On Sunday 5 June, the United Nations Environment Programme (UNEP) marked World Environment Day and 50 years since the 1972 United Nations Conference on the Human Environment in Stockholm. World Environment Day provides the multifaceted environmental crises we collectively face with the global platform needed to tackle them, notably through events showcasing green innovations. Yet, its core objective is to propel conversations around climate change, pollution, and nature beyond select audiences behind closed doors – or even widespread engagement around landmark dates and events – and to make the environment the everyday preoccupation of businesses, governments, civil society and everyone in between.
Hosted this year by Sweden, the World Environment Day theme calls for us to live sustainably “in harmony with nature” through systems-change transformation. 2022’s core slogan of “Only One Earth” revives that of the 1972 Stockholm conference, and suggests two stark messages: firstly, while we still only have one planetary home, our progress in stewarding the environment is not enough to make this slogan any less relevant, or urgent. Second, the theme’s broad focus on spotlighting not only actions to protect our climate, but also nature and pollution (dubbed the ‘triple planetary crisis’ by the UN) reflects a growing trend among practitioners and disclosure frameworks that these mega-crises cannot be considered in isolation.
The connection between biodiversity loss and climate change is well-established. Increasingly popular ‘nature-based’ solutions describe actions that restore natural habitats, landscapes, wetlands and seascapes while storing carbon more readily than the complex carbon-capture technologies under development, while also bringing multiple co-benefits to nature and society. Similarly, aside from the well-known danger to wildlife and ecosystems posed by plastic and chemical pollution (with images of sea life caught in plastic nets and birds trapped in oil spills coming to mind), plastic waste itself also contributes directly and indirectly to greenhouse gas emissions. Climate change also exacerbates ground-level air pollution, as higher temperatures increase levels of the harmful pollutant ozone; particulates prevent sunlight from being reflected at the poles and droughts lead to soil erosion contributing to dust storms. While the pressing need for global society to achieve Net Zero has dominated the environmental conversation in recent years, awareness is growing, across high-profile global events such as COP26, that climate change cannot be solved by focusing on emissions alone. A holistic approach to interlinking environmental risks is needed to preserve a viable future planet.
What does growing recognition of the “triple planetary crisis” mean for businesses?
As awareness of the interdependence of these environmental issues grows, corporate disclosure frameworks are evolving to become more diverse as well. While CDP (formerly the Carbon Disclosure Project) has generated most engagement with its Climate Change corporate questionnaire in the past, it is actively now working to expand the scope of corporate disclosures, by adding new biodiversity questions to its 2022 Climate questionnaire, and broadening the scope of its questions to cover planetary boundaries, including oceans, land use, food and waste. Additionally, following the success of the highly influential TCFD (Taskforce on Climate-Related Disclosures), the Taskforce on Nature-Related Financial Disclosures (TNFD) was launched on 4 June 2021, the eve of World Environment Day, and endorsed by the G7 Finance Ministers to spring businesses into action. Currently in its ‘beta’ phase, the TNFD invites companies to assess their value chain impacts on nature, along with nature-based risks and opportunities. It will refine its framework throughout 2022 before launching it in 2023.
Beyond corporate disclosures, policymakers and regulators are waking businesses up to the importance of biodiversity to their future success (and viability), corporate and social responsibility (CSR) and reputations.
Launched on 4 June 2021, the eve of World Environment Day, and endorsed by the G7 Finance Ministers, the TNFD replicates the approach of the highly influential TCFD (Taskforce on Climate-Related Disclosures) to spring businesses into action. The CDP, a major environmental public disclosure platform, is similarly adapting to reflect the importance of nature alongside climate by adding new biodiversity questions to its 2022 Climate Change questionnaire (one of an arsenal of questionnaires: climate, forests, water security and supply chains).
The UN Convention on Biological Diversity (CBD) is also developing a Global Biodiversity Framework with a view to reaching 21 biodiversity targets by 2030. Other notable regulatory advances include plans to incorporate biodiversity risk into the EU Taxonomy, the European Commission’s biodiversity strategy for 2030 (as part of the European Green Deal) and the UK’s 2021 Environment Act (although not yet passed into law).
Read more insights from SLR on emerging nature-related disclosure frameworks here.
Why should businesses act now?
Aside from increasing stakeholder expectations for companies to uphold the social contract to give back as well as extract, there is a strong business case for tackling biodiversity loss. As with climate risk, nature-related risks work both ways. Not only can organisations harm nature through their activities (e.g. deforestation in supply chains, the use of harmful chemicals in agriculture or improper waste disposal), nature-based risks can prove existential for some industries, notably mining, forestry and agriculture. Less obvious candidates such as financial and other professional services firms are not exempt and likewise face operational risks through their supply chains.
According to the World Economic Forum (WEF), over half of global economic output (USD$44 trillion) relies moderately to heavily on nature and UNEP similarly found that 13 of 18 sectors in FTSE 100 depend on nature-intensive production processes. In addition to such physical risks, stragglers are also vulnerable to ‘transition risks’, including (but not limited to) upcoming legislation and regulations that are likely to drive up operational costs associated with harmful activities, higher underwriting costs and divestment.
What can businesses do to start implementing holistic environmental strategies?
We are currently living far beyond nature’s means. In fact, human economic activities are using the equivalent of ‘1.6 Earths’, outstripping ecological limits, while 40% of the world’s population are affected by ecosystem degradation. While the introduction of systems-level thinking around climate change, nature and pollution to boardrooms marks an important step, issues beyond net-zero are poorly understood by comparison and action will likely be slow to take hold. As of yet, only a handful of companies have published biodiversity strategies with goals aligned to the Science Based Target Network.
Businesses who align themselves early by investing in internal governance and education on environmental goals beyond net-zero will be strongly positioned as regulatory and stakeholder demands become more acute over the coming years. As well as acquiring technical expertise on how to properly manage and monitor impacts on other important issues including biodiversity and pollution, and aligning themselves with emerging frameworks such as the TNFD, businesses will need to embed their environmental strategies throughout the core of their business operations.
The SLR Consulting Group is a member of the TNFD Forum and is a leader in specialist environmental services. SLR’s dedicated professionals, including 65 ecologists, specialist climate risk and Net Zero strategy teams, and Circular Economy & Waste specialists, are available to help you to prepare for CDP and TNFD submissions, develop a natural capital strategy and support you to understand your holistic environmental impacts.
 However, it is important to note that it is not always as simple as just planting trees. Companies who have sought to offset their emissions through the mass planting of monocultures have faced charges of greenwashing (overstating positive environmental impacts): https://www.bbc.co.uk/news/uk-wales-59220669.