Coalition in initial sign-up phase ahead of setting actions to push firms to assess and disclose impacts and dependencies.
Eleven organisations, including several investors, have signed up to the World Benchmarking Alliance’s (WBA) nature engagement initiative, with more expected to be announced in March.
The WBA is developing a Nature Benchmark Collective Impact Coalition (CIC) to tackle companies’ shortfalls understand and disclose how they affect and rely on nature.
The CIC is currently in a sign-up phase and is open until early March for an initial set of signatories. As well as the organisations already signed up, several more are currently in the process of getting internal approval to participate. Other parties can still join the coalition at a later stage.
The WBA’s 2022 and 2023 Nature Benchmarks assessed nearly 800 firms. According to the organisation, less than 1% of the companies holistically assess and disclose their dependencies on nature, and less than 5% are doing this for their impacts on nature, despite half of global GDP being moderately or highly dependent on nature.
“At the moment, this is such a huge blindspot,” Jenni Black, Nature Transformation Lead at the World Benchmarking Alliance, told ESG Investor. “If companies can’t really understand what their relationship with nature is, how are investors supposed to make informed decisions?”
Black cited the signing of the Global Biodiversity Framework (GBF) in December 2022 as a key driver of investor requests for more detailed information about portfolio companies’ most significant nature and biodiversity-related risks, impacts and dependencies.
Encouraging “visible progress”
This is the WBA’s first nature transformation-focused CIC, but it already has put together coalitions focused on other ESG-based themes, including social, food and agriculture, and digital inclusion. The latter group is due to update its Investor Statement on Ethical AI later this month, which underpins the CIC campaign.
The core idea behind a CIC, according to the WBA, is to bring together a group of organisations including investors, with the intention of using their collective influence to transform companies’ behaviour. Members take coordinated actions to incentivise large and influential companies to improve their performance, which can be measured over time using its benchmarks.
Members of the nature-focused CIC will design actions to help incentivise or push companies to assess and disclose their impacts and dependencies. These actions could include direct company engagement, producing public statements and/or guidance to support company change, and engaging with regulators and standard setters.
The new CIC will run from 2024 until 2025. In early 2026, WBA will produce an assessment report evaluating what progress there has been, what has worked and what hasn’t, as well as outlining what the CIC will be doing next.
This autumn, WBA will produce a ‘pulse check’ of the companies it assessed in 2022 on what progress they’ve been making, including assessing and disclosing their nature-related impacts and dependencies.
The WBA has highlighted its desire for “visible progress” by the next update of the Nature Benchmark in early 2026, with the last edition released in October last year.
Black noted there has been limited progress already, with 15% of firms showing some evidence of starting to evaluate the dependencies on nature and 40% assessing their impact on nature.
Common current shortcomings include not disclosing the methodology that they’re using, their results of their evaluations, and not covering all operations.
“The CIC is not only good for the planet but we also see it as a strongly financially material topic for investors,” said Black.
“The best use of our resources is not to target those who are already on the Task Force on Nature-related Financial Disclosure early adopters list,” she added. “We [need to] identify non-engaged companies and get a decent chunk of the potential next movers started by the next time we benchmark them.”
WBA is co-ordinating with investor initiatives in the nature space such as the Nature Action 100 (NA100). A monthly call has been set up with investor network Ceres as a representative of those four core organisations organising NA100 to align and discuss progress.
The WBA’s climate CIC and Climate Action 100+ have collaborated on the elements that overlap between the initiatives, with one area of potential overlap for a nature-related collaboration in one of the six investor expectations set out by NA100 being ‘assess’.