September 29 – Wall Street, the bastion of bulls and bears, would seem to be embracing bees and biodiversity.

In an effort to stop mounting nature losses, the world’s largest companies and financial institutions have produced a global reporting framework to hold themselves and other companies to account for their damaging Impacts on biodiversity and other natural resources that underpin the global economy.

The corporate disclosure recommendations, developed by the Taskforce on Nature-related Financial Disclosures (TNFD), were unveiled at New York’s Climate Week, and a week later in London, amid a sea of expectations and anxiety. Governments and a growing number of businesses are scrambling to halt escalating deforestation and biodiversity declines that also contribute to climate change.

The voluntary guidance – close on the heels of a landmark global pact aimed at halting and reversing biodiversity losses by 2030 – calls for companies to assess and disclose nature-related risks, impacts and dependencies across their value chains. The Global Biodiversity Framework, adopted by nearly 200 governments in December, aims to conserve 30% of the world’s lands and oceans in the next seven years.

David Craig, co-chair of the Taskforce on Nature-related Financial Disclosures, at the launch of the new reporting standard in New York on 18 September, 2023 Acquire Licensing Rights

“We need to change the relationship between business, finance and nature,” the TNFD’s co-chair David Craig said, in announcing the guidance and warning of “a dead planet” if tangible action isn’t taken. “This is a crisis of our own making.”

The backdrop for the launch was the New York Stock Exchange, which was adorned with billboard-sized images of pollinating bees for the occasion.

“If we acknowledge that ‘business as usual’ is no longer an option and that nature needs to be brought into the heart of business and financial decision making, then we need a new mascot,” TNFD Executive Director Tony Goldner told a packed audience. “At the TNFD, we have embraced the bee, an essential provider of prosperity through its pollination services.”

The symbolism was spot-on. One of every three bites of food eaten worldwide depends on pollinators, especially bees. And with annual hive losses falling steadily, both in the U.S. and globally in recent years, farmers and agriculture companies are reeling from declining crop yields.

The broader trends are just as alarming. A 2022 report by the World Wide Fund for Nature showed an average decline of 69% in species populations since 1970, with the biggest losses being in forests and other ecosystems, which provide immense value to industries such as food and agriculture, consumer goods and pharmaceuticals.

More than half of global GDP – an estimated $44 trillion of economic value, according to the World Economic Forum – is generated in industries that are moderately or highly dependent on nature.

The TNFD, comprised of representatives from 40 leading companies and financial firms, developed the guidance at lightning speed over the past two years, with extensive input from the businesses, policymakers, scientists, nonprofit organizations and civil society.

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The recommendations are modeled after climate disclosure guidelines developed by a separate task force in 2017, and are consistent with global sustainability standards of the International Sustainability Standards Board (ISSB), as well as the impact materiality approach used by the Global Reporting Initiative. They also align with Target 15 reporting requirements under the Global Biodiversity Framework approved last December in Montreal.

Like the climate disclosure guidelines, which are now widely used by global businesses, nature-focused reporting is seen as a key first step in marshaling business action away from nature-damaging activities towards nature-positive solutions. For example, as investors are made aware of nature-related risks a company is facing, they may choose to support another company that is supporting nature-positive solutions such as regenerative agriculture.

But how much and how quickly can voluntary nature-based disclosure deliver?

The most immediate question is business interest – or the lack of it. Only 5% of the nearly 400 companies analyzed last year by the World Benchmarking Alliance understood their impact on nature; fewer than 1% knew how much their operations depended on nature.

But that momentum may be starting to shift. More than 200 companies and financial firms pilot tested the TNFD recommendations before the launch, and more than 70% of 240 businesses surveyed by the TNFD this summer said they “were likely” to start using the disclosure recommendations by 2025 or earlier.

“For a lot of companies, it will be pretty challenging to get their heads wrapped around nature reporting, but many leading companies are already working really hard on this,” said Diane Holdorf, executive vice president at the World Business Council for Sustainable Development (WBCSD), which has worked with dozens of companies on biodiversity and nature issues over the past year.

“We’re seeing a huge appetite,” added Dr. Kat Bruce, a tropical ecologist and founder director at NatureMetrics, a nature data gathering company, which is already working with hundreds of companies, including consumer giant Nestle, and mining firm Anglo American.

But the big challenge for reporting on nature is a lack of standardized metrics.

While climate disclosure revolves around a shared standard for measuring and reducing carbon emissions, the Greenhouse Gas Protocol, and a single metric of CO2 equivalent per ton, nature reporting can cover a multitude of topics that have no commonly used measurement standards.

More than 2,000 nature-related metrics are in use today, according to TNFD.

But these have been parsed down to 15 core metrics that will help investors and companies compare the performance of companies across industries and sectors. The TNFD also published a discussion paper on a bigger suite of additional metrics that will apply to specific sectors.

“Metrics has been the most complex task of the Task Force. We don’t have the benefit of the GHG Protocol,” Goldner said.

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NatureMetrics is trying to help close this gap. The nine-year-old company delivers comprehensive nature data and intelligence that can be generated at scale using environmental DNA (eDNA) technology. The eDNA technology can identify hundreds of species from different taxonomic groups in a single sample.

Bruce said the company is helping mining company Anglo American identify potential biodiversity risks, such as threatened or endangered species, that may be impacted by mining activities.

On the regenerative agriculture front, the company is working with Nestlé Purina Pet Care to use seaweed as a potential bio stimulant to improve soil health and plant performance.

As these and other projects show measurable benefits, standardizing nature metrics – and giving them a financial value – will be more possible, Bruce said.

Another Nestle company, Nespresso, has committed to use regenerative agriculture in its entire green coffee supply chain by 2030, using Rainforest Alliance’s regenerative coffee scorecard to evaluate producer performance against key metrics.

The company has also developed, with the Cornell Lab of Ornithology and other partners, the Biodiversity Progress Index, a metric that quantifies “the degree of nature in a farm/cluster/region”, through the completeness of the bird species that are found there.

David Croft, global head of sustainability at health and hygiene company Reckitt Benckiser Group, was banging the drum for the TNFDs at both the New York and London launches.

“This is about core business. Data is complex and metrics are complex, but business is good at making sense of complex issues and making them actionable.”

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He said his company, which makes Durex condoms, had partnered with Nature-based Insetting and on the ground with Earthworm Foundation to measure the impact of the latex it sources from rubber plantations in Thailand on forests and species.

He said the measurements would be used to introduce changes to reduce its impact “and to do so in a way that benefits nature, climate and communities. The TNFD framework allows you to do all those three things together rather than sequentially, as we’ve done them in the past. And that’s critical if we are to make these changes sustainable.”

The Rainforest Action Network, however, criticized the TNDF process for being too business-friendly and not including enough input or recognition of indigenous communities which protect as much as 80% of the world’s biodiversity in forests, grasslands and marine environments.

“The process has focused on empowering global corporations, including members of its corporate taskforce, who are failing to act on their own environmental or human rights abuses,” said Shona Hawkes, a RAN advisor on the TNFD. “(The guidance) is full of loopholes that can allow rampant greenwashing” by benefiting corporations while sidelining frontline communities.

Hawkes took specific aim at the materiality provisions which, she says, allow companies to pick and choose what is “material” and worthy of being disclosed.

TNFD’s Goldner disagreed with that claim, pointing out that materiality has different legal interpretations in different parts of the world. While European companies are more obliged to use disclosures focused on financial and broader societal impacts, U.S. and Australian materiality disclosure is more limited to financial performance only.

“It’s not our job to determine materiality,” Goldner said, noting that TNFD makes recommendations, not standards.

Ultimately, as he told business leaders at the NYSE launch, it’s about getting broad buy-in on TNFDs and fine-tuning the guidance, in collaboration with stakeholders, in the years ahead.

Additional reporting from London by Terry Slavin

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Ethical Corporation Magazine, a part of Reuters Professional, is owned by Thomson Reuters and operates independently of Reuters News.