For years, the spotlight in corporate sustainability has been firmly fixed on climate change.

Carbon emissions, net-zero targets, and TCFD-aligned disclosures have dominated boardroom discussions and investor expectations.

But there's a new, equally critical, player emerging rapidly: nature.

Just as businesses have begun to understand and measure their climate impact, a deeper evolution is taking hold: our economies are inextricably linked to healthy, thriving ecosystems.

From the water that irrigates crops to the biodiversity that ensures pollination, businesses depend on nature for their very existence. And the loss of nature – biodiversity decline, deforestation, water scarcity, pollution – presents a colossal, yet often overlooked, financial and operational risk.

This growing awareness has given rise to a new frontier in corporate reporting: nature-related disclosures.

Why Nature is Stealing the Limelight

The shift is driven by a number of factors:

1. Mounting Financial Risk:

‍The World Economic Forum consistently ranks biodiversity loss and ecosystem collapse among the top global risks. Supply chain disruptions, increased operational costs, and even stranded assets are direct consequences of a degraded natural world. Investors are waking up to these "nature-related financial risks" and demanding transparency.

2. Evolving Regulations:

‍What starts as voluntary often becomes mandatory. Following the success of climate disclosure frameworks like TCFD, the Taskforce on Nature-related Financial Disclosures (TNFD) has emerged. This market-led initiative provides a comprehensive framework for companies to identify, assess, manage, and disclose their nature-related dependencies, impacts, risks, and opportunities. While currently voluntary, the signal it sends is clear: mandatory nature reporting is on the horizon, particularly with developments like the EU's European Sustainability Reporting Standards (ESRS) E4 specifically addressing biodiversity and ecosystems under the Corporate Sustainability Reporting Directive (CSRD).

3. Consumer and Stakeholder Pressure:

‍Consumers are increasingly conscious of the environmental footprint of the products and services they buy. NGOs, local communities, and even employees are demanding that companies go beyond just climate and demonstrate a genuine commitment to protecting and restoring nature.

4. The Climate-Nature Nexus:

It's becoming undeniable that climate change and nature loss are two sides of the same coin. Healthy ecosystems are vital carbon sinks, and climate change accelerates nature's degradation. A holistic approach is required, and reporting frameworks are reflecting this interconnectedness.

What Does "Nature Reporting" Entail?

Unlike carbon, which has a relatively clear metric (tonnes of CO2e), nature is complex, localized, and multi-faceted. This makes reporting a nuanced challenge. However, frameworks like TNFD and ESRS E4 provide guidance, typically focusing on:

• Governance: How is nature embedded in a company's leadership and decision-making?
• Strategy: How do nature-related impacts, risks, and opportunities shape the business model and strategic planning?
• Risk and Impact Management: What processes are in place to identify, assess, and manage nature-related issues across direct operations and the value chain? This includes dependencies on ecosystem services (e.g., water, pollination) and impacts (e.g., land use change, pollution).
• Metrics and Targets: What quantifiable data and targets are being used to assess and manage nature-related issues? This could involve metrics related to land use, water quality, habitat protection, or species diversity.

Crucially, nature reporting often emphasizes double materiality, meaning companies must consider not only how their operations impact nature, but also how the decline of nature impacts their business.

Embracing the Future: What Companies Need to Do

For companies still grappling with climate reporting, the emergence of nature disclosures might feel like another hurdle.

However, it's a vital evolution that presents significant opportunities:

• Understand Your Footprint: The first step is to assess your company's dependencies and impacts on nature across your entire value chain. Where do you rely on natural resources? Where do your operations or supply chain activities affect biodiversity or ecosystems?
• Leverage Existing Efforts: Many companies already have initiatives related to water management, sustainable sourcing, or land stewardship. These can be foundational to nature reporting.
• Develop a Strategy: Move beyond simple compliance to integrate nature into your core business strategy. This can drive innovation, build resilience, and unlock new value.
• Start Small, Learn, and Scale: Nature reporting is a journey. Don't wait for perfection. Start by identifying material risks and opportunities, collect the data you can, and continuously improve your disclosures.
• Collaborate: Engage with stakeholders, industry peers, and experts. The complexity of nature requires collective action and shared learning.

The "new kid on the block," nature reporting, isn't just about ticking boxes. It's about fundamentally rethinking our relationship with the natural world and recognizing that a thriving planet is the ultimate foundation for a thriving business.

Those who embrace this reality now will be the resilient, leading companies of tomorrow.

Navigating the complexities of nature-related reporting can be challenging, but you don't have to go it alone. At Generate Zero, we specialize in helping businesses understand, measure, and report on their environmental impacts – from carbon to nature.

We can support you in identifying your nature-related dependencies and impacts, developing robust strategies, and streamlining your disclosure processes to ensure you're prepared for the future of sustainable business.

Contact us today to find out more.

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