Think of nature as the next step in your climate journey. Or, more appropriately, think of climate as the first step of your nature journey. If you are already measuring climate risk or GHG emissions, or setting climate targets, then you have a strong foundation for nature. Furthermore, you may already be working on nature without yet naming it, because nature includes water, waste, and circular business practices.

However there are a few important ways in which nature differs from climate.

Important ways in which nature differs from climate

1. Climate is one issue, while nature is many issues.

Climate is one component in the broad scope of nature, which also includes water and natural resource use, ecosystem use, pollution emissions, and invasive species. See Table 1 for the full suite of "Ecosystem Pressures" – corporate drivers of nature change. Consequently, nature cannot be summed up in a single impact metric like CO2e for climate. Instead, as nature disclosures evolve, the frameworks will converge on a suite of metrics.

2. Nature is local and non-fungible.

While GHG emissions produced anywhere create a global net warming effect, the other Ecosystem Pressures create local effects. Thus, restoring an ecosystem in one location will not offset the destruction of another. So while companies will need to invest in restoration for damages done in the past, restoration is not a solution for future damages – companies must transform their business operations to minimize environmental impacts.

3. There are no global models for nature.

For climate, there is global scientific consensus around a suite of models that predict climate change under different policy scenarios – the IPCC models. There are, for the most part, no globally recognized models for nature, with the exception of water stress (WRI Aqueduct). Thus, a different analytical approach is required for nature.

Ecosystem Pressures

With these differences in mind, we turn to how nature risk analysis is similar – and in some ways easier – than climate risk analysis.

1. The TNFD framework mirrors the TCFD framework.

The TNFD (Taskforce on Nature-related Financial Disclosures) leverages the framework from the TCFD (Taskforce on Climate-related Financial Disclosures) as a starting point, so many of the governance requirements are the same. Thus, companies can build upon work already done, whereas most companies had to start from scratch with climate risk.

2. There is strong alignment across nature frameworks.

Unlike how climate disclosures requirements were developed, there has been a remarkable amount of collaboration among different developers of nature risk frameworks. The TNFD in particular has done a good job consulting existing nature frameworks, and the CSRD mandates point back to the TNFD as the "how to" guide. If companies follow the TNFD, they should easily be able to adapt their reporting to any other nature disclosures framework.

3. We are in a stronger position with nature.

Because nature reporting builds on the global frameworks for climate risk reporting, and many companies are already doing work on nature topics (e.g., water management), much of the foundational work is already done. Companies can leverage data already being collected and expertise already built for climate risk as a starting point to assess nature risks and opportunities.

What about biodiversity? Understanding the nature lexicon

"Biodiversity" is the hot new ESG topic, and the word itself is used in a number of different ways that can be confusing. We have seen it used to represent nature (e.g. biodiversity risk instead of nature risk), ecosystems (biodiversity loss), deforestation (also biodiversity loss), and of course species (plants and animals). Many companies assume that because they don't directly use species in their products, that biodiversity is not material.

Instead, we recommend that companies think holistically about "nature" as an umbrella term, of which biodiversity is a component. And in the context of nature disclosures, biodiversity serves as an indicator for ecosystem health, upon which businesses and the economy ultimately depend. This is because healthy ecosystems provide a bounty of ecosystem services that are vital to human health and the economy.

"Biodiversity serves as an indicator for ecosystem health, upon which businesses and the economy ultimately depend."

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About Dunya Analytics

Dunya Analytics is a SaaS platform offering companies science-based risk analytics for biodiversity and nature, enabling them to meet ESG disclosures requirements, and empowering them with insights in actionable financial terms to drive sustainability strategy.