This article is the second in a three-part series on addressing biodiversity loss. Read the other articles here:
- Why Biodiversity Loss Demands a Seat at the Table
- Turning Target 15 into Private Market Action on Biodiversity
In 2015, the Paris Agreement set a clear pathway for the global effort to effectively and cooperatively fight climate change. In December 2022, a similar effort was put forth during the 15th Conference of Parties (COP 15) by businesses, governments, and civil society to address the detrimental issue of biodiversity loss. While calling for ambitious outcomes, the conference adopted the historic Global Biodiversity Framework, intended to safeguard nature and restore planetary health. Its adoption marks the first time governments reached an agreement on nature-related business activities and expectations with such vast, multilateral support. Similar to the role that the Paris Agreement played in climate change action, the Global Biodiversity Framework has the potential to provide businesses and financial institutions with the strict policy guidance needed to ensure sustainable and restorative use of nature-related resources.
The Global Biodiversity Framework is driven by the vision to live in harmony with nature by 2050 with an interim target of halting and reversing biodiversity loss by 2030. Based on this mission, the framework outlines goals, milestones, and targets for various stakeholders to implement. Target 15, in particular, is most material to the private sector and outlines the actions required by businesses and financial institutions to address biodiversity loss. The key objectives for the private sector are summarized below.
What Target 15 Means for Private Sector Activity
Target 15 requires private sector companies to set legal, administrative, or policy measures to “encourage and enable, and in particular, ensure that large and transnational companies and financial institutions” act on nature-related objectives.
Scoping: Requirements vary according to company size
The scope is the first key takeaway to note, as it indicates who will be required to abide by the necessary steps. The target explicitly differentiates between large businesses and small and medium-sized enterprises (SMEs), and narrows the audience to the former to provide direct and intended actions. The target states that large and transnational businesses are required to follow the listed objectives, indicating that they will not be limited to voluntary measures. While all businesses are “encouraged and enabled” to comply, the target recognizes that SMEs may require a more tailored approach to advance the objectives given their comparatively smaller resource pool and capacity level.
Disclosing Biodiversity-Related Risks
Under Target 15, large businesses and financial institutions will be required to report on their biodiversity-related “risks, dependencies, and impacts.” Businesses must exhibit the implications of nature loss on their financial or inward-facing value, as well as their outward-facing impact on nature, objectives that follow the trend of double materiality. It is important to note here that a business’s “supply and value chains” are explicitly included, indicating that nature-related action cannot be confined to a business’s operations but requires collaboration across the entire value chain. This inclusion aligns with the objectives set out by climate-related disclosures and the need to measure Scope 1, 2, and 3 emissions. As climate-related disclosures have grown increasingly common and standardized since the Paris Climate Agreement, businesses and financial institutions should expect nature-related assessment and disclosure to follow a similar trajectory.
Educating the Consumer Base
Target 15 requires businesses to inform consumers on how to make more sustainable consumption choices. Unsustainable consumption patterns are one of the root causes driving biodiversity loss, climate change, and pollution. Consumption growth leads to natural resource depletion, waste generation, and the increased pollution of ecosystems. The responsibility of businesses to engage with and educate their consumers is not only a piece of the Global Biodiversity Framework, but is also a key element of the UN Sustainable Development Goals, specifically Target 12.6 under Goal 12.
Ensuring Fair and Equitable Sharing of Genetic Resources
Lastly, Target 15 requires businesses to report on their compliance with access and benefit-sharing regulations, when applicable. A complex subject, access and benefit sharing refers to how genetic resources are used, who has access (both the user and the provider), and how the resulting benefits are fairly and equitably shared.
Genetic resources are understood to be any living organism carrying genetic material deemed beneficial to human use, whether for pharmaceutical, agricultural, industrial, or scientific use. Genetic resources hold critical importance. However, like most resources, they can only be accessed in certain areas and often within complex, valuable, and easily disrupted ecosystems. As a result, regulation exists to promote the sustainable use of genetic resources, which includes the fair and equitable sharing of traditional knowledge and associated benefits. Requiring businesses to report on the status of their compliance with such regulation ensures that biological diversity and its components are conserved and used sustainably.
The Future of Business and Nature
The actions required by Target 15 of the Global Biodiversity Framework advance the target’s main objective, which is to establish a clear path for businesses and financial institutions to reduce their negative impacts and increase their positive impacts on biodiversity. Doing so facilitates the mission to halt and reverse biodiversity loss by 2030 and live in harmony with nature by 2050.
Businesses and financial institutions can expect nature-related disclosure and reporting to become standard practice. In some places, such as the European Union, regulatory changes have begun to unfold. Where it has yet to take effect, businesses should prepare as regulation will continue to surface in the coming months and years. To prepare for the anticipated changes, businesses must first understand what is taking place in the global arena and what information is most material to them. The requirement for businesses to assess, report on, and manage biodiversity dependencies and impacts is a daunting task, no matter where a company is on its biodiversity journey. Such undertaking requires vast knowledge, expertise, and skill in nature-related matters. Fortunately, various actors and standards organizations have begun to develop frameworks, guidance, and tools to help business leaders on this journey. Insight into the growing body of frameworks and guidance will be detailed in Novata’s next article in our Biodiversity series.