Progress must be made at COP27 and COP15 to protect and restore nature, tackling the climate and nature crises coherently.
We are in the midst of a nature crisis. Nature is deteriorating at a faster pace than ever before, evident in the irreversible loss of nature and habitats. As a result, many of nature’s vital services that benefit people are also declining and companies are facing substantial risks. In 2021, $79.2 billion was reported to CDP as potential financial impacts of forests-related risks. However, as many companies who should disclose on forests still do not, the real figure is likely to drastically exceed this amount.
Protecting and restoring terrestrial and aquatic ecosystems is also essential to stemming the climate crisis, adapting to its impacts and becoming more resilient, as well as a series of additional benefits provided by healthy ecosystems, including biodiversity. Nature-based Solutions (NbS) can provide 30% of the solution we need to get on track for limiting global temperature rise to 1.5 degrees. There is no route to a 1.5C future without forests. All pathways considered by the IPCC assume a halt in deforestation and significant forest restoration over the coming decades - to be in line with a 1.5C pathway, no further deforestation can occur from 2030 onwards.
So, COP27 must deliver policies that can help reverse nature loss and environmental degradation by 2030. These policies must be integrated into new NDCs, Long Term Strategies and policy planning at all levels, reflecting those ambitious commitments declared in Glasgow last year. Policymakers must set coherent, measurable, ambitious, and far-reaching targets that can boost confidence and trigger bold actions across all levels of society, especially at subnational level and in private sector.
It’s essential that companies disclose on more than just climate, but a wider range of environmental issues. Disclosure is an immediate and important way through which businesses can demonstrate and track progress in systematically considering and addressing the nature-related considerations of their businesses. The recent CDP and AFi report “From Commitments to Action at Scale - Critical steps to achieve deforestation-free supply chains” shows that leading companies continue to take action to reduce commodity-driven deforestation and ecosystem conversion, but that for most companies progress is still slow, if any. Mandatory disclosure on nature can be an important tool to increase more consistent action.
Currently, companies are largely aware of how environmental issues may pose risks to their operations. However, companies disclosing to CDP are failing to sufficiently identify and disclose nature-related risks. Responses to CDP’s 2021 Climate Change questionnaire revealed that while 86% of the 377 disclosing financial institutions assessed their portfolio’s exposure to climate risks, the figure dropped to around 67% for risks related to water security and to around 55% for risks related to deforestation.
Corporate disclosures of nature-related risks, opportunities, impacts, and responses – if done in a comparable, consistent, and quantifiable manner – can become the foundation for transformational change. CDP urges governments to work towards mandatory disclosure that is based on unified, comparable frameworks, such as the upcoming Task Force on Nature-related Financial Disclosures (TNFD) and Science-based Targets for Nature, Accountability Framework and others. Companies want this: a recent survey by Business for Nature found that 91% of respondents agreed that mandatory disclosing requirements are needed.
COP15, set to take place in December in Montreal, will see corporate disclosure discussed in the context of multilateral biodiversity policy for the first time. This is sure to move governments even closer towards mandatory disclosure regimes that incorporate more than just climate.
COP27, especially during the Biodiversity Day (November 16th), must provide a platform to deliver a clear message about the importance of an ambitious outcome at COP15. Joint work and coherent strategies between both conferences are crucial to ensure mutually reinforcing positive impacts. We need to point to COP15 as the next critical moment on the international calendar to act and communicate that we cannot deliver the Paris Agreement and achieve 1.5C without protecting and restoring nature.
Ultimately, political leadership is needed now to transform our economic and financial systems in a way that places nature at the heart of global decision-making, create a level playing field and stable operating environment for business; and unlock further business opportunities and innovation, such as accelerating the uptake of nature-based solutions.