The Climate Disclosure Standards Board (CDSB) has today released a ‘how to’ guide for companies seeking to disclose information to investors about their exposure to biodiversity-related risks and opportunities.
The guidance is intended to help firms understand how they should approach the burgeoning topic, which is shooting up the agenda of investors and policymakers globally. Today, nine more investors – including pension funds KLP, PensionDanmark and ERAFP – signed up to the Finance for Biodiversity Pledge, which commits them to collaborating, engaging, setting targets and reporting on biodiversity by 2025. 84 financial institutions have now signed up to the Pledge.
“More work is needed to ensure that reporting on material information about biodiversity-related issues in mainstream reports is of sufficient quality and detail to support decision-making by investors and other stakeholders,” CDSB stated. An educational module will be added to the Taskforce on Climate-related Financial Disclosures’ ‘knowledge hub’ in coming weeks to reflect the new guidance.
CDSB, which has already launched similar guidance for climate change and water risk, said it “envisioned that this guidance will contribute to the work of the IFRS Foundation via the establishment of the ISSB” – referring to the influential global standards currently being developed by the International Sustainability Standards Board. Those standards will initially focus on creating rules for how to report on climate risk, but will eventually be extended to cover other issues including biodiversity.
A Taskforce on Nature-related Financial Disclosures was also launched this summer to develop expectations for the space, although that project will have a wider, ‘double materiality’ focus – looking at the impacts of business activities on biodiversity, as well as the financial risks that nature loss poses to companies’ bottom lines.
The Finance for Biodiversity Pledge said today that it would launch a working group dedicated to addressing the positive impacts of company and investor performance on nature next year, via its foundation. It will also create a group looking at target setting.
In other biodiversity developments, the UK Parliament’s Environmental Audit Committee is calling for views on revising the traditional measure of UK economic prosperity to take greater account of natural capital and environmental sustainability.
“Transitioning to a green economy also involves a rethink of how we measure economic success. For decades we have concentrated on GDP growth, often discounting natural capital and environmental sustainability,” said the group’s Chair, Philip Dunne.
Submissions must be provided by 7 January 2022 and will inform two hearings early in the year investigating the issue.