Scientists are calling for legislation to strengthen companies’ disclosure of biodiversity information

An international panel of experts is calling for a regulatory approach to ensure the effectiveness of business disclosures under the Kunming-Montreal Global Biodiversity Framework (KMGBF), a landmark agreement ratified by parties to the Convention on Biological Diversity that sets ambitious goals to combat biodiversity decline.

The KMGBF also sets out actions that need to be implemented by 2030 to achieve these targets by 2050. Among its many key objectives is encouraging companies and financial institutions to disclose risks, dependencies and impacts on biodiversity.

However, experts noted the limitations of the current goal, including the voluntary and non-standardized nature of the information disclosed. Scientists argue that such an approach, mainly driven by businesses, may put short-term financial interests ahead of mid-level protection and restoration of biodiversity. Ambiguous disclosures, often of low quality, are more likely to conceal than mitigate biodiversity loss.

Taking biodiversity into account in decision-making.

The study was published in the journal Conservation letters and led by the University of Newcastle in collaboration with experts from the International Union for Conservation of Nature (IUCN) and the Church of England Pensions Board.

Drawing on a broad range of expertise, researchers recommend a regulatory approach, supported by a scientific commitment to developing disclosure standards and related policy indicators. They argue that this will ensure that the emerging response to the KMGBF’s disclosure target (target 15) avoids negative impacts and instead delivers positive impacts for biodiversity.

Additionally, this approach can provide differentiation for investors, reduce the likelihood that biodiversity impacts are treated as an externality and form part of the ‘accountability architecture’ surrounding business activities.

Lead author of the study, Dr Louise Mair, a NUAcT researcher at the University of Newcastle’s School of Natural and Environmental Sciences, said: “Simply measuring the change in the number of companies disclosing information on biodiversity risks creating a false sense of progress and may even hide negative impacts on biodiversity if the content and quality of disclosures are not ensured. We need a more nuanced approach to measuring progress that explicitly takes into account the changing impact of economic activity and financial flows on biodiversity.”

“To achieve the goals of the Global Biodiversity Framework, companies and their investors must integrate biodiversity into their decision-making. The threats and dependencies associated with biodiversity mean that only a systematic approach to providing good information makes sense; “In this article we argue that corporate disclosure should be required, consistent and based on conservation science,” added Dr Stephen Barrie, deputy director for responsible investment at the Church of England Pensions Board.

Juha Siikamäki, IUCN Chief Economist, said: “Stopping and reversing biodiversity loss requires aligning all economic activity and financial flows with nature. The private sector’s contribution to achieving this goal will be key, and it is critical that it is consistently measured and transparently disclosed using scientifically sound and standardized indicators.”

Reference: Mair L, Elnahass M, Xiang E et al. Corporate disclosures require a focus on biodiversity outcomes and regulatory support to achieve global environmental goals. Keep Lett. 2024:e13024. doi: 10.1111/cont.13024

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