More than 300 businesses, including H&M, Sainsbury’s and Nestlé, have urged world leaders to make it mandatory for companies to assess and reveal their impact on nature by 2030.
Businesses and financial institutions in 56 countries – including the UK, Canada and China – are pushing for governments to agree to the disclosures at Cop15, the UN biodiversity conference being held in Montreal this December.
In an open letter to heads of state, business leaders said the business and financial status quo was “economically shortsighted and will destroy value over the long term”.
If agreed, the pledge would apply to all large companies across the 196 countries signed up to the Convention on Biological Diversity, the global agreement on protecting nature. It follows increases in the number of companies making pledges to reduce emissions, with climate disclosures now mandatory in the UK, France and New Zealand, and pressure mounting for other countries to take action.
The firms, which have combined revenues of more than $1.5tn (£1.3tn) and also include BNP Paribas, Aviva Investors, Salesforce, Tata Steel and Unilever, have agreed to assess their impacts on nature, disclose that information and publicly commit to reducing their negative effects. If parties don’t agree to make these disclosures mandatory, they will be voluntary.
Various tools are being developed to measure companies’ impacts on nature but the methodologies must be standardized and supported by science, the group says.
The open letter was released alongside a report published by Business for Nature, the Capitals Coalition, and CDP, a non-profit specializing in environmental disclosure systems. “They know there can be no business on a dead planet,” the report says. “They stand ready to transform their businesses and are calling on governments to set the rules of the game through legislation that will create fair competition for business.”
Scientists say the biodiversity crisis is as serious as the climate crisis, with an estimated 1 million species at risk of extinction, yet there is less information about how businesses affect biodiversity because this data is not being disclosed. More than 18,600 companies worldwide disclosed data about their impact on climate via CDP in 2022, yet just over 1,000 firms disclosed data on forests – and 4,000 on water security – according to the report.
A landmark review published last year by the Cambridge University economist Prof Partha Dasgupta found that the world was being put at “extreme risk” by the failure of economics to take into account the true value of the natural world.
The new report argues that making disclosure mandatory would create fairer competition for businesses, increase accountability and encourage more responsible sourcing of materials.
Eva Zabey, the executive director of Business for Nature, said: “This is an essential first step. Without this information, we are flying blind into extinction. Frameworks being developed now will support this transition, and companies stand ready to transform their businesses.”
Leyla Ertur, the head of sustainability at H&M, said: “We are looking into opportunities to change the materials we use towards 100% recycled or sustainably sourced materials, which are less resource-intensive – basically, less land use, water, pesticides and chemicals.”
Ertur said this would include focusing on using more organic cotton and increasing existing services such as repair, rental and use of secondhand products. When asked whether the company would encourage consumers to buy fewer clothes, she said the focus was about the quality of products, not the quantity.
Katie Kedward, a sustainable finance economist at University College London, who was not involved in the report, said it was good to see the push for mandatory disclosures. “However, mandatory disclosures will only be effective in addressing biodiversity declines if they rapidly translate into transforming nature-depleting business models, and there are good reasons why it may not deliver the pace of change needed in time,” she added.
Disclosing impacts on nature is much more complicated than reporting climate impacts, which have one set of metrics – greenhouse gas emissions. Biodiversity is based on a number of different metrics and data sources, which not even ecologists can agree on.
Kedward said: “It is far cheaper for these companies to spend the next eight years developing nature disclosures than it is for them to forgo their current business activities linked to nature destruction. Mandatory disclosures are an important solution, but an eight-year implementation time horizon is akin to a giant box-ticking exercise that kicks the can of real action down the road.”
Dr Sophus zu Ermgassen, an ecological economist at the University of Oxford, said disclosure cannot be a substitute for strong state action to stop investing in environmentally damaging activities.
He said: “Making nature disclosure mandatory would be a positive step, but we should recognize that providing investors information about firms’ exposure to nature-related risks and hoping that this will change the way they invest and on some very risky and questionable theories of change.”