Commitments made at COP26 are positive signals, but evidence suggests corporate action is yet to match ambition, writes CDP’s Thomas Maddox

Amidst the plethora of commitments and announcements, one thing was resoundingly clear throughout the two weeks of COP26: for the first time, the role of nature in tackling climate change was a clear theme. This followed landmark assessments by the IPCC and the IPBES, where scientists stressed that the climate crisis cannot be tackled without protecting and restoring natural ecosystems.

COP26 was a hub for political and financial commitments aimed at protecting and restoring nature, especially forests. The Glasgow Climate Pact provided welcome recognition for the role of forests in climate change mitigation and reducing vulnerability. But the most promising outcomes came from outside the official negotiations.

Spearheaded by the Glasgow Leaders’ Declaration on Forests and Land Use, as part of which 141 countries, representing over 91 per cent of the world’s forests, committed to work together to halt and reverse forest loss and land degradation by 2030, national governments demonstrated unprecedented intent to realise the potential of forests to mitigate climate change.

Companies followed suit. Leading retailers and producers committed to remove deforestation, forest degradation and conversion from key commodity supply chains, while supporting sustainable forest management, conservation and restoration, and 12 of the world’s biggest global agricultural trading and processing companies committed to enhancing supply chain action consistent with a 1.5°C pathway. However, for those commitments to have the promised transformative power, how, and how fast, they translate into tangible action will be key.

For over twenty years, CDP has demonstrated how corporate reporting of comparable and consistent environmental information is the foundation of transformative action. It can help accurately account for both risks and impacts of economic activities and in so doing, support the transition to more forest-positive operations. This information is essential in helping investors, large buyers, policy actors, civil society and consumers make smarter decisions, drive innovation and increase their expectations of companies with respect to their environmental performance. This in turn compels companies to act. Environmental disclosure is a fundamental tool for tracking progress against countries national commitments towards a net zero, sustainable economy.

Whilst the commitments we are seeing are positive, a recent report by CDP and IUCN shows that companies are still falling being in reporting and acting on environmental risks beyond climate. The report shows that, while companies are largely aware of how wider environmental issues may pose risks to their operations, businesses still need to do more to fully incorporate nature-related considerations in their assessments and reporting of environmental risks, opportunities, impacts and responses. Progress is being made in some areas, such as deforestation and water security, but in the future companies need to be ready to take a much more holistic approach to understanding and addressing environmental impacts

There are many positive examples of ambitious companies taking action considering and integrating the well-being of nature and local communities within their operations. For example, Suzano Papel & Celulose, a Brazilian paper and pulp company, has reported a total of 32,855ha of restored forests in its restoration projects. However, for those initiatives to become the rule rather than the exception, science-based, ‘nature-positive’ business strategies are required, as well as the application the best available international standards and guidance for ecosystem-based approaches and enhanced policies to ensure more and better corporate environmental disclosures.

At CDP, we’re also deepening our engagement to help further tackle climate and ecological emergency. Our global disclosure platform has been a pioneer on climate reporting and is gearing up to also lead on corporate reporting on nature. Since 2019, we have seen a 35 per cent increase in the number of disclosers to the water questionnaire, with 3,300 companies now disclosing on water. Disclosures using CDP’s forests questionnaire have been consistently growing, reaching 865 companies in 2021, from 543 in 2019.

Alongside this increase, the forest questionnaire has been evolving to capture a broader range of themes, introducing forest restoration, piloting questions on biodiversity and landscape and jurisdictional approaches. This evolution of CDP’s disclosure system reflects a more holistic understanding of the impact of the private sector on forests and aims at strengthening the ability of companies to fulfil the commitments announced at COP26 Moving forward, CDP recognises that environmental disclosures need to present a more holistic coverage of impact. We need to be moving beyond climate, water and forests towards a nature-positive future that includes aligning with 1.5 degrees and investing in ecosystem health.

So, we need to go further and faster. COP26 marked the start of what should be an increased focus on nature. As we look towards the CBD COP15 in April, its nature-focused sister summit, we can expect increasing focus on corporate disclosure on nature. More countries and regions, including the EU and Switzerland are moving towards the implementation of mandatory environmental disclosure regulation that incorporates more than just climate impacts. Now is the time to get ahead of any future regulation by setting targets, and tracking progress by disclosing through CDP. If your business is to ever be truly sustainable, nature must be part of your strategy.

Thomas Maddox is global director of forests and land at carbon disclosure non-profit CDP.

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