SHINING THE SPOTLIGHT ON NATURAL CAPITAL

As we continue to encourage sustainable development and environmental preservation to support a sustainable future, the concept of natural capital has emerged as a key driver within global policy frameworks.

Natural capital refers to the earth's stock of renewable and non-renewable resources, encompassing ecosystems, biodiversity, air, water, and soil. The human race draws on these resources to support a wide range of services, often called ecosystem services, which are vital to our continued survival. These include the provision of clean air and water, pollination of our crops to produce food, as well as regulating services such as climate regulation and natural flood defences.

However, global biodiversity is rapidly declining due to human-induced environmental change. In fact, the recent WWF Living Planet Report shows global biodiversity has declined by an estimated 69% since 1970.

Global biodiversity has declined by an estimated 69%since 1970

WWF Living Planet Report

The Global Biodiversity Framework sets out goals to protect at least 30%of lands, rivers, wetlands and sea by 2030

Kunming-Montreal Global Biodiversity Framework

The EU Corporate Sustainability Reporting Directive CSRDmakes it a legal requirement for companies to report on the impact of their activities on the environment and society

EU Corporate Sustainability Reporting Directive (CSRD)

As society continues to tackle environmental challenges, urgent action is vital to help reduce biodiversity loss and restore the healthy functioning ecosystems on which humanity is so reliant. As part of that, it has become more important than ever for businesses to understand and communicate their impact on natural capital.

Natural capital in global policy

There have been a number of recent developments in global policy frameworks and regulations that are contributing to the growth of natural capital as a concept. These include:

The Kunming-Montreal Global Biodiversity Framework (GBF), published in December 2022, which sets out goals to reduce biodiversity loss by 2050, for example protecting at least 30% of lands, rivers, wetlands and sea by 2030. Target 15 of the GBF refers to governments taking legal, administrative or policy measures to encourage and enable businesses to regularly monitor, assess and transparently disclose their risks, dependencies and impacts on biodiversity.
The EU Corporate Sustainability Reporting Directive (CSRD), which makes it a legal requirement for companies operating in the EU over a certain size and revenue to report on the impact of their corporate activities on the environment and society. This includes topics relating to Biodiversity and Ecosystems for their reporting year 2024.
The Taskforce for Nature-related Financial Disclosures (TNFD), a voluntary framework of guidance which includes recommended disclosures and step by step guidance for corporates and financial institutions on identifying their nature-related impacts, dependencies, risks and opportunities.
The Science-based Targets Network (SBTN), which provides guidance to companies on setting nature-related science-based targets.

The sheer number of frameworks and guidelines can seem daunting, particularly as so many are still in their infancy. That is why, as companies continue their journey towards identifying and reporting impacts, many are turning to third party consultants such as Bureau Veritas – offering an experienced team of sustainability experts with unrivalled understanding of the latest requirements.

Lauren

Cocker

Assistant Consultant for Sustainability

Bureau Veritas

Corporates and financial institutions are beginning to commit to voluntary frameworks such as the TNFD, and some will also be subject to mandatory reporting requirements such as the CSRD. It’s inevitable that they are asking questions and seeking support from consultancies to help meet their requirements and give confidence to stakeholders in the most effective way.

With a wide range of environmental expertise, Bureau Veritas is well positioned to support companies on their journey to identifying the nature-related impacts, dependencies, risks and opportunities associated with their business operations.

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