In conjunction with COP15, December has seen a flurry of developments to the biodiversity accounting, disclosure and regulation landscape, internationally.
6th December: Global Reporting Initiative releases updated biodiversity standard
The Global Reporting Initiative (GRI) have released their updated 304 Biodiversity reporting standard, which companies can use to guide their disclosures on biodiversity impact and management strategies. Notable updates include reporting on upstream and downstream supply chain impacts, biodiversity-related human rights impacts, and greater transparency on where biodiversity impacts are actually taking place.
The GRI is a hugely influential body and their continued development of the 304 standard will influence various bodies, including the Taskforce on Nature-related Financial Disclosures (TNDF), whom they are actively assisting in the development of their own standard. Using an internationally recognised framework ensures that disclosures follow best-practise and can easily be understood and compared to other companies by stakeholders.
6th December: EU agrees on deforestation-free import legislation
The EU has announced that companies importing goods into Europe must ensure and declare that they are not the product of deforestation. The supply chain due diligence legislation is expected to enter into from mid-2023, with phased implementation for different sized enterprises. The legislation covers seven commodities and their derivatives which are linked to deforestation around the world, including soy, palm oil, coffee, cocoa, and importantly for Australia, cattle and timber. Australian exports of beef and timber to the EU were valued at $137 and $34 million AUD respectively, in 2020-21, and the local agriculture industry are having heated discussions over the implications of the incoming laws. Given the important role that forests play in sequestering atmospheric carbon, stabilising soils and protecting biodiversity, their protection through consumer-based legislation must surely be celebrated.
14th December: ISSB will include biodiversity in standards
The International Sustainability Standards Board (ISSB) has announced that companies will need to include their biodiversity impact when reporting to the incoming International Financial Reporting Standard – Climate-related Disclosures Standard (IFRS S2).
Leveraging the focus of the global media and the attendees gathered at COP15, the ISSB announced from Montreal that, encouraged by feedback from both the scientific community and investors, IFRS 2 will formally articulate the link between biodiversity, and financial value creation. Chair of the ISSB Emanuel Faber said that:
“…financial value creation is affected by the proper preservation, development and regeneration of all the resources and relationships (including natural and human) needed for a company to achieve its goals.”
Preservation and regeneration are powerful terms and certainly not ones that have traditionally been associated with finance, making their inclusion a landmark in the new era of re-defining materiality. The business community must now build capabilities in biodiversity impact assessment, just as they have done for carbon.
To find out how Zooss Consulting can support your organisation to integrate environmental sustainability reporting and planning into your traditional business planning process, contact us.
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