How To Stay Ahead of Global Industry Trends and Manage Your Business’ Impact on Nature and Biodiversity

A Guide to the Taskforce on Nature-Related Financial Disclosures

More than half of global GDP — $44 trillion of economic value generation — is moderately to highly dependent on nature and its services. We need nature and its resources, but our demand is outpacing the supply — humans are currently using the equivalent of 1.75 Earths to maintain our current way of life.?

Businesses are being called upon to disclose and mitigate their impact on biodiversity.? To do so, many have turned to sustainability reporting frameworks. However, the recent focus of environmental reporting and regulations has been on mitigating climate change, specifically atmospheric change. Most of these frameworks, including the Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI), are solely focused on disclosure of climate metrics like greenhouse gas emissions and energy usage.?

While also vitally important, climate issues do not encompass all of the risks and opportunities intertwined with nature as a whole. Nature and environmental risks include loss of biodiversity and degradation of local ecosystems, while climate risk is an interdependent but distinct issue at the global level. Greenhouse gasses travel while nature stays within communities.

Human activities, particularly land-use change, risk the ecological foundations of our global economy and threaten the stability of life on Earth. From an economic perspective, $10 trillion in global GDP could be lost by 2050 if ecosystem services, such as pollination and water purification, continue to decline. For the environment, ecosystem services declining would mean the systems and functionalities that keep our planet and its inhabitants thriving would suffer.?

Enter the Taskforce on Nature-related Financial Disclosures (TNFD) . With the honey bee as their mascot, the TNFD is the first framework specifically designed for biodiversity and nature-related issues. Unlike other frameworks, it doesn’t stop at disclosure; it asks for narrative responses on how companies manage risk, create related strategies, and construct proper corporate governance related to not only reducing harm, but actively protecting our at-risk planet.

Similarly to its predecessor, the Taskforce on Climate-Related Financial Disclosures (TCFD), the TNFD guides corporations through analysis of these metrics to determine appropriate action in response to the learnings from their reporting.?

A complicating factor for developing disclosures on nature-related risks is that there is no equivalent to simple metrics, such as global temperature or greenhouse gas emissions, that have helped galvanize efforts to tackle climate-related risk. Nature-related risk entails a more complex array of factors and is more localized, and mitigating efforts have to be individually tailored to match the unique conditions and needs of each location.?

For an agricultural poultry company, for example, past risk assessment would look like assessing the health of their poultry, the cost of shipping and transport, and the cost of corn and soybeans. The TNFD will have them dive deeper, such as looking at the effects of the corn production on the ecosystem it is grown in. From there, the framework calls for the corporation to strategize and set targets in place for efforts to offset the negative impacts and contribute to the restoration of the biodiversity and health of the ecosystem. But TNFD casts a much wider net than agriculture - reaching hundreds of corporate early adopters, including some of the world’s largest financial institutions such as 美国银行 , Standard Charter Bank, and 法国巴黎银行 .?

The TNFD addresses the individualized factor of assessing nature-related risks by providing new guidance using the LEAP approach – Locate, Evaluate, Assess, Prepare. The Prepare step in particular is where corporations will determine what strategies and resources should be applied as a result of their analysis, along with how they will set targets and define and measure progress.?

Pranay Kejriwal , former Senior Sustainability Consultant at 玛泽咨询 , says, “the TNFD focuses on location of assets, dependencies, and impacts, rather than just risks and opportunities … and stakeholder engagement is a very central part of the TNFD and its recommendations."

"From an internal and external perspective, it’s very important for stakeholders [investors, employees, and customers] to connect with our true dependencies on nature and its resources.” - Pranay Kejriwal?

As of January 2024, 320 organizations from over 46 countries, representing $4 trillion in market capitalization, have committed to start making nature-related disclosures using the TNFD framework; S&P Global , 索尼 , and 宜家 are among these early adopters.?

While the TNFD and many other frameworks are not mandatory yet in the US, we believe it’s only a matter of time. Look at Europe — in 2023, the EU enacted the Corporate Sustainability Reporting Directive (CSRD), which requires businesses to disclose their environmental and social risks, opportunities, and governance. In order to be competitive and stay ahead of global industry trends, US businesses should be preparing for a not-so distant future, where climate action is no longer an option.?

The landscape of biodiversity reporting standards is continuing to evolve right as innovative approaches to monitoring biodiversity are in development. In recent years, environmental DNA (eDNA) technology has shown great potential as a novel approach to biomonitoring. It not only processes exponentially more data in less time, giving it an advantage in terms of cost and efficiency, but it also provides a more accurate and thorough look at an ecosystem’s composition compared to traditional methods.?

In 2016, The Best Bees Company developed a way to test for the identification, abundance, and diversity of the plant species honey bees foraged from to produce an individual sample of honey. We called it HoneyDNA, and officially trademarked and patented it in 2023.?

This method of genomic sequencing of the pollen foraged by honey bees also reveals the presence of rare or invasive plant species, the quality of native plant populations, changes in plant life-cycle events, and biodiversity levels in the bees’ environment.?

In addition to its environmental monitoring prowess, HoneyDNA can also serve as a guide in restoration efforts for areas devastated by natural disasters or extreme weather events. As published in the Journal of Emerging Investigators , we studied HoneyDNA samples from beehives before and after natural disasters, such as Hurricane Maria in Puerto Rico, and found that native plant populations bounced back first.

?Beehive health across the network of data-yielding beehives at Best Bees client home gardens, business roofs, and institutional campuses across the U.S. showed those thriving year over year were associated with an abundance of native plant biodiversity, as revealed through our HoneyDNA technology. Best Bees is incredibly well positioned as the leading service vendor for corporations seeking to aggregate data on biodiversity to support reporting on new sustainability measures for frameworks like TNFD.

In addition to insights gleaned from HoneyDNA, Best Bees’ bee health data also helps in assessing the status of a given environment. Honey bees are an indicator species; they reflect the condition of their ecosystem and any changes made to it.?

We can observe evidence of environmental pollution and pesticide use in honey bees’ mortality rates, cognitive functioning, and birth defects. These and other factors (such as reproduction rates and honey productivity) reveal patterns over time that provide insight into stress from influences like biodiversity loss and climate change.?

Given that honey bees have the capacity to inform, guide, and assist in measuring our efforts to mitigate biodiversity loss, it seems appropriate that the bee is the mascot of the TNFD. Many of our clients, such as Excel Dryer , Expedia Group , and Simmons University have already made research beehives as?a tangible representation of their larger sustainability programs.??

?“If we acknowledge that ‘business as usual’ is no longer an option and that nature needs to be brought into the heart of business and financial decision making, then we need a new mascot,” TNFD Executive Director Tony Goldner told a packed audience at the launch of the TNFD during New York Climate Week.

“At the TNFD, we have embraced the bee, an essential provider of prosperity through its pollination services.” - Tony Goldner, TNFD Executive Director