By incorporating nature-related considerations into their strategic planning, board directors can capitalise on opportunities from the nature-positive transition and address significant hidden financial risks associated with biodiversity loss and ecosystem breakdown. 

This report explores how companies are currently integrating nature considerations into their strategies, by analysing the Nature Benchmark: a 2022 – 2023 study completed by the World Benchmarking Alliance assessing 769 companies.
 

Key findings from the Nature Benchmark include:

• 68% of companies have designated persons or teams responsible for the implementation of the sustainability strategy 
• 65% of companies assign decision-making and oversight responsibilities for sustainability to their highest governance bodies 

However, only

•  7% of companies link performance criteria in senior executives’ remuneration policies to targets and objectives which cover nature and social issues 
• 1% show evidence that their highest governance body has expertise with respect to the company’s most material sustainability topics

The findings from this report emphasise the need for organisations to develop a more coherent approach to understand and address their nature-related impact and dependencies.  Board directors have a duty of care to promote the success of their organisations, including through evaluating potential risks and keeping on top of the appropriate regulation. But they also have the ability to create business viability and reputational value by turning these regulatory transition risks into an opportunity to exploit new markets, innovate and adopt agile approaches to maximise their ability to navigate the ever changing global markets.

The key takeaways for board directors from this report include:

• By using structured methodologies to evaluate and manage nature-related issues, such as the Taskforce on Nature Related Financial Disclosures’ (TNFD) LEAP approach, organisations are able to more holistically approach and assess their impacts on nature and more reliably address risks to the company’s overall success.
• Source sustainability training for the board, executive and management teams to allow for board oversight of nature risks and demonstrate strong leadership by achieving a positive attitude towards the net zero transition.
• Review the company’s current practices to assess biodiversity dependencies and impacts, which will help you to understand and manage the material risks to your company and seize opportunities.

Read the full report from the Commonwealth Climate and Law Initiative, the Climate Governance Initiative and the World Benchmarking Alliance, which analyses 6 indicators from the Nature Benchmark, sharing the current practise of companies with respect to nature and biodiversity indicators and the role of board directors.

About the authors

The World Benchmarking Alliance is a non-profit organisation holding 2,000 of the world’s most influential companies accountable for their part in achieving the Sustainable Development Goals. It does this by publishing free and publicly available benchmarks on their performance and showing what good corporate practice looks like. The benchmarks provide companies with a clear roadmap of what commitments and changes they must make to put our planet, society and economy on a more sustainable and resilient path. They also equip everyone – from governments and financial institutions to civil society organisations and individuals – with the insights that they need to collectively build corporate accountability.
The Commonwealth Climate and Law Initiative is a global non profit legal research and stakeholder engagement initiative. We produce legal research and practical tools on how to integrate the risks and opportunities of climate change and biodiversity loss into corporate and investment governance, in order to minimise the risk of personal liability for directors, officers and investor fiduciaries, and maximise near term efforts in the transition to a sustainable economy. We work to advance knowledge on effective sustainable governance practice.

The Climate Governance Initiative is a non-profit dedicated to mobilising boards to accelerate the transition to net zero and build climate resilience. We exist to develop and support a global network that mobilises chairs, non-executive and independent directors to take climate action by enhancing their knowledge and skills in climate governance. We are a rapidly growing global network with Chapters in over 70 countries worldwide, reaching more than 100,000 board members. The Climate Governance Initiative is developed in collaboration with the World Economic Forum and our work builds on the Forum’s Principles for Effective Climate Governance.