Nature risk and the emerging reporting framework

Ob River Flood June 2015 Aerial View of same houses in vicinity of Nizhnevartovsk, Tyumen region, Russia. Aerial view of the residential area of the suburb of Nizhnevartovsk during the flood of 2015.

Nature offers both risks and opportunities for businesses.

In 2020, research by the World Economic Forum (WEF) indicated that more than half of global GDP, US$44 trillion of economic value generation, is moderately or highly dependent on nature and its services. Yet threats to nature are accelerating, creating new risks for organizations.

There is a significant international will to counter nature loss. The UN Convention on Biological Diversity (CBD) Secretariat launched in 2021 a first draft of a new Global Framework for managing nature by 2030. Other global alliances, such as the Science Based Targets Network (SBTN) and Earth Commission, identify tipping points, science-based targets, and guidance to predict and transform the relationship between companies, societies, and nature. Moreover, organizations such as the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) have collaborated with central banks to mobilize the finance needed for this transition to a nature-positive economy.

While much of this is guidance and best practices at the current time, we can expect to see more regulation, especially following the UN Nature Rescue Plan that targets 30% of the Earth’s surface to become protected areas by 2030. Increased regulation may cause businesses to pivot their operations, potentially resulting in additional compliance costs, loss of revenue, and stranded assets. Amid this uncertainty, businesses should think long term about how they look to their entire value chain and their interfaces with nature, preempting shifts in consumer behavior and regulatory frameworks.

Looking up Green forest. Trees with green Leaves, blue sky and sun light. Bottom view background

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