By Sebastian Leape, CEO of Natcap

In recent years, corporate boards and C-suites have invested heavily to understand, measure, and act on climate risks and opportunities. From Amazon to Zara, companies across the spectrum have embraced frameworks like the Task Force on Climate-related Financial Disclosures (TCFD), and used these as springboards to integrate climate into their business and investment strategies. However, it’s becoming increasingly clear that climate is only one piece of an interconnected planetary system. The climate challenge cannot be solved without harnessing nature, and as our true dependencies and risks on nature are more widely appreciated, investors and regulators’ expectations are rising, and the time for corporate action is now.

At the United Nations COP15 conference in 2022, nearly 190 governments committed to ambitious biodiversity targets for 2030. Building on this momentum, the release of the Taskforce on Nature-related Financial Disclosures (TNFD) framework last year provided a much-needed guide for companies to assess, report, and act on nature-related risks. In early 2024 the Corporate Sustainability Reporting Directive (CSRD) came into effect in Europe mandating thousands of companies to start measuring and reporting on water, pollution, and biodiversity for the first time. The CSRD suggests using the TNFD’s own approach for doing so and sends a clear message to corporates: the era of integrating nature into your business and investment decisions is upon us.

There was, and remains, scepticism. How could companies, already stretched by the demands of the climate agenda, take on the complexities of nature, too? Yet, less than a year after the TNFD framework’s launch, over 400 companies have officially signalled their intention to adopt the framework and thousands more have started work towards CSRD disclosures. Among these, Orsted and Cellnex or CDL (City Developments) have published reports that demonstrate what is possible when companies approach nature with the same rigour as they have climate and start to incorporate both climate and nature considerations into their strategies.

Stakeholders are sending a clear message that engaging on the nature agenda is expected, not optional. The question now is how can business integrate this work as effectively as possible into the work already done on climate change. Net zero cannot be achieved without protecting nature, and climate change remains one of the primary drivers of nature loss. Japan’s leading agricultural bank, The Norinchukin Bank, was one of the first to publish an integrated climate and nature strategy which underlines the interconnectedness of the two topics. Such examples illustrate that the integration of nature into corporate sustainability reporting is not just feasible – it’s already happening.

Barriers to Greater Uptake

Significant frustrations remain. The most pressing issue is that many early nature reports are too generic to be decision-useful. The tools currently available often rely on high-level industry averages, meaning that companies within the same sector may receive identical, generic insights whereas in reality they are operating in very different ecosystems. But securing the location data of assets to drive these enhanced insights can also prove a challenge, especially when looking at their supply chain. This becomes even harder for companies with dynamic supply chains – like in the food and beverage sector – where suppliers change on an annual or even monthly basis.

Moreover, the costs associated with selecting and aggregating relevant data are still high. Unlike climate, nature cannot be measured using a single data point. Instead, it can be analysed through a set of metrics ranging from soil health, to biodiversity intactness, to the connectivity of natural lands. Choosing the most appropriate and relevant one is a task that demands technical expertise – a resource that many companies may not have. The challenge is further compounded when it comes to measuring supply chains. For instance, a global fashion company may find it relatively straightforward to report on water usage or discharge in its direct operations, but much harder to assess that same metric in its supply chain.

A New Wave of Technology Solutions

The good news is that a new wave of technology solutions is emerging, helping to address these barriers. On the ground, organisations like SEED, the Natural History Museum, and Vizzuality are building ever more detailed species-level biodiversity data which accounts for changes over time. This allows us to increase the accuracy of our nature measurements by including elements that were never previously accessible – such as biodiversity in the soil.

In the atmosphere, the proliferation of Earth observation satellites has revolutionised data collection at a global scale. Companies like Google are leveraging this data to build sophisticated land cover maps, a critical input for measuring nature-related risks across vast areas. These tools are enabling companies to increase the coverage of data to a global scale.

Simultaneously, innovative startups are developing software that bring together these data sources and turn them into tailored insights specific to a company’s business activities and locations. New models and aggregation methodologies means companies can now get increasingly meaningful insights with even the most limited inputs on location of their operations or supply chain. These platforms are increasingly automating the technical work of metric selection and data aggregation, offering dynamic access to continuously updated data. This not only reduces costs but ensures that companies can build a historical record of their nature-related impacts, enhancing comparability over time which is critical to measure progress against targets.

Conclusion

One year on from the launch of the TNFD framework, the data and technology to measure, report and act on nature exists already and is improving by the day. The message from stakeholders is clear: embedding nature into decision making is becoming an expectation not an option. The time to act is now. Whilst nature may be able to wait, business, economies, and societies definitely cannot.