Six months ago this week, a historical agreement was signed in Montreal by nearly 200 countries to protect biodiversity. While mandatory reporting on nature may still be distant, some companies have recognized the importance of measuring their impact on nature for various reasons, such as managing reputations, minimizing costs, and ensuring survival. Jennifer Motles, Chief Sustainability Officer at Philip Morris International, believes that preserving natural systems is as crucial as reducing emissions. She emphasizes the need for data to accurately report PMI’s natural impact, which helps build trust with investors and the public. PMI focuses on preserving biodiversity by addressing deforestation, soil degradation, and water stewardship, using geospatial data to map land usage and assess intervention effectiveness.
Anglo American, a mining company, has partnered with startup NatureMetrics to assess its impact on the environment. NatureMetrics utilizes samples of water or soil to measure species diversity and abundance, cross-checking with open-source DNA databases. Anglo American plans to implement this technology across all its sites by 2025, aiming for a net positive impact on global sustainability.
Cognac distiller Rémy Cointreau considers sustainable agriculture an existential issue, launching an environmental-credit program to boost regenerative agriculture. Collaborating with LVMH Moët Hennessy Louis Vuitton, Genesis, and the World Wide Fund for Nature, this program goes beyond carbon credits by considering overall environmental health. However, these companies are among the few analyzing their impact on nature, according to Steve Kennedy, an associate professor at the Rotterdam School of Management.
Kennedy highlights the potential severe consequences for companies from the degradation of natural systems, such as desertification, coral loss, and dead zones. The World Bank estimates that the collapse of natural systems could lead to a $2.7 trillion annual economic loss by 2030. Assessing biodiversity impact remains challenging compared to measuring greenhouse gases. Zoe Balmforth, co-founder of biodiversity-data startup Pivotal, believes that comprehensive data can provide better insights. Pivotal uses methods like drone surveys to help companies gauge their impact on the environment and biodiversity.
Governments are expected to introduce laws and policy measures requiring large companies and banks to disclose and reduce their impact on ecosystems, based on agreements reached at the COP15 conference on biodiversity. Additionally, the Taskforce on Nature-Related Financial Disclosure aims to help businesses assess and report natural risks and will publish its final framework in September. Large firms, including GSK and Kering, will submit information on water and land usage to establish targets for their nature plans.
Mandatory reporting is welcomed by many companies as it creates an even playing field. PMI’s Motles acknowledges the value of regulation in providing clarity and standards for reporting. Without frameworks, reporting becomes subjective.
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