Biodiversity and Nature-related Disclosures

BIODIVERSITY AND NATURE-RELATED DISCLOSURES

5. CONCLUSIONS

A World Economic Forum (WEF) report found that nature-positive solutions “will create US$10.1 trillion in business opportunities, and 395 million jobs through key sector transitions”. 17 In fact, investing in ecosystem restoration creates on average 3.7 times as many jobs as oil and gas production investments. However, biodiversity and nature-related projects and investments have historically been overlooked by private sector and capital markets. Similarly, risks brought by biodiversity loss and ecosystem alterations have typically been ignored by businesses and regulators. It took a few years to get traction on the global efforts to assess, report, and disclose climate-related risks when climate change became mainstream. Thus, it will most likely take a few years too for the efforts to halt biodiversity loss to gain full force. Nonetheless, biodiversity is finally on the private sector agenda — at the top levels —and even more so, now that the link between climate change and biodiversity is better understood, we can expect financing to flow towards net-positive endeavors. Peter Harrison, CEO of Schroders, points out that we can expect a significant amount of resources flow into natural capital “as people figure out that nature is a very large proportion of the answer to decarbonization. There is no route to net-zero without biodiversity.” 18 Here, regulations and standardization of disclosure frameworks can go a long way. In that sense, voluntary initiatives like the TNFD for companies and investors, and the GBF for governments, can pave the way for future mandatory disclosure and proper management of risks tied to nature degradation and biodiversity loss.

17 Ibid. 18 Agnew, H., “Biodiversity quickly rises up the ESG investing agenda”. FT (2022): Link.

10

February 2023