CDP calls on governments to use increasing nature disclosures at COP16

The number of companies reporting on their nature impacts has jumped by 43% since the signing of the Global Biodiversity Framework, and CDP wants governments to use this new data for action.

The Kunming-Montreal Global Biodiversity Framework (GBF), signed in 2022 at the UN biodiversity summit known as COP15, is an agreement signed by 195 countries to halt biodiversity loss and restore natural ecosystems around the world.

It is composed of four global goals and 23 targets, including the creation of policies to encourage businesses to assess and transparently disclose their risks, dependencies and impacts on biodiversity – and CDP believes that many businesses are ready to report this type of data.

In the year after the adoption of the GBF, the number of firms disclosing biodiversity data grew by 43%, while water and forest disclosures increased by 23% and 10%, respectively. Overall, companies worth a third (33%) of global stock markets now report water data through the disclosure platform.

“Nature supports our entire economy, so every business must understand how they depend on it, what the risks are, and then act quickly. Our data shows we are seeing more and more companies coming alive to this, bringing nature into the boardrooms,” said CDP CEO Sherry Madera, calling on governments at COP16 to “use this data in their national plans, set up effective tracking, and reward the businesses that lead the way”.

French biodiversity fund launched at COP16 will use CDP data

The reporting platform is also supporting investment in nature and biodiversity protection.

This week at COP16, asset manager Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable finance, was selected to manage a new €100 million fund created by 11 French institutional investors to invest in  biodiversity solutions and companies transitioning to nature-positive business models.

The fund will use CDP biodiversity data to invest in companies that offer solutions to combat biodiversity loss, but also those in high-impact sectors “showing credible signs of transition”, CDP explains.

Freshwater: Disclosures drive reductions in water use

CDP data also shows a 20% increase in the number of companies (around 1,800) assessing the impact of their value chains on biodiversity, which “further demonstrates the growing momentum towards transparency and accountability”, the organisation says.

24% more companies also assessed their water dependencies in 2023 than in 2022, contributing to an overall 22% reduction in corporate water use. This result suggests that transparency drives tangible action towards freshwater security.

“Strong data is key to hitting the 2030 targets and driving change across the economy. As the world's data platform, CDP has been driving comparable information on biodiversity for over 15 years, and we know how disclosure drives better decisions. The Global Biodiversity Framework rightly highlights the role of corporate reporting in pushing action,” added Madera.

‘Blind spots’ in corporate understanding of nature dependencies

Despite recent progress, the data also reveals what CDP calls ‘blind spots’: fewer than one in 10 companies assess their business dependency on biodiversity, despite the fact that biodiversity loss is estimated to cost the global economy between US$4 and US$20 trillion annually.

Additionally, companies are still struggling to understand the financial impact of nature-related risks and dependencies: while many companies have identified business risks related to water and forests, for example, only half of these reported risks include a financial impact figure.

A minority of banks and investors report financing nature-based solutions (17%) or sustainable agriculture efforts (23%).

"Agreeing mandatory assessment and disclosure of nature at CBD COP15 was a landmark moment, but now comes the hard part. At COP16 we need to see governments and businesses pick up the pace. Governments must introduce ambitious regulations and policies that will unlock corporate nature action. For businesses, the good news is that there is accessible and streamlined guidance to report on their nature-related impact and dependencies through CDP, and ensure that they are contributing to a nature-positive economy," said Eva Zabey, CEO of Business For Nature.