Five Ways to Activate Your Board on Nature

Authors

• 

  Laura Donnelly

  Director, Nature, BSR

  

  ---

  

  Laura Donnelly

  Director, Nature, BSR

  

  New York

  ---

  Laura leads BSR’s Nature team. Her focus is working with member companies to develop holistic and credible strategic approaches to address nature related impacts and dependencies. These engagements are conducted across industries, with an additional focus on understanding the linkages between nature and other areas of focus (e.g., human rights, climate, etc.).

  Prior to joining BSR, Laura spent seven years on the markets transformation team at the Rainforest Alliance. Her role focused on engaging companies throughout agriculture supply chains in addressing risks and opportunities through incorporating nature-based solutions and interventions. This included working with companies from farm to market on their sustainability strategy utilizing the Rainforest Alliance program. Laura also has experience in the beauty industry, where she worked in brand management and marketing.

  Laura holds a Master of Communication Management from the University of Southern California and a BS in Business Administration from Boston University.

  Close
• 

  Christine Diamente

  Managing Director, Transformation, BSR

  

  ---

  

  Christine Diamente

  Managing Director, Transformation, BSR

  

  London

  ---

  Christine leads BSR’s Business Transformation team, helping companies to manage sustainability throughout their business and across their supply chains and to develop resilient business strategies that leverage insights from BSR’s Sustainable Futures Lab. She works with companies across sectors and geographies to structure a sustainability management approach that mitigates risk and captures emerging opportunities, creating strategic advantage for their businesses, while contributing to a more just, sustainable world.

  She brings over 20 years of experience in leading brand, sustainability, public affairs, communications, and reputation management with multinational corporations at the executive leadership level. This also includes overseeing corporate relations with external stakeholders, such as the World Economic Forum, the UN, European institutions, and investors.

  Previously, Christine was Head of Brand Strategy at Nokia. She has also held major roles at Alcatel-Lucent and Alcatel, leading Brand and Corporate Sustainability and European Affairs. Christine has also served on various boards, including as a chair of the Telecoms Industry Dialogue on human rights, as an advisory board member of Reuters Events Sustainability, as a member of the Alcatel-Lucent Foundation, and on the European Internet Foundation.

  Christine holds a MA in History and a BA in History and International Politics from the University of Ottawa. She completed the Management Acceleration Program (MAP) at INSEAD, and she achieved the ESG Competent Boards Certificate and Global Competent Boards Designation (2021). She speaks English, French, Spanish, and Italian.

  Close

Key Points

• Recent developments in legislation, regulation, and voluntary frameworks such as the Taskforce on Nature-related Financial Disclosures and Science-Based Targets for Nature have elevated the imperative for Boards to understand, and engage with, nature-related issues.
• The EU’s Corporate Sustainability Reporting Directive and associated European Sustainability Reporting Standards (ESRS-E4) list biodiversity and ecosystems as a material issue for oversight by boards, alongside climate change (ESRS E1).
• Nature-related issues represent a material risk for most companies, and stakeholders are increasingly holding corporations accountable for their contributions to a nature-positive future.
• Nature and climate are inextricably interlinked, and businesses cannot meet climate goals without action on nature.

An Evolving Disclosure Landscape 

The signing of the Global Biodiversity Framework in December 2022 was a turning point in global action on nature. Nature-related topics have been long addressed by business—including issues such as water use, deforestation, climate change and pollution—and were on the forefront of environmental action for much of the last decade. The framework put nature on the world stage, and raised a call to action that magnified expectations from business, not only to act on these issues but to address them in a holistic and strategic manner.  

Concurrently, guidance and expectations around both target setting and disclosure have formalized through credible frameworks such as those developed by the Science Based Targets Network and Taskforce for Nature-Related Financial Disclosures. Businesses are now expected to not just address and mitigate risk but contribute to a nature-positive future.  

The recent Corporate Sustainability Reporting Directive (CSRD) also addresses both climate change (ESRS E1) and biodiversity (ESRS E4), respectively, as material issues in their reporting standards that will require disclosure about material impacts, risks and opportunities in relation to sustainability matters and enterprise value. This will have governance implications whereby boards will need to oversee impacts, risks and opportunities, how this relates to the company’s strategy and business model, current and future processes to understand impacts, and sign off on these disclosures. On biodiversity specifically, this includes impact drivers of biodiversity loss such as climate change, land use, water use, pollution, land degradation and impacts on the state of species. 

Expectations for Boards Addressing Nature and Biodiversity Loss 

There are several reasons why nature needs to be on the agenda for corporate boards. Three primary examples include: 

• Nature is essential for achieving climate goals. The importance of Board engagement on climate is well established, and only increasing in importance. Businesses need to ensure they are enabling climate-competent Boards, as increasing external pressures drive accountability for Boards to be engaged and oversee climate goals and transition plans. To achieve these goals and demonstrate meaningful and impactful progress, companies must integrate nature and nature-based solutions (NbS) into their strategies and related interventions. Given the nascency of using NbS to quantify progress toward climate goals in Scope 3, oversite and sufficient competency by the Board on nature is critical to ensuring credibility, minimizing risk, and maximizing impact. 

• Large businesses will be accountable for addressing material nature issues. Recent developments in nature-related legislation, regulation, and voluntary frameworks such as TNFD and regulatory frameworks such as CSRD have elevated the imperative for Boards to understand, and engage with, nature related issues. This includes understanding which pressures on nature are material for the business, both in terms of dependencies on nature/business risk and outward impacts on people and the environment. Assessing the materiality of nature pressures throughout the value chain will be required for many companies, and for those issues deemed material, science-driven target setting, appropriate action, and related disclosure should be undertaken. Oversight and engagement by Boards on related strategies- particularly as they relate to long-term planning (and notably, growth projections) – will be meaningful as companies begin to act and disclose in line with compliance requirements. 

• Negative impacts on nature can carry substantial direct and indirect costs. Direct business impacts to the loss of nature and biodiversity include water scarcity, rising insurance premiums, loss of viable and productive agriculture land, supply chain instability, resource scarcity, among others. Just as important are indirect costs related to impacts on nature. These include human rights, biodiversity loss, shifting workforces, loss of cultural land, and other areas that corporations will need to manage if they are not proactively addressing their negative impacts to nature. As Boards consider other sustainability issues, they will need to consider how their business activities related to nature impacts are indirectly driving risk on other important social and environmental issues. 

Recommendations for Business 

Given the clear imperative of Board engagement on nature, what actions can Boards take now to help them engage, and prepare for required oversight? There are a few immediate steps that can be enacted: 

1. Build up competency and educate Board members on nature. The issues addressed under a comprehensive nature strategy are nuanced and often complex, and Boards should understand how key terms are defined, the connection between different terms and concepts, and how they are applicable to the business and varying business lines. For instance, does the Board know the nuance between biodiversity and nature, do they understand the connection between the two terms, and how each impacts the business? 

2. Ask how climate plans are incorporating nature. Push management to articulate how nature will be integrated into climate strategies – particularly climate transition plans and pathways to net zero. If the business has not yet begun to do this – ask for it. 

3. Understand long term impacts and related resourcing constraints. Consider undergoing scenario exercises to help illuminate how nature impacts may cause long term risk and conflict with growth plans. Utilize results of a nature assessment to highlight the most material nature issues and build scenarios to help garner insights to ultimately feed into strategy – but also build awareness on where resources may need to be deployed and scaled up to appropriately mitigate identified risks (e.g., traceability, supply shifts, data collection, etc.) 

4. Prepare for disclosure. Disclosure related to increased regulatory requirements such as the CSRD is coming as soon as January 2024 for disclosure in 2025. Ask management how they are preparing to meet the requirements, and what the roadmap is to fill gaps in data or other key information sources that might not be available.  

5. Ask the ‘right’ questions to ensure credibility. Gain a clear understanding of how current or past work on related issue areas were developed. Were targets based on science, and is there intent to do formal science-based target setting through SBTN? Have you conducted a nature assessment? Are nature impacts mapped to human rights impacts? Is there a plan to address biodiversity as it relates to upstream supply chains? Is there consideration on how TCFD-aligned disclosure (if completed) will intersect with TNFD disclosure? These questions, and more, are critical to evaluating the credibility and efficacy of a nature strategy. 

Both climate and nature are considered material topics for all companies, and subject to oversight on disclosure on the related risks, opportunities, and impact on the value chain. Boards have an important role to identify and understand these issues in terms of process and content. BSR’s Nature and Board practices are partnering with members to upskill and address the role of nature in company strategies and collaborating with stakeholders to advance urgent action in creating a just and sustainable world. For more information on activating the Board on nature-related issues, contact BSR’s Nature team.