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Blog | Wednesday September 13, 2023

Five Ways to Activate Your Board on Nature

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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. 

People

Sophie Tripier

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Sophie works with BSR member companies across industries on sustainability management, including stakeholder engagement, materiality, strategy, and reporting, among other topics. She is part of BSR’s Future of Reporting collaboration, a group of companies sharing reporting best practices and tracking the regulatory landscape in the US and EU.

Sophie brings years of operational expertise as an in-house sustainability management specialist across diverse industries such as hospitality, corporate services, logistics, manufacturing, etc. She also has experience in managing CSR foundations and engaging with NGOs and NPOs. Prior to that, she worked for EcoVadis, focusing on the analysis and sustainability scoring of supply chains.

Sophie holds a BSc in Anthropology and Environmental Management and an MSc in Environmental Science from The University of Western Australia. She is also an accredited Climate Fresk Facilitator.

Reports | Monday September 11, 2023

The Just Transition Planning Process for Business

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A Toolkit to Drive Social Dialogue and Stakeholder Engagement Toward a Just, Equitable, and Inclusive Transition

For companies designing and implementing a just, equitable and inclusive approach to net zero, the process is complex and requires difficult trade-offs. This guidance offers practical steps to help companies formulate a just transition plan, including implementation tools for:

• External stakeholder engagement and social dialogue
• Internal knowledge-gathering and discussions
• A company-wide integration strategy

People

Verena Nüchter

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Before stepping into her role as an Associate, Verena began her journey at BSR as an intern and student assistant of the climate and nature teams.

Verena’s expertise lies within interdisciplinary project work, climate and sustainability research, analysis and assessments encompassing greenhouse gas accounting, scenario development and transition strategies.

Verena holds a MSc in Climate Change from the University of Copenhagen and a BSc in Environmental Science and Business Economics from the Leuphana University Lüneburg. She speaks German, English and Danish.

People

Lucia Dardis

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Lucia supports members across industries on climate change and nature, including climate scenario analysis, peer benchmarking, sustainability management, and data analysis. 

Previously, Lucia interned at the World Wildlife Fund-US as an Agricultural Sustainability Analyst. There, she researched agro-commodity and bioplastic feedstock supply chain risks. At Evergrade, Inc., Lucia was a Consultant and Intern Manager focused on people and project management, data architecture and analysis, and environmental impact research. Through her coursework at UC Berkeley, Lucia was a Sustainability Consultant with the Clorox Company and a Data Science Research Apprentice for the CoolClimate Network, where she collaborated on a quantitative methodology for assessing the greenhouse gas reduction potential of carbon credits. 

Lucia studied business administration and data science at the Haas School of Business at the University of California, Berkeley. She completed a semester exchange at the Universitat de Barcelona, where she studied international marketing and corporate finance. 

People

Kathryn Doyle

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Kathryn works with a range of BSR member companies, particularly in the technology sector, on human rights issues. She has conducted a variety of country-level human rights risk assessments and focused on online platform regulatory projects under the EU's Digital Services Act and UK's Online Safety Act. Additionally, she supports the Tech Against Trafficking collaborative initiative. ​

Kathryn has particular expertise in working with companies on stakeholder engagement, is a skillful project manager, and works to develop strong and supportive relationships with our BSR member companies.​

Prior to joining BSR, Kathryn worked on programs, advocacy, research, grant writing, and civil society engagement at Global Partners Digital and other NGOs focused on human rights. ​

Kathryn holds a MA in Global Social Work and Policy from Boston College and a BA in English from Loyola University Maryland.

Blog | Tuesday September 5, 2023

Interview with the Future: Meet the CSO of Antennae, a Manufacturing Company Operating in 2030

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Resilient strategies are built to stand up to the different shapes the future could take. One of the best tools for building such strategies is to consider possible scenarios—not just for the climate but for other world-shaping trends with highly uncertain outcomes. How might globalization look in five years’ time? How could regulators be dealing with AI? We can’t know, but we can use scenarios to hone our capacity to anticipate and prepare.     

In this time-travel interview, we journey into a scenario where a strong retreat from economic globalization meets the wild west of artificial intelligence. And in this imagined future, we hear from Lorna León, the fictional Chief Sustainability Officer (CSO) of Antennae—an imaginary manufacturing company supplying electrical components for satellites. It’s 2030: what can Lorna see from her vantage point? How has the world changed, and what does it mean for companies like hers?

Future Company Profile: Antennae, Inc.

Antennae is a Germany-based manufacturer of satellite components. Founded in 1990, Antennae has grown to over $2B in sales with facilities in Europe, Asia and North America. The booming space industry has driven rapid growth for Antennae since 2015, with severe pressure on product performance, price, and development time for customers in the satellite communications and earth imaging industries. In recent years, Antennae’s customers and investors have become increasingly concerned about data privacy, the company’s ethics and labor practices in a secretive industry, and emerging risks from government interference in the space sector.

Thanks for talking to BSR, Lorna! What’s the world looking like in 2030?  

The pandemic and its disruptions are largely forgotten—but the uneven recovery left scars. Supply chains have struggled to normalize, with shortages of everything from workers to parts to shipping containers. Employees have changed their expectations of work, increasingly questioning the how, where, what and why. Meanwhile, political leaders are ploughing up any common ground they used to tread: countries are pulling out of international regulations and restricting imports on hazy grounds. Alongside rising nationalism and geopolitical tensions, we have record-breaking climate-driven natural disasters hitting the headlines almost every week. 

And what has changed for technology?  

Technology has continued its rapid pace of evolution. Artificial Intelligence has created new products, taken hold in manufacturing floors, and is now driving the cars, flying the planes, launching the satellites, playing the all-seeing eye and the all-hearing ear, and generally telling us what to think – as well as what we’re thinking. It has changed the landscape of media altogether: human voices are increasingly lost in the limitless creative noise of generative AI, bringing huge challenges to authenticity and trust. Human interactions are not what they were...   

And how is industry adapting?  

Companies are investing heavily in electrification and automation – particularly in the transport sector. Designers for driverless cars are scrapping the rules: you now have cars on the road in certain smart cities without a ‘front’ or ‘back’—the seats pivot on top of the trunk, ‘reverse’ is a thing of the past!    

Traditional airlines have struggled to plot their course (so to speak) in such an uncertain landscape.  Consumer demand spikes and crashes as world leaders shake hands then ‘break up’ from one week to the next, opening and closing borders like park gates. Oil prices are all over the place. Then there’s the heat, which has brought down some airport infrastructure and caused massive flight delays.  
 
The wealthy are all vying for tourist tickets into space, which is now literally the “wild west” as far as regulation goes—legally considered international waters according to treaties. But actually no one knows what’s going on up there! Too many operators, too much data, too few checks...  

What are governments doing in this complex and charged landscape?  

They are either unable or unwilling to manage artificial intelligence. Instead, they’ve mostly coopted it for national security agendas and to monitor everything of interest—from trade to people to sensitive data—with no coordination for data protection or standards. 

As it’s impossible to know which companies are operating infrastructure and providing data analytics for which governments, we’re seeing these geopolitical stalemates in which countries are unable to locate the players behind apparent threats. Trust has really hit rock bottom—not only between governments but between citizens and state, and between citizens and corporates. It’s the age of conspiracy theories.  

What does all this mean for companies? 

With distrust in governments at a new high, and so much uncertainty in the regulatory landscape, companies have mostly withdrawn to home countries – with multinationals fracturing at the seams. The ever-increasing capabilities of AI and automated systems does a lot to keep labor costs low in higher-income countries—especially as migration, immigration, and even remote working across borders are heavily restricted. But poor transition planning has left a bigger mismatch between available jobs and jobseekers than automation accounts for, and that’s fueling unrest as inflation keeps pushing living costs to the sky.  

And how is your company holding up?  

We’ve carved out a niche in being a trusted, traceable provider to the ‘wild west’ of space. There’s no regulation to speak of, but ultimately procurers for satellite companies want the highest standards, because they have to minimize the risk of malfunction at all costs. We worked hard to build the sort of relationships and contracts that can deliver on their expectations and support interoperability across very different regimes. 

That’s all we have time for today! You’ve been hearing from Lorna, the CSO of Antennae, sharing her perspective from 2030.  

• How would your company fare in such a future? What strategies could you put in place today to help prepare?  

• What other scenarios might we imagine? What if we saw a renewed push for economic globalization? Or strong regulation of AI?  

In September, BSR is running a workshop for members in EETI to explore different future scenarios and examine their implications. Become a member and join us to find out what resilience means for industry and manufacturing.  

Blog | Thursday August 31, 2023

Inside BSR: Q&A with Juliette Pugliesi

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Tell us a bit about your background. Where are you from, and where are you based?

I grew up in a small French village close to Paris, surrounded by oak forests and rivers. I have a background in environmental sciences and sustainable development. Currently, I’m based out of BSR’s Paris office. 

How did you first get involved in sustainable business? What is your current role, and what does that entail? 

I’ve felt deeply passionate about nature conservation since I was a child. My favorite cartoons were wildlife documentaries. At ten-years-old, I was in the local newspaper for identifying a specific owl (Athene Noctua) at a competition organized by the region.

In my third year of university, I had the opportunity to work in Kenya at a wildlife reserve owned and operated by the local community in the Great Rift Valley. My main responsibilities included maintenance, inventory, and diagnosis of the fauna and flora of the reserve as well as communication around biodiversity. The reserve focused on preserving the ecosystem and protecting a specific endangered giraffe—the Rothschild Giraffe. Scientists currently recognize only one species of giraffe with nine subspecies. It is easily distinguishable from others because of its white legs that look like long socks! 

Following this, I worked in sustainability and nature topics at various entities, including a research department on waste management in a mission-driven company and an audit company, assessing the reliability of companies' data disclosed in CSR reports. At WWF France, I supported companies on their nature issues across different industries. I was also seconded to Science Based Targets for Nature where I was lead coordinator for the working group on biodiversity metrics for companies. I really enjoyed working at the interface of international research and supporting business with taking action on nature.

At BSR, I help companies identify and address their impacts on nature and develop ambitious strategies. I love the variety of projects around nature across various industries and organizations—including nature benchmarking, biodiversity or freshwater risks site assessments, commodity risks assessment, nature strategy, implementing actions and roadmaps, and support in training and education around nature. I love the people I work with, the international environment, and the BSR mindset to build impactful projects to achieve a just and sustainable world.

Congratulations on the recent “Le Cercle de Giverny” nomination! Could you tell us more about the award?

Thank you! The Cercle de Giverny is a hybrid think-tank to scale up corporate social responsibility in France. The work is placed under the patronage of the Ministry of Economy and Finance. The Cercle de Giverny has 2 main activities:

• Propose recommendations for the French Government on CSR topics: Le Cercle de Giverny built up working groups of experts and companies that will present 20 to 25 recommendations to the French government on CSR issues. I’ve been appointed to belong to the working group on how to represent nature within decision-making bodies.

• The Palmares of Giverny. This award brings together 50 committed leaders who are helping to accelerate France's ecological and social transformation. It recognizes commitment, entrepreneurship, and creativity of young people who are building the future with hope and pragmatism. I am very proud to have won this award and to represent BSR. It was also a wonderful opportunity to meet a group of inspiring young people who are motivated to act on sustainability in their day-to-day work. 

What are some interesting projects that you get to work on as part of your role at BSR? What do you enjoy about them? What are you looking forward to in the next 6 months? 

I have largely focused on developing BSR’s Nature services for members based on the Science Based Targets for Nature (SBTN).

SBTN aims to set the standard for ambitious measurable corporate actions on nature which includes, and builds upon, climate actions. It is a network of 80+ NGOs, business associations, and mission-driven consultancies contributing their expertise to collectively define targets to stay within planetary boundaries. The first technical guidance was released in May and provided insights on how companies can assess their impacts on nature, prioritize, and set targets for Freshwater and Land. I truly believe that companies’ action on nature needs to be informed by science to ensure they are doing enough and that their activities fit into the biophysical limits of our planet. 

I am currently involved in a project to support SBTN in building a “Readiness Check Framework”—a self-assessment tool that will help companies, NGOs, and consultancies to assess the accuracy of their work prior to target-setting. This tool is currently tested by around 30 companies and will help SBTN scale up actions and impact.

I also support a wide range of companies on nature topics. I worked with an IT company to assess the current state of nature in 14 countries in Asia-Pacific and develop recommendations to reduce nature loss. I also carried out nature benchmarking for a hydropower company and built-up recommendations on a nature roadmap for their direct operations and upstream impacts. Recently, I worked on a commodity risk assessment as well as a biodiversity and water site assessment of more than 2000 sites for a jewelry company. All of these projects raised key and concrete questions on how to avoid and reduce the company’s impacts on nature as well as restore and regenerate natural areas.

What issues are you passionate about and why? How does your work at BSR reflect that? 

I am passionate about nature. Nature loss would be the most important challenge we are facing today and need to tackle in the future. I am driven to learn more about my favorite subjects, nature, and biodiversity, from other people. I also like to share my knowledge with my colleagues and educate others outside of BSR. I am a temporary teacher at AgroParisTech, an engineering school where I am speaking on biodiversity as well as tools available for organizations to tackle nature and biodiversity topics.

People

Margot Thompson-Wells

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Margot supports BSR member companies across industries in advancing human rights and sustainability throughout their value chains. She also supports BSR’s Human Rights Working Group, helping companies around the world implement the UN Guiding Principles on Business and Human Rights (UNGPs) and navigate emerging trends and best practices.

Before joining BSR, Margot worked in partnerships and public affairs at the United Nations Foundation, managing initiatives and relationships with civil society, corporate partners, and UN agencies to advance the Sustainable Development Goals (SDGs). Prior to this, she worked at a Colombian foundation in Bogotá and at a Geneva-based NGO focused on children's rights.

Margot holds a BA in International Relations from the University of Exeter and is fluent in English, French, and Spanish.

Blog | Monday August 21, 2023

Bringing the Most Vulnerable to Climate Change to the Boardroom

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Boards and executives rarely hear directly from the communities most affected by climate change, who are seldom represented in the boardroom or included in stakeholder engagement. Given the extent of inequities that heighten their exposure to climate risk—low-income livelihoods across supply chains; lack of access to basic financial, legal, and public services; and a plethora of diversity divides—a voice in the boardroom might seem to come low on the list of priorities.

But a different perspective is gaining momentum: boardrooms and governing bodies need people from the climate frontline if they are to take meaningful action on ESG, both to reduce their exposure to climate risk and to address the increasingly recognized climate adaptation gap. 

Current policies will push around 2 billion people out of the environmental and climatic conditions“climate niche” that best support human life by 2030, increasing to around 4 billion—an estimated third of the global population—by the end of the century, according to a recent study.

The climate adaptation gap refers to the understanding that those most vulnerable to climate impacts have the least means of increasing their own resilience. Not only do they lack the funds, access, and rights to invest in and safeguard their future, from building skills to adapt to workforce volatility to developing land and property to withstand climate impacts, they lack the influence to drive action that might mitigate risks. 

The risks to these communities are risks to business. There are vulnerable workers and dependents across the supply chain from farms and plantations; extractive sites; factories; transport; to logistics. The more businesses can understand how these communities are affected, the better they can work with them to counter the risks. This is where a voice in boardrooms and executive leadership can make a difference.

The need coincides with growing calls for more representation at the highest levels of corporate governance, particularly of women and youth, and linked specifically to climate change. As one student wrote in a letter to the Financial Times: "Age diversity is extremely low among chief executives and across most boards of directors in listed companies. At the same time, our species is facing global grand challenges that are profoundly characterized by an intergenerational dimension.”

Changing Expectations from Regulators, Investors and Customers 

Activism on climate action is increasingly reaching the boardroom—with calls for change from regulators, investors, customers and employees. In the EU, the Corporate Sustainability Due Diligence Directive, the Corporate Sustainability Reporting Directive (CSRD), the Green Taxonomy, and the Mandatory Human Rights Due Diligence Directive (HRDDD) are redefining the role of boards by obliging them to oversee climate, social impact, human rights and governance at their companies. In the US, the draft Securities and Exchange Commission rule will likely require disclosures on how the board is overseeing climate-related risks and opportunities, prompting a review of existing governance structures. And the recent International Sustainability Standards Board (ISSB) Sustainability Disclosure Standards also call for an increased board role in reviewing climate-related risks and opportunities. 

Meanwhile, these regulatory requirements are surfacing deep tensions in how companies can best protect and serve all employees. For instance, pressure on reporting brought by recent EU legislation could have the catastrophic impact of squeezing smallholders, who lack the resources to meet new requirements, out of supply chains. Indonesia and Malaysia responded to the recent deforestation law by sending top officials to Brussels to seek fairer treatment for small palm oil farmers.

Beyond legal requirements, expectations of business directors are changing, with investors and other stakeholders demanding deeper board engagement and oversight, more transparency, and opportunities to engage with directors. The financial risks will also become more apparent with the increasing impact of climate change, as well as the challenges it presents to insurance. 

Building Climate Resilience through Stakeholder Engagement 

Business can enable credible action to build climate through diverse representation and engagement at the highest levels of governance, particularly on boards and Stakeholder Advisory Councils . The challenges of a just transition and achieving climate justice demand that businesses co-create solutions with frontline communities. For this, those leading the charge need a firsthand understanding of the risks and impacts. They also need a mindset change, widening their focus beyond near-term value generation to encompass long-term risk mitigation and adaptation, and beyond what’s material to their stakeholders today to monitor shifts that may appear distant but whose impacts could quickly escalate to render business-as-usual impossible.

This is not to underestimate the extent of change required. As David Korngold, Director of Business Transformation says: “Meaningful corporate engagement with stakeholders is set back by transactional or extractive relationships, overreliance on large global voices, and under-engagement with affected stakeholders—including fleeting interactions. Not only this, but engagement is often treated as the end-goal, rather than a means to co-create an equitable future.”

Recommendations for Business Leaders 

Business leaders that act will not only get ahead of regulation, stakeholder expectations, and activism, but they will find themselves better positioned for effective leadership and resilience, thanks to expanded knowledge, competencies, and expertise. Key recommendations include: 

• Prioritize diversity in the representation and engagement of stakeholders at the highest levels of governance

• Develop mechanisms to engage with affected stakeholders, whether through Stakeholder or External Advisory Councils or other direct dialogues in close collaboration with management 

• Use engagements to listen to current issues, maximizing the opportunity to increase directors’ understanding of climate risk and enable thoughtful dialogue with affected parties 

• Empower External Advisory Councils to amplify the voices of stakeholders and enhance their oversight

• Schedule regular meetings to cultivate highly engaged and committed standing groups 

BSR has extensive experience engaging with boards and Stakeholder Advisory Councils, including on climate justice and adaptation. For more information, please contact the Sustainability Management team.