Getting back to nature: it’s time to put nature at the heart of net zero planning, and here’s how to start.
Getting back to nature: it’s time to put nature at the heart of net zero planning, and here’s how to start
Gemma James and Rebecca Drury, Chronos Sustainability
Climate change and nature loss are inextricably linked and need to be tackled together. Considering them in isolation can lead to unintended consequences and missed opportunities. There are co-benefits of addressing these crises together but also potential trade-offs. We have worked with WWF to identify why and how nature should be integrated into net zero transition plans. Without the inclusion of nature, transition plans are incomplete.
But it’s not easy, and perhaps the biggest barrier is knowing where to start. How do you actually integrate nature in practice?
Here are three things that we are thinking about and welcome further views:
1. Integration is happening.
Transition planning disclosure frameworks are already reflecting nature to an extent. The Transition Pathway Task Force (still under consultation) and GFANZ real economy and financial sector frameworks both recognise the interdependencies of climate and nature and take into account not only nature’s role in providing climate solutions and carbon credits, but also the importance of impacts on nature from decarbonisation activities and the actions taken to safeguard it. Whilst not a fully comprehensive integration of nature, this is a good starting point.
Some corporates are disclosing on the interlinkages between nature and climate:
- Nestlé, for example, explicitly identifies forests and avoiding deforestation as part of its net zero strategy. Nestlé’s Net Zero Roadmap outlines its emissions reduction ambition which includes emissions reductions from dairy and livestock and soil and forests, with 25-35% of its total ingredient emissions coming from the conversion of natural landscape. Nestlé committed to 100% deforestation-free supply chains by 2022 for palm oil, pulp and paper, soya and sugar and by 2025 for coffee and cocoa as part of its Net Zero Roadmap and Forest Positive strategy. The company also has goals to use nature-based solutions to remove 13 million tonnes of CO2e from the atmosphere through agroforestry, silvopasture and restoration.
- Severn Trent Water is dependent on nature but is exposed to climate physical risks. It reports on safeguarding and investing in nature to build its resilience in addition to its climate mitigation efforts. Examples of targets set are restoring 2000 acres of peatland restoration by 2025 and creating and improving at least 5,000 ha of biodiversity by 2027. They also report on actions in terms of planting trees, restoring moorland, bog and peatland restoration and establishing wildflower meadows to manage the impacts of climate change and sequester carbon.
2. Implementation will be a staged approached.
This is not to say that integration is easy. However, a practical first step is to understand nature and the relevance to your business or financial portfolio. Assessing impacts and dependencies on nature is a starting point for understanding exposure to nature related risks and opportunities. The TNFD LEAP process (Task Force on Nature Related Financial Disclosures, Locate Evaluate, Assess, Prepare) is a usable prototype that can be used to make this assessment.
Using a staged approach means that corporates and financial institutions are not expected to achieve full integration and getting to nature positive in transition plans straight away. It should be recognised that there will be challenges with gathering nature-related data and identifying the right indicators as frameworks like TNFD evolve. For example, for investors, this may come in the form of with data format, consistency and coverage. Using the existing GFANZ and TPT frameworks as a plug and play model provides a starting point for first identifying where impacts on nature might occur and how to safeguard it.
3. There are existing tools and knowledge to get started.
Whilst implementation will be challenging, we wanted to flag some tools that already exist for corporates and financial institutions that could help with integration. To assess exposure and materiality of nature loss, in addition to the TNFD LEAP approach mentioned above, tools such as ENCORE and the Science Based Targets Network Materiality Tool can help identify impacts and dependencies of activities on different components of nature. For corporates, the SBTi-FLAG methodology was also released for companies with high emission land use. There many more listed in the guide.
Nature is a nascent topic in comparison with climate and companies and financial institutions are still learning in parallel with the development of nature related disclosure frameworks. Whilst the landscape is evolving, an understanding of available metrics and disclosure requirements are become more apparent, and there is enough information out there to begin to understand nature and its interlinkages with climate.
At Chronos, we are mapping out the key challenges to starting on integration, and identifying the actions that companies and investors are taking to overcome these barriers. We’ll collate views and continue to share insights as integration develops.