Understanding the impact on biodiversity and climate across such a wide range of operations is essential in combating the rapid decline in nature, and creating strategies to enhance it. At Land App, we are working with an increasing number of organisations to help them understand, quantify and mitigate their impact on nature. Here, we explain the uptake in nature reporting as an approach, and why it is so important in moving toward ecological resilience and reducing climate risk.
What is nature reporting?
“Nature reporting” is often used to refer to the process that organisations use to disclose their impacts and dependencies on natural ecosystems, including biodiversity, water, land, and climate. This process includes assessing and communicating how business activities affect natural resources, identifying risks and opportunities related to environmental sustainability, and setting targets to mitigate negative impacts. By reporting on nature, the aim is to enhance transparency, accountability, and informed decision-making, ultimately contributing to the preservation and restoration of natural ecosystems and aligning with global environmental goals, rather than continuing damaging ‘business-as-usual’.
When companies talk about ‘supply chain transparency’, then, their aim is twofold:
- Firstly, they hope to gain a better internal understanding of their operations and impact, meaning they can begin to build strategies to improve.
- Secondly, as consumer awareness and pressure grows, accountability to customers and the broader public can only be achieved through detailed understanding of impact and progress.
Supply chain transparency refers to the visibility and traceability of the entire supply chain process, from raw materials to finished products. For supermarkets, this means knowing where and how food products are sourced, ensuring they meet standards for quality, ethics, and sustainability. For banks, supply chain transparency involves understanding the supply chains of companies they finance, assessing risks related to environmental, social, and governance (ESG) factors, and promoting responsible investment practices. This transparency helps both sectors build trust with consumers and stakeholders while mitigating risks associated with unethical or unsustainable practices.
Land Use
A key component of this is land-use. At Land App, we talk about a ‘first-principles’ approach – using land and land-use change as a high level metric for understanding impact. In turn, if we can understand land-use in a high level (or ‘granular’) level of detail, then we can also understand both the current state of nature and the benefits that could be derived from planned improvements. For supermarkets, (and banks who finance any land-related business like farms) this means being able to understand the current state of biodiversity at the individual farm level. Working with farmers across their supply chains to map their holdings accurately means that a “portfolio” of all farms can be created and along with it, a new level of understanding gained.
TNFD and SBTN: Some important acronyms
There are some important frameworks that corporates are beginning to engage with: The Taskforce on Nature-related Financial Disclosures (TNFD), and The Science Based Targets for Nature (SBTN).
TNFD aims to create a framework for organisations to report on nature-related risks and opportunities and thus promote nature-positive financial flows.
SBTN provides guidance for companies and organisations to set science-based targets for nature, encompassing aspects like biodiversity, water and land.
Whilst both are currently voluntary, it is expected that as more and more companies look to adopt these approaches, having a robust and auditable way of not just understanding and quantifying current impact on nature, but planning a clear roadmap of improvement that ultimately contributes to reversing the worsening biodiversity and climate crises will be key.
Climate risk:
Ultimately, these corporations face ‘risk’ posed by these crises. They are essentially asking, ‘what is the risk of the business’? How vulnerable is the way we source food to the impacts from climate change and biodiversity loss?
A recent report from the Green Finance Institute highlighted the financial link between nature degradation and GDP, demonstrating the long-term financial risk associated with inaction on biodiversity. Mark Carney describe this as the “Tragedy of the Horizon”; the longer you let resilience degrade and therefore risk increase, the cost of mitigation almost exponentially increases.
Another way of thinking about this is, if we think of the inexorable biodiversity and climate risk posed to these businesses, the longer they don’t understand and mitigate the issue, the higher the future cost will be for them to fix it. Of course, action needs to be predicated on knowledge and understanding at the granular, right through to the systems level. This is where mapping land use, planning and costing interventions, coordinating and monitoring them accordingly comes into play.
To learn more about our partnership with Sainsbury’s, read our case-study.
Interested in finding out more about our approach to nature reporting and supply chain analysis? Get in touch today.
Land App is part of the TNFD data catalyst and listed on the TNFD website in the ‘tools catalogue’.
