000 organisations subject to the CSRD will be required to start disclosing information about their environmental, social, and governance practices from 2025, using a set of 12 requirements under European Sustainability Reporting Standards (ESRS).
The ESRS standard on biodiversity and ecosystems prescribes metrics focusing on the hectares of sites owned, leased, or managed in or near biodiversity-sensitive areas that the company is negatively affecting.
“CSRD is very much the priority for a lot of organisations, especially the responders of this tool,” Amy Sellers, principal consultant at NatureMetrics, told the webinar.
“But we’ve also seen a real drive for organisations to understand how they go further and beyond, and also report to the likes of TNFD as well as other frameworks.”
BRIDGING THE GAP
Overall, only 15% of organisations have a nature-positive roadmap in place, and fewer than half of these also extend their plans to their supply chains.
“This emphasises the need to bridge the gap between the very high performers and those just starting their journey,” Sellers said.
The survey also showed that 44% and 56% of respondents do not collect any data on their business’ nature-related impacts and dependencies, respectively.
This gap is even higher when it comes to gathering such information from suppliers, reaching 84% for impacts and 93% for dependencies.
The panelists also stressed the need for disclosure frameworks to improve interoperability, in order to streamline corporate action.
“They should align, and they should actually make life a little bit easier, because they really are coming under the same umbrella,” said Pippa Howard, chief nature strategist at NatureMetrics.
Disclosure alignment is regarded as key to ensuring transparency as it affects comparability of biodiversity data, at a time when pressure is mounting on companies and financial institutions to disclose their nature risks.
A report published by the EU Business & Biodiversity Platform in April flagged the differences between the most prominent biodiversity disclosure initiatives, including GRI, ESRS, and the TNFD recommendations.
ESRS and the Global Reporting Initiative (GRI) have recently launched separate initiatives to map out their interoperability with the TNFD framework.
By Sergio Colombo – sergio@carbon-pulse.com
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