Taking Action on Nature: A Guide to Transition Planning
The Kunming-Montreal Global Biodiversity Framework, adopted in December 2022, sets a crucial goal: halting and reversing biodiversity loss by 2030. This ambitious target has been endorsed by almost 200 national governments to date, demonstrating a global desire to tackle our escalating impact on the natural world.
This is mirrored by mounting investor pressure on corporations and financial institutions to disclose their strategies for managing nature-related dependencies, impacts, risks, and opportunities. Concurrently, regulatory frameworks such as the Corporate Sustainability Reporting Directive (CSRD) are solidifying their expectations for comprehensive nature reporting.
Responding to this evolving landscape, initiatives like the Taskforce on Nature Related Financial Disclosures (TNFD) and World Wide Fund for Nature (WWF) have developed guidance frameworks, drawing inspiration from the climate transition, to support businesses on their journey toward building high quality nature disclosures.
So, what is a transition plan?
The TNFD defines it as a breakdown of “the process of change for an organisation into a coherent set of forward-looking strategies, actions and accountability mechanisms, built into the organisation’s main business strategy.”
Transition plans are instrumental in enabling organisations to adapt their business models and value chains to environmental changes. This was evident with the emergence of climate transition plans following the Paris Climate Agreement. As investor and regulatory focus intensifies on nature, these principles are now being applied to nature reporting.
The overlap between climate and nature
The climate and nature transitions are inextricably linked. Climate change is a significant driver of biodiversity loss, with 2 degrees of global warming anticipated to cause the loss of 18% of insect species, 16% of plant species and 8% of vertebrate species.
Recognising this interconnectedness, both the TNFD and WWF support an integrated approach to climate and nature transition plans. The WWF emphasises the inherent synergy between the two, highlighting the critical opportunity for aligned solutions through transition planning.
Regulatory context
Given the strong ties between climate and nature, the development of nature transition planning frameworks leans heavily on climate transition plan guidance from initiatives like the Glasgow Financial Alliance for Net Zero (GFANZ) and the Transition Plan Taskforce (TPT). GFANZ outlines five key themes for effective transition plans:
- Foundations,
- Implementation strategy,
- Engagement strategy,
- Governance, and
- Metrics and targets.
The TPT breaks these five themes down into 19 sub-elements, each supported by specific disclosure recommendations. Underpinning these elements are the TPT’s three guiding principles Ambition, Action and Accountability.
Nature transition plans
The transition plan frameworks recently developed by the TNFD and WWF are rooted in the TPT’s three principles and use GFANZ’s five themes as the basis of their guidance. These themes have been tailored to focus on nature, as illustrated by the TNFD framework below:
- Foundations: The organisation’s overarching approach to the nature transition, encompassing scope, changes to the business model and value chains, priorities for the plan and transition financing strategies.
- Implementation Strategy: The concrete actions the organisation will undertake to align business activities, products, services and policies with the transition plan priorities.
- Engagement Strategy: How the organisation will collaborate with stakeholders to facilitate delivery of the transition plan and accelerate the economy-wide transition.
- Governance: The board and management level structures and processes in place to oversee, incentivise and support implementation of the transition plan
- Metrics and targets: The metrics and targets the organisation will employ to track progress against the transition plan priorities.
The TNFD breaks these themes down into 20 sub-topics, 16 of which are derived from the TPT framework, with four additional nature-specific topics.
The WWF also employs 19 sub-elements and incorporates an additional theme: "Monitoring, Reporting, and Verification" (MRV). MRV is intended to be applied across all other themes. It ensures accountability between internal and external stakeholders, while bridging current ambition with future actions. The WWF also provides realm-specific guidance to facilitate plan implementation.
Aligned with the CSRD, the WWF emphasises the importance of a double materiality assessment (DMA) as a foundational component of transition plan reporting. The DMA is crucial for understanding an organisation's interaction with nature and developing a credible transition plan.
As the tide shifts to a greater focus on nature reporting, as explored in this nature series, companies must not only consider their nature-related dependencies but also actively build out credible transition strategies to reduce this reliance.
Draft frameworks such as those offered by the TNFD and WWF, built upon existing climate disclosure frameworks, can guide organisations in their nature transition planning. Pursuing an approach that incorporates established principles from GFANZ and the TPT will empower your organisation to develop a more cohesive climate-nature transition plan, establishing a robust foundation for your nature reporting.
If you’re interested in discussing how any of the topics covered across our nature reporting series may impact you, please reach out to a member of our team for a confidential conversation.
Kelly Schoolcraft-Wills, Head of Sustainability and Corporate Communications: kelly.schoolcraft-wills@designbridge.com