In December 2022, 196 governments reached a historic agreement during COP15 in Montreal. Considered “the nature equivalent of the Paris Agreement,” the Kunming-Montreal Global Biodiversity Framework calls to protect at least 30% of lands and waters by 2030, alongside restoring 30% of degraded ecosystems.1 Under Target 15 of the COP15 goal, all nations are specifically encouraged by the Kunming-Montreal framework to take legal or policy measures to enable businesses and financial institutions to monitor and disclose biodiversity-related risks, dependencies, and impacts.
Beyond these important goals, companies must still comply with existing regulations on nature reporting. Starting in 2024, the EU’s Corporate Sustainability Reporting Directive will require companies in sectors with heavy reliance on natural resources to report nature-related impacts on and risks for biodiversity and ecosystems.2 France’s 2019 Law on Climate and Energy similarly requires financial institutions to disclose across both biodiversity and climate, including risks, strategy to reduce impacts, and targets and metrics aligned with international biodiversity goals.
While these policies will drive greater corporate action toward biodiversity conservation (like the Paris Agreement did for climate action), few companies to date have been able to measure and act on nature. There is a significant need for companies to start treating climate and nature as integrated issues and consider strategies to tackle nature and climate jointly.
There are many ways in which the planet serves as a life support system for humans. Nature serves as a key ingredient for drug discovery, with most (>70%) anti-cancer drugs inspired by nature.3 Additionally, indigenous communities around the world rely heavily on traditional and locally sourced medicines to treat illnesses effectively and affordably. For example, the bark of the Prunus africana tree, native to Africa, is used to treat benign prostatic hyperplasia, and traditional Chinese medicine increasingly cultivates herbal resources that were once wild and abundant. Water is also a crucial resource within drug manufacturing, used as both solvents and for cleaning and cooling processes. Responsible companies should heavily consider biodiversity preservation in their sustainability strategies, and metrics beyond carbon need to be defined, quantified, and tracked.
Given the new imperative to look beyond climate risk and decarbonization to a broader array of environmental objectives, the following summarizes the key steps, corresponding self-assessment tools, and third-party rankings that can guide healthcare companies, along with others, to measure and act on nature-related impacts, risks, and opportunities.
Examples of current and emerging self-assessment frameworks and tools
ESG rating agencies are also increasing their focus on nature-related disclosures. For example, the Global Reporting Initiative has proposed to update its biodiversity standards, which will include disclosure requirements on biodiversity impacts throughout the supply chain (and priority areas), drivers of biodiversity loss, biodiversity-related human rights impacts, and location-specific data where impacts take place.4 The public comment for the draft is now closed as of February 28, 2023, and the revised standard is expected to release in late 2023. The International Sustainability Standards Board expects to weave TNFD and other nature standards and disclosures into forthcoming investor guidance.5 Moreover, CDP (formerly the Carbon Disclosure Project) has piloted biodiversity questions in the Climate Change Questionnaire since 20226 and are seeing an increased number of companies disclosing on water and forest.
Businesses that act now to simultaneously protect natural resources and our climate will not only comply with growing regulatory and investor pressures but will also benefit society, the environment, and their own financial bottom lines. By measuring and acting on comprehensive, nature-focused targets, companies can stay ahead of regulations, ensure long-term supply chain resiliency, unlock opportunities to collaborate with local stakeholders, and attract and retain investors, customers, and employees.
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