Number of companies disclosing their biodiversity-related risks, dependencies, and impacts
2024-03-28 00:00:00 UTC
N/A
Headline indicator for Target 15Take legal, administrative or policy measures to encourage and enable business, and in particular to ensure that large and transnational companies and financial institutions:
Target 15 seeks to foster more sustainable patterns of production and financing. It aims to progressively reduce the risks related to biodiversity loss faced by business and finance as well as their negative impacts on biodiversity, and to increase their positive contributions to nature. By reporting on risks, dependencies, and impacts, companies and financial institutions contribute to a broader understanding of how their operations, supply and value chains, and portfolios interact with biodiversity. While there are several (private sector) reporting initiatives, there is currently no globally comprehensive information on this issue. This indicator - on disclosing biodiversity-related risks, dependencies, and impacts of businesses and finance - would address that important information gap. It encourages large and transnational companies and financial institutions to assess and recognize their role in biodiversity conservation. This involves assessing the impacts of their activities (or the operations they finance) on biodiversity and analysing the risks posed by biodiversity loss to their operations and supply chains. Subsequently, companies are prompted to take steps to address these identified impacts and risks.
Additionally, through comprehending the interconnections between biodiversity, businesses, and finance, governments can better formulate targeted regulations that address the most pressing challenges and promote sustainable practices. This broader understanding enables governments to identify the areas where regulatory intervention and support are most vital, allowing for the strategic allocation of resources to both mitigate adverse impacts and encourage positive contributions.
Indicator definition:
This indicator requests countries to measure the number of large and transnational companies and financial institutions that disclose information about their interactions with biodiversity in terms of risks, dependencies, and impacts. Companies and financial institutions reporting on these aspects typically disclose information about how their operations, their supply and value chains, or the operations they finance, affect biodiversity, the dependencies they have on biodiversity, and the risks posed by biodiversity loss to their operations and supply chains.
Other key concepts and definitions:
Companies, under this indicator are understood as enterprises and financial institutions that are nationally recognised as being ‘large’. Alternatively, parties may choose to rely on the World Bank’s definition for SMEs and consequently of large companies. The World Bank defines SMEs as those enterprises with a maximum of 300 employees, $15 million in annual revenue, and $15 million in assets.
While companies often deliver consolidated reports at a group level, it's important to recognize that many of their impacts manifest locally, and some subsidiaries or franchises produce their own sustainability reports. For the purpose of this indicator, both the group and subsidiary/franchise levels can be counted as distinct entities. Therefore, when using the term "company," it can refer to either the parent company or a franchise/subsidiary, depending on how they disclose information on biodiversity-related risks, dependencies and impacts.
Disclosing, is understood for this indicator as the act of making information available to the general public and stakeholders, in a clear and transparent manner. In this context, it means making information publicly available about a company’s impacts and dependencies on biodiversity, and its risks from biodiversity loss.
(OECD, Biodiversity: Finance and the Economic and Business Case for Action, 2019)
Dependencies are aspects of environmental assets and ecosystem services that a person or an organisation relies on to function. A company’s business model, for example, may depend on the ecosystem services of water flow, water quality regulation and the regulation of hazards like fires and floods; provision of suitable habitat for pollinators, who in turn provide a service directly to economies; and carbon sequestration. (Sources: TNFD Glossary of Key Terms, version September 2023, and adapted from Science Based Targets Network (2023) SBTN Glossary of Terms )
Impacts refer to a change in the state of nature (quality or quantity), which may result in changes to the capacity of nature to provide social and economic functions. Impacts can be positive or negative. They can be the result of an organisation’s or another party’s actions.
(Sources: TNFD Guidance on the identification and assessment of nature related issues: The LEAP approach, version October 2023; Science Based Targets Network (2023) SBTN Glossary of Terms; Capitals Coalition (2016) The Natural Capital Protocol; Climate Disclosure Standards Board (2021) Application guidance for biodiversity-related disclosures.)
In order to be counted under the indicator, companies and financial institutions need to publicly disclose their biodiversity-related risks, impacts and dependencies on a regular basis, and in line with relevant standards, regulations and/or best practices. For example, through disclosure of risks, impacts and dependencies on biodiversity, in line with:
The computation of the indicator involves a straightforward counting process. Any entity that adheres to the "company" definition (see 5a) and that discloses its biodiversity-related risks, impacts and dependencies, per description above, is counted as a disclosing company within the context of this indicator.
Governments have various channels through which they can gather information about which and how many companies and financial institutions disclose information about their biodiversity risks, dependencies, and impacts. It's important for governments to use a combination of approaches to ensure a comprehensive overview of biodiversity disclosures within their country. Collaborative efforts with businesses, industry stakeholders, and civil society can contribute to a more robust and effective monitoring system:
For example, in France, companies send their reports to the Autorité des Marchés Financiers – AMF, to be in compliance with the energy-climate law (article 29) requiring asset management companies and financial companies (for their asset management activities) to disclose their nature-related risks, impacts and dependencies. These reports are then sent to ADEME (a public environmental institution), which makes a comparative analysis.
See section 5c.
In most countries there are no specific entities tasked with gathering and assessing all relevant information regarding the disclosure of companies' biodiversity-related risks, dependencies and impacts.
Not identified, see above.
Significant data gaps are expected, as most countries lack specific entities tasked with systematically gathering and assessing companies’ disclosures on biodiversity-related risks, dependencies and impacts, risks.
Scale of application: Global, Regional, National
Scale of data disaggregation/aggregation:
Global/ regional scale indicator can be disaggregated to national level: Yes
National data is collated to form global indicator: Yes
No
Recommended disaggregation include: By sector. Aligned with the sector classification proposed by UNCTAD and UNEP for SDG indicator 12.6.1, using the International Standard Industrial Classification of All Economic Activities (ISIC) (first level classification):
N/A
In most countries there are no specific entities tasked with gathering and assessing all relevant information regarding the disclosure of companies' biodiversity-related risks, dependencies and impacts.
Odile Conchou(odile.conchou@wanadoo.fr)
Macha Kemperman(mkemperman@worldbank.org)
Geraldo Fernandes (gwf@biodiv.com.br)
Ntakadzeni Tshidada (n.tshidada@sanbi.org.za)
Websites:
The Taskforce on Nature-related Financial Disclosures
The Science Based Target Network
Number of companies disclosing their biodiversity-related risks, dependencies, and impacts
2024-03-28 00:00:00 UTC
N/A
Headline indicator for Target 15Take legal, administrative or policy measures to encourage and enable business, and in particular to ensure that large and transnational companies and financial institutions:
Target 15 seeks to foster more sustainable patterns of production and financing. It aims to progressively reduce the risks related to biodiversity loss faced by business and finance as well as their negative impacts on biodiversity, and to increase their positive contributions to nature. By reporting on risks, dependencies, and impacts, companies and financial institutions contribute to a broader understanding of how their operations, supply and value chains, and portfolios interact with biodiversity. While there are several (private sector) reporting initiatives, there is currently no globally comprehensive information on this issue. This indicator - on disclosing biodiversity-related risks, dependencies, and impacts of businesses and finance - would address that important information gap. It encourages large and transnational companies and financial institutions to assess and recognize their role in biodiversity conservation. This involves assessing the impacts of their activities (or the operations they finance) on biodiversity and analysing the risks posed by biodiversity loss to their operations and supply chains. Subsequently, companies are prompted to take steps to address these identified impacts and risks.
Additionally, through comprehending the interconnections between biodiversity, businesses, and finance, governments can better formulate targeted regulations that address the most pressing challenges and promote sustainable practices. This broader understanding enables governments to identify the areas where regulatory intervention and support are most vital, allowing for the strategic allocation of resources to both mitigate adverse impacts and encourage positive contributions.
Indicator definition:
This indicator requests countries to measure the number of large and transnational companies and financial institutions that disclose information about their interactions with biodiversity in terms of risks, dependencies, and impacts. Companies and financial institutions reporting on these aspects typically disclose information about how their operations, their supply and value chains, or the operations they finance, affect biodiversity, the dependencies they have on biodiversity, and the risks posed by biodiversity loss to their operations and supply chains.
Other key concepts and definitions:
Companies, under this indicator are understood as enterprises and financial institutions that are nationally recognised as being ‘large’. Alternatively, parties may choose to rely on the World Bank’s definition for SMEs and consequently of large companies. The World Bank defines SMEs as those enterprises with a maximum of 300 employees, $15 million in annual revenue, and $15 million in assets.
While companies often deliver consolidated reports at a group level, it's important to recognize that many of their impacts manifest locally, and some subsidiaries or franchises produce their own sustainability reports. For the purpose of this indicator, both the group and subsidiary/franchise levels can be counted as distinct entities. Therefore, when using the term "company," it can refer to either the parent company or a franchise/subsidiary, depending on how they disclose information on biodiversity-related risks, dependencies and impacts.
Disclosing, is understood for this indicator as the act of making information available to the general public and stakeholders, in a clear and transparent manner. In this context, it means making information publicly available about a company’s impacts and dependencies on biodiversity, and its risks from biodiversity loss.
(OECD, Biodiversity: Finance and the Economic and Business Case for Action, 2019)
Dependencies are aspects of environmental assets and ecosystem services that a person or an organisation relies on to function. A company’s business model, for example, may depend on the ecosystem services of water flow, water quality regulation and the regulation of hazards like fires and floods; provision of suitable habitat for pollinators, who in turn provide a service directly to economies; and carbon sequestration. (Sources: TNFD Glossary of Key Terms, version September 2023, and adapted from Science Based Targets Network (2023) SBTN Glossary of Terms )
Impacts refer to a change in the state of nature (quality or quantity), which may result in changes to the capacity of nature to provide social and economic functions. Impacts can be positive or negative. They can be the result of an organisation’s or another party’s actions.
(Sources: TNFD Guidance on the identification and assessment of nature related issues: The LEAP approach, version October 2023; Science Based Targets Network (2023) SBTN Glossary of Terms; Capitals Coalition (2016) The Natural Capital Protocol; Climate Disclosure Standards Board (2021) Application guidance for biodiversity-related disclosures.)
In order to be counted under the indicator, companies and financial institutions need to publicly disclose their biodiversity-related risks, impacts and dependencies on a regular basis, and in line with relevant standards, regulations and/or best practices. For example, through disclosure of risks, impacts and dependencies on biodiversity, in line with:
The computation of the indicator involves a straightforward counting process. Any entity that adheres to the "company" definition (see 5a) and that discloses its biodiversity-related risks, impacts and dependencies, per description above, is counted as a disclosing company within the context of this indicator.
Governments have various channels through which they can gather information about which and how many companies and financial institutions disclose information about their biodiversity risks, dependencies, and impacts. It's important for governments to use a combination of approaches to ensure a comprehensive overview of biodiversity disclosures within their country. Collaborative efforts with businesses, industry stakeholders, and civil society can contribute to a more robust and effective monitoring system:
For example, in France, companies send their reports to the Autorité des Marchés Financiers – AMF, to be in compliance with the energy-climate law (article 29) requiring asset management companies and financial companies (for their asset management activities) to disclose their nature-related risks, impacts and dependencies. These reports are then sent to ADEME (a public environmental institution), which makes a comparative analysis.
See section 5c.
In most countries there are no specific entities tasked with gathering and assessing all relevant information regarding the disclosure of companies' biodiversity-related risks, dependencies and impacts.
Not identified, see above.
Significant data gaps are expected, as most countries lack specific entities tasked with systematically gathering and assessing companies’ disclosures on biodiversity-related risks, dependencies and impacts, risks.
Scale of application: Global, Regional, National
Scale of data disaggregation/aggregation:
Global/ regional scale indicator can be disaggregated to national level: Yes
National data is collated to form global indicator: Yes
No
Recommended disaggregation include: By sector. Aligned with the sector classification proposed by UNCTAD and UNEP for SDG indicator 12.6.1, using the International Standard Industrial Classification of All Economic Activities (ISIC) (first level classification):
N/A
In most countries there are no specific entities tasked with gathering and assessing all relevant information regarding the disclosure of companies' biodiversity-related risks, dependencies and impacts.
Odile Conchou(odile.conchou@wanadoo.fr)
Macha Kemperman(mkemperman@worldbank.org)
Geraldo Fernandes (gwf@biodiv.com.br)
Ntakadzeni Tshidada (n.tshidada@sanbi.org.za)
Websites:
The Taskforce on Nature-related Financial Disclosures
The Science Based Target Network
Feedback: UNEP-WCMC is keen to ensure that our data is accurate and up to date. We welcome any feedback on the quality, reliability, and accuracy of the information on this site. If you see any errors or missing information, please get in touch.