COP15, known in full as the 15th meeting of the Conference of the Parties to the UN Convention on Biological Diversity, was held in Montreal this past December, uniting 10,500 delegates and 13,500 observers to discuss the escalating loss of biodiversity worldwide and the need for governments and businesses to pay careful attention. The outcomes of this international summit are sparking critical conversations across public and private sector organizations.
The guest list was comprised of representatives from 188 world governments, as well as industry leaders, civil society groups, Indigenous Peoples, scientists, media and representatives from business and finance, the latter of which included myself and several international KPMG colleagues. Over 13 days, we packed meeting rooms and crowded hallways to discuss the impacts and potential solutions to this growing environmental crisis and initiatives to limit future biodiversity loss.
Among the most significant actions to emerge from COP15 was the launch of the Kunming-Montreal Global Biodiversity Framework (GBF), a landmark biodiversity agreement which outlines 23 target achievements and four overarching goals that, among other objectives, aim to reduce biodiversity loss and protect 30 per cent of land and oceans by 2030. As Elizabeth Mrema, Executive Secretary of the Convention on Biological Diversity, aptly noted in her address: "Clearly the world is crying out for change, watching as governments seek to heal our relationships with nature."
Answering the call
COP15 signaled an urgent call for action to prevent biodiversity loss, and organizational leaders in both the public and private realms are committed to being part of the response. Indeed, what sets the decisions made at COP15 apart from previous biodiversity protection pledges is that the private sector is expected, more than ever, to play a pivotal leadership role. It’s an opportunity that is estimated to generate US$10-trillion in new business, and we should embrace it. Here are some ways your organization can prepare for and participate in the changes to come:
Ask the right questions: Organizations will likely be asked to be more detailed, targeted and transparent about their relationship with, and dependencies on, natural systems. To get ahead of expected reporting requirements and greater stakeholder scrutiny, it helps to ask key questions, such as:
- How does nature factor into your climate strategy? A common theme emerged from COP15 and the COP27 climate conference: these two challenges are deeply interrelated—for example, climate change is a leading driver of biodiversity loss, and nature plays an important role in limiting the atmosphere’s level of greenhouse gases. A robust climate change strategy will need to factor in biodiversity and nature-based solutions more broadly, including limiting potential negative impacts (e.g., through the extraction of metals required for the energy transition).
- What is your impact and reliance on nature? All companies operate within natural ecosystems and have an impact on them. For companies to remain competitive, it’s more important than ever to understand the physical and transitional risks your operations may be exposed to through deterioration of these ecosystems, as well as the broader positive and negative impacts your organization has on biodiversity. It is also important to recognize that these impacts may be indirect, such as the the impacts resulting from the financing activities of investors and lenders.
- How are you reporting your impacts? Resolutions out of COP15 have called for stronger and more transparent biodiversity reporting. This will likely be new to your organization. Do you understand the developing reporting frameworks? Do you know what you’ll be expected to report on, and how you will do so with accuracy and transparency?
Follow the Task Force for Nature-Related Disclosures (TNFD): Broadly endorsed by the global finance community, it’s set to complete in September 2023 and will sit alongside the Taskforce on Climate-related Financial Disclosures (TCFD) to provide consistency and trust amongst sustainability reporting standards to help companies and stakeholders read exchange information based on a consistent framework.
Take cues from Indigenous communities: The knowledge and perspectives of Indigenous representatives have been critical to the COP 15 proceedings and setting a direction for the future. Protecting the Earth and its biodiversity has been a central tenet of Indigenous culture for millennia, offering a wealth of insights, strategies and wisdom. When you think about your approach to nature, examine how developing an Indigenous reconciliation strategy would be informative and an integral part of your journey.
Our firm is among those listening. In KPMG in Canada’s own efforts to amplify Indigenous voices, we’ve pledged to provide $500,000 in pro bono consulting fees to support projects led by Indigenous organizations that will have an impact on the protection of nature and biodiversity.
Gain a first mover advantage: One way or another, organizations will feel the impact of the biodiversity commitments from COP15. Organizations have the option of overlooking these changes until it's too late, or acting now. Importantly, those who act now will have a first-mover advantage in their marketplace and gain competitive advantage by becoming a supplier/partner of choice.
Impacts on reporting
With the Global Biodiversity Framework comes a sizeable shift in how governments will be expected to track and measure biodiversity commitments. This will, in turn, lead to new standards, rules and regulations concerning the way private and public sector entities measure and report on their biodiversity impacts. Already, the International Sustainability Standards Board (ISSB) has established plans to increase transparency in biodiversity reporting within its own standards, and more new standards are coming quickly.
The TNFD is likely to become a foundational framework for standards development. Compared to TCFD reporting for climate, however, companies should be aware that complying with biodiversity regulation and disclosures is poised to be even more complicated. Climate has clearcut universal metrics to measure progress in emissions reductions, but biodiversity and natural capital do not have an obvious single basis for measurement.
Changing the narrative
For many, COP15 was a call to action. For me, it was a reminder that very real and existential issues need to be addressed today to leave the next generation with a world they can live and thrive in. I know from personal experience that young people are increasingly anxious about climate and biodiversity challenges. They can speak of climate change with a sense of helplessness, a natural reaction to the headlines we see every day.
But we are not helpless. Far from it, in fact. Putting the outcomes of COP15 into action will be complex and, for some, costly—but necessary.
With more than 50 per cent of the world’s GDP moderately or highly dependent on nature, it’s time for companies to assess their dependency on nature, understand the risks and opportunities, and embrace a positive relationship with nature as a vital component of their overall sustainable business strategy.
COP15 has triggered many countries to invest in changing the story about nature loss. Now that the word is out, it's time for all stakeholders to decide how they want to write their own chapter.
Because nature is everyone’s business.
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