Biodiversity and Nature-related Disclosures: from Standardized Frameworks to Managing Global Biodiversity Risks

A World Economic Forum report found that nature-positive solutions will create US$10.1 trillion in business opportunities and 395 million jobs through key sector transitions. On the other hand, biodiversity loss can impact businesses through transition, physical, regulatory, and systemic-wide risks that have the potential to impact investment value. However, nature-related investments have historically been overlooked by the capital markets. Similarly, risks brought by biodiversity loss and ecosystem degradation have been ignored by businesses and regulators.

Now, biodiversity finally seems to be at the top levels of the private sector agenda and we can expect resources to flow towards net-positive endeavors. Biodiversity is the fastest growing ESG theme in global capital markets Yet, challenges for businesses to assess and disclose nature-related risks are significant and will take time and capacity building. Here, voluntary initiatives like the Task for Nature-related Financial Disclosures (TNFD) can pave the way for future mandatory disclosures and proper risk management tied to nature degradation and biodiversity loss.

Don’t miss this new report by IOA’s non-resident fellow Soffia Alarcón and EC2 Director Tania Miranda to read more.