Integrating Nature into your Business Strategy – Common Frameworks and where to Start
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By now, nature as a topic for business no longer needs an introduction. With environmental risks dominating the long-term global risk rankings published every year by the World Economic Forum, nature loss truly is everyone’s business. But as the global response for corporate nature accountability develops, the proliferation of frameworks, expectations and tools can be confusing.
Here we shed light on what the expectations on business are, how we see them developing into the future and where and you can make a start on integrating nature into your business.
Integrating Nature into your Business – Corporate Expectations
At the global level, the ultimate goal spelled out in the ‘Paris Agreement’ equivalent for Nature, the Kunming-Montreal Global Biodiversity Framework (GBF) adopted under the auspices of the Convention on Global Biodiversity (CBD), is to halt and reverse biodiversity loss by 2030.
This highest-order societal goal is now being passed down to business through investor, consumer and stakeholder expectations, standard setters, new regulations and re-interpretation and evolution of our existing regulatory frameworks. The last-mentioned source of expectation on business is of particular interest to Australian companies, where unlike Europe, we do not (yet!) have mandatory reporting requirements for nature.
A legal opinion by Sebastian Hartford-Davis and Zoe Bush, published in October 2023 and commissioned by Commonwealth Climate and Law Initiative and Pollination Law, concludes in a fashion similar to an opinion released in 2016 on climate-related obligations of Company Directors, that nature is a material topic for the Board’s consideration, and depending on the circumstances, for disclosure. A similar duty was found to exist for company directors in the UK.
The emerging web of regulation, policies and evolutionary development of our legal system can be distilled down to the following expectations on business to:
- Understand your organisation’s relationship with nature by assessing and evaluating dependencies, impacts, risks and opportunities (DIROs);
- Take action to contribute to halting and reversing nature loss by setting robust and credible targets and implementing action to achieve those targets;
- Make disclosures on your organisation’s relationship with nature, approach to responding to DIROs and actions taken.
Integrating Nature into your Business – Frameworks and Initiatives to Consider
Various frameworks, initiatives and supporting tools have emerged to support the task of integrating nature into your business.
Amongst this influx, it can be difficult to identify which of these frameworks is relevant to your organisation and at which point in time in your nature-integration journey.
Select nature frameworks and initiatives are explored below by overarching topic
Sustainability Reporting Standards and Nature
These standards are relevant to organisations that have committed to voluntary sustainability reporting and can support organisations in understanding how their operations lead to nature impacts and how to manage them.
GRI, ISSB and CDP
Various sustainability reporting standard setting organisations have in place, or are developing, nature-related disclosure standards.
The International Sustainability Standards Board (ISSB), which operates disclosure standards on climate risk, has embarked on research to build on the recommendations for nature via the Taskforce on Nature-related Financial Disclosures (TNFD).
Similarly, GRI released a major revision to its existing Biodiversity Standard in early 2024, which brings this standard in alignment with the goals and targets of the GBF.
Finally, the Carbon Disclosure Project (CDP) has broadened its remit since 2021 to include nature, creating a framework for organisations to make nature-related disclosures.
Nature Assessment and Disclosure Frameworks
These provide a framework for organisations to identify, assess, manage and report on nature dependencies, impacts, risks and opportunities (DIROs) and are strong options for integrating nature into your business.
TNFD – The Taskforce on Nature-related Financial Disclosures (TNFD)
Is a global initiative that supports organisations in understanding, managing and making disclosures on their nature-related DIROs. TNFD is ultimately a disclosure framework but through guidance materials, this initiative also takes organisations on a systematic journey to assess, report, and act on nature.
PBAF – The Partnership for Biodiversity Accounting Financials (PBAF)
PBAF enables financial institutions to assess and disclose impacts and dependencies on the biodiversity of loans and investments.
Nature Measurement and Target Setting
In addition to the above disclosure frameworks, standards have also emerged that can help organisations identify their natural assets and set appropriate targets for restoration and/or protection.
A selection of the most prominent nature standards/frameworks
Natural Capital Accounting Framework
We have previously provided detailed guidance on the concept of natural capital accounting and the sectors to which it is most relevant. For current purposes, the key defining characteristic of natural capital accounting is that it can be seen as a logical extension of management and financial accounts. That is, it provides a way for organisations to integrate natural capital assets into the language of financial accounting and disclosure.
Natural capital accounting makes sense for organisations that own and control natural capital assets and provides a means of understanding and reporting on the state of those assets and services they provide in familiar, financial terms. Applying natural capital accounting can support organisations to meet disclosure expectations, and form the baseline for taking credible action by providing a means to understand an organisation’s relationship with natural assets.
Accounting for Nature
The Accounting for Nature (AfN) framework is an Australian-based framework established to provide a transparent, affordable, verifiable and certifiable environmental accounting framework. AfN have published various methods that enable the robust measurement of environmental condition that can be used to demonstrate whether land management actions and/or impact is improving or degrading natural capital.
The framework is typically used by farmers, indigenous land managers, private conservation organisations, businesses, impact investors, governments and regional natural resource management organisations. Over the past decade, the framework has been tried and tested through a collaborative effort by around 200 world-leading experts. Regulatory frameworks such as Accounting for Nature can help us quantify nature to specific and verifiable standards and offer a new way of protecting nature while promoting economic growth.
Science-Based Targets for Nature
The Science Based Targets initiative is a global initiative that has developed a means for businesses to align their individual sustainability actions with globally agreed environmental goals. Similar to the SBT initiative focused on climate action, Science Based Targets for Network (SBTN) focuses on nature and organisations using the framework are guided to set nature targets that are ‘measurable, actionable, and time-bound’ and are based on the best available science, allowing organisations to ‘align with Earth’s limits and societal sustainability goals’.
Investor Action
Investors set expectations and provide guidance for financial institutions to guide investment decisions that impact on nature by developing benchmark indicators and fleshing out how investors can engage corporates on nature loss. This guidance can be insightful for corporates that may seek investment.
Nature Action 100 and Finance of Biodiversity Pledge
Frameworks for Investor action that provide guidance for financial institutions to guide investment decisions that impact on nature. These can be relevant both to institutional investors as they look to integrate nature into their investment expectations but also for investee organisations that are looking to access finance, as the indicators developed by the groups become more mainstream in investment decision-making.
Guidance, Strategy and Reputational Initiatives
Finally, various coalitions of organisations from cross-cutting sectors have emerged that seek to support a nature positive transition through guidance material on nature strategy development and reputational initiatives. Two of the most prominent initiatives are:
Business for Nature
Along with the World Business Council for Sustainable Development and other initiatives, Business for Nature (BfN) coalition provides guidance on the development of credible and effective nature strategies that can ‘form a roadmap for how organisations will contribute to a nature-positive world.’ BfN provides an added endorsement option, for organisations to have their strategies assessed and endorsed by the coalition.
World Business Council for Sustainable Development
The World Business Council for Sustainable Development (WBCSD) plays a prominent role in driving change for a sustainable future, including by supporting a nature positive transition. Their nature action work provides support through guidance for business on credible actions and setting expectations for member organisations to take action.
Integrating Nature into your Business – Where to start?
So, where do you start along your journey to integrating nature into your business and how do you decide which framework to align with?
We recommend starting with two key actions:
1. Gaining a baseline understanding of your organisation’s interface and relationship with nature.
This is core to responding to any of the expectations under the various frameworks and initiatives.
At the very early stages of this journey, our recommendation is not to get too hung up on any particular framework or program of action but to draw on tools that can shed light in an overarching way, on the ways in which your organisation interacts with nature. If there is expertise within your business, this initial step can often be delivered in-house, or at least preparatory work conducted, before involving experts.
A key task to consider is to understand your organisation’s ecological footprint by mapping out your organisation’s key activities and upstream and downstream value chain activities and key geographies of activities that might have particular dependencies or impacts on nature.
Internal teams are also well-placed to start collating available data on those activities, including the value to the business.
2. Working with internal stakeholders to determine priorities, goals to take into a more detailed assessment of your organisation’s nature interface.
When integrating nature into your business, this step enables internal nature champions to gain clarity on how deep and fast to move with a subsequent detailed assessment of your organisation’s DIROs, and which frameworks might be most relevant to your organisation.
Internal engagement will likely happen in parallel with the initial scan of your organisation’s nature interface as data is gathered from within the business. But this step goes further and also involves gaining clarity from management on priorities and goals and creating buy-in to respond to the nature crisis.
Understanding the internal capacity (human and financial), skills, and priorities of the organisation can help to crystallise the pathway for more detailed assessment and suitable framework/s for alignment.
From here, the working theory of your organisation’s relationship with nature can serve as the starting point for a more detailed assessment, focused on potentially material areas of your operation and value chain. This will ultimately inform how your organisation responds to nature-related issues and/or embarks on a journey to undertake nature-based solutions as a core part of a nature strategy.
Interested in learning more about integrating nature into your business?
We support companies in integrating nature into their business – whether that is measuring their natural capital or reporting under the Natural Capital frameworks. Contact us for guidance today we’d love to help.