The UK Government has committed to halting and reversing global biodiversity loss and land degradation by 2030. As a result, firms should expect to see a sharper focus on nature within sustainability reporting regulation.
A key driver of the UK’s approach to nature reporting regulation will be Target 15 of the Global Biodiversity Framework (GBF), which the UK agreed to adopt at COP15. The GBF sets out a number of goals and targets for Governments aimed at addressing biodiversity loss and restoring natural ecosystems. Target 15 of the GBF commits Governments to taking measures to encourage and enable businesses to, among other things, report on nature-related risks and impacts.
How will the UK advance Target 15?
The UK Sustainability Disclosure Requirements (SDR) regime will form the backbone of sustainability disclosures across the UK economy. SDR will consist of sectoral requirements, introduced by relevant regulators and government departments, that are underpinned by an overarching framework to promote consistent disclosures throughout the value chain.
A key component of SDR will be corporate-level disclosure requirements based on the International Sustainability Standards Board (ISSB) standards. The ISSB is taking a climate-first approach to its standards, with publication of its final general and climate-specific standards expected towards the end of Q2 2023. The ISSB then intends to expand its standards over time, incorporating the Taskforce on Nature-related Financial Disclosures (TNFD) Framework (which the TNFD is expected to finalize in September 2023).
SDR will also include transition planning-related disclosure requirements based on the outputs of the UK Transition Plan Taskforce (TPT), which is currently exploring how nature should be integrated into its draft Disclosure Framework and Implementation Guidance.
“Organizations that voluntarily align with the TNFD standards early are likely to find compliance with eventual UK regulatory requirements and timelines much less challenging.”
What action should you be taking now?
Until SDR introduces nature-related requirements, the Government and regulators are encouraging disclosure against established voluntary standards, including the TNFD’s draft Framework. Just as they did with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, organizations that voluntarily align with the TNFD standards early are likely to find compliance with eventual UK regulatory requirements and timelines much less challenging.
Here are three no-regret actions you can take now to prepare your business:
- Familiarize yourself with the voluntary standards: You should start to consider how to implement the draft TNFD Framework and ISSB standards, and how to integrate nature across your business and reporting processes. Where possible, you should look to build on existing practices relating to governance, risk management, strategy, and metrics and targets.
- Source the right data: You should develop a plan for obtaining the data required to disclose in line with the TNFD and ISSB standards and begin work to identify the underlying processes and governance you will need to capture that information.
- Take a holistic approach: You should use these initiatives as a lever to set your organization’s ambition around nature and develop a strategy for embedding nature-related risks and opportunities across your organization, incorporating nature into your wider sustainability transformation.
Taking these steps will place your business in a strong position to quickly align with formal regulatory requirements when they are introduced, as well as to take advantage of the opportunities presented by the move to a more nature-positive economy.
For further information and support on how to embed nature-related risks and opportunities across your business, please see PwC’s Centre for Nature Positive Business.
Guest Author: Rona Nairn is ESG regulatory and insights manager, PwC United Kingdom. Read more PwC blogs here. More: Read all guest blogs here.
