Interested? Contact us now
In order to contact us please fill the form on the right or directly email us at the address below
sales@senecaesg.comby
Alexander Olding
- February 5, 2024
In response to the growing threats posed to nature by human activities, the Global Reporting Initiative (GRI) unveiled its revised Biodiversity Standard last week. This important update which falls with […]
In response to the growing threats posed to nature by human activities, the Global Reporting Initiative (GRI) unveiled its revised Biodiversity Standard last week. This important update which falls with the GRI:101 standards, aims to establish a key benchmark for accountability and corporate transparency regarding biodiversity impacts. By doing so, these standards will empower companies to fulfill the escalating demands from a diverse array of stakeholders and investors seeking comprehensive information on the impacts of their operations and investments on biodiversity. The standard will cover: Full transparency throughout the supply chain, Location-specific reporting on impacts, New disclosures on the direct drivers of biodiversity loss and requirements for reporting impacts on society.
For instance, the importance for implementing the Biodiversity Standards becomes evident only this past week with an incident in the Brazilian Amazon, where a discharge of toxic foam, used in detergent production, occurred in the Rio Seco [1]. Freshwater ecosystems by nature are sensitive ecosystems which serve as important regulators for both marine and terrestrial environments. While the disposal of toxic waste into water systems may appear acceptable to industrial plants, manufacturers, or chemical transporters in the short term, the long-term repercussions have the potential to break down entire food chains and put at risk the species that depend on it, including human beings. [2]
The revised GRI Standard builds specifically on strengthening environmental strategy to prevent events like this occurring. The Standard has been recognized for taking key components from the UN Kunming-Montreal Global Biodiversity Framework (GBF) which supports the achievement of the Sustainable Development Goals (SDGs), the Science Based Target Network (SBTN) which is a collective effort by more than 45 private companies to develop methods and resources for better informed decision for climate and nature for cities, and most importantly, the more recent release of the Taskforce for Nature-related Financial Disclosures (TNFD) which is an international initiative building off of the Taskforce for Climate-related Financial Disclosures (TCFD) to bring more focus and attention to a business impacts and risks on the environment including company dependencies and impacts on fresh and salt water ecosystems. [3]
Regarding industries affected, the new GRI Biodiversity Standards are expected to impact food and agriculture, mining, oil, and other key industries with a heavy land and water footprint. The standards outline 8 categories that companies with the strongest footprints will need to address. Some of those include and cover aspects such as biodiversity policy, commitments, and impact management approaches. In contrast, other nature frameworks like the TNFD offer companies the flexibility to choose the specific issues they wish to disclose.
Over 14 outlined disclosures within the TNFD for instance are available to disclose against, in areas such as distributed land area, which companies are recommended but not obligated to report on. Meanwhile, GRIs more stringent approach holds the potential to enhance transparency and accountability in the biodiversity space, provided companies choose to align with it.
Moreover, four-in-five of global companies choose to report with GRI due to its renowned reputation for being the global provider of the first and foremost global standards for sustainability reporting. Research from KPMG in 2022 concluded an increased adoption of the GRI standards, with 78% of the largest 250 companies globally utilizing GRI. Moreover, GRI emerges dominant in regions like Asia with 68% adoption, 75% in the Americas and 62% in the Middle East and Africa. [4] All of this is greatly beneficial for the Biodiversity Standards as current users are very likely to position themselves strategically and prepare for disclosure against the revised standard.
Contentious Topics: Supply Chains and Biodiversity Offsets
While the revised Biodiversity Standards from GRI introduce new best practices for measuring and managing biodiversity loss, during the public consultation process, three contentious topics emerged amongst stakeholders. The standards will demand information on location-specific impacts and their effects on communities, however, businesses, civil society members and technical experts expressed their concerns with obtaining data from suppliers beyond the first tier as the standards request companies to report supply chain impacts at a country level while encouraging disclosure of more granular location data. [5]
To address these concerns GRI has ensured it provides additional guidance on how to identify the most significant impacts, building on recent frameworks such as the SBTN and TNFD which have been included in the standard. Moreover, GRI has stressed its commitment to reviewing the requirements to report on supply chain impacts and state of biodiversity to ease the reporting challenges while keeping in line with the requirements of the GBF. [6]
Another area of concern were the announcements made on Biodiversity Offsets. The new standards by GRI encourage companies to disclose their offsetting practices to stimulate a more refined view and understanding on how different industries use offsets in different ways according to the identification of best practices. Nonetheless, while companies are required to provide information on offset goals, geographic location, principles, and third-party certifications or verifications, concerns around the alignment with broader ecological considerations exist. [7]
Finally, on the prioritization of key impacts, acknowledging the impossibility of reporting on all biodiversity impacts, the Biodiversity Standards from GRI focus on the most significant ones and offers guidance to support concerns expressed by stakeholders when it comes to prioritization. However, the guidance emphasizes that companies cannot choose to omit reporting on material topics entirely, distinguishing itself from other frameworks.
In recent years, efforts have been made by standard setters and governments to adapt the reporting infrastructure used for the climate crisis to tackle the biodiversity crisis. This initiative taken by GRI seeks to swiftly achieve the Global Biodiversity Framework’s 2030 goals, including restoring 30% of the world’s degraded land. The rapid development of new frameworks, such as the TNFD too, in addition to other policies, and tools, however, has overwhelmed companies. So it appears, that in the general ESG reporting space, the challenge of standardization is emphasized clearly.
Thus, in response to the inundation of new Biodiversity related standards, GRI has opted for a more collaborative approach with the TNFD, SBTN and GBF. The revision of these standards highlights the importance of these entities working closely together to align and reinforce their distinct roles and goals.
To provide further clarity, the UN Environment Programme (UNEP) has released an analysis comparing the scope, materiality definition, and supply chain coverage of major nature-related assessment and disclosure frameworks and standards. Scheduled to take effect on January 1, 2026, the Biodiversity Standards provide a transition period for companies to adapt to the new standard. Nonetheless, for companies with the capacity and eagerness to commence disclosure, there exist no limitations preventing them from initiating the reporting of their impacts on biodiversity.
Sources
[2] https://blog.idrenvironmental.com/chemical-waste-that-impact-on-aquatic-life-or-water-quality
[5] https://www.greenbiz.com/article/newest-biodiversity-reporting-standard-what-you-should-know
[7] https://www.sciencedirect.com/science/article/am/pii/S0921800918308905
Start Using The Seneca ESG Toolkit Today
Monitor ESG performance in portfolios, create your own ESG frameworks, and make better informed business decisions.
