Biodiversity is a material issue for most companies. Yet new analysis by the Pentland Centre at Lancaster University suggests that there is a poor understanding of how to communicate about biodiversity, how it feeds into business strategy and influences corporate operations.

We examined biodiversity reporting for a sample of companies that are dependent upon or impact nature. Our analysis identified some important examples of best practice that can guide future reporting cycles, as well as some of the barriers that will need to be overcome for reporting to improve. We name the best practice companies to provide inspiration to others.

The forest sector companies in our study demonstrated the best understanding of nature, biodiversity and ecosystem services, and there are standout examples by companies across other sectors that demonstrate both global approaches and local actions. Whilst biodiversity is largely a (negative) risk factor, some companies are starting to consider aligning their operations to positively enhance nature. Only a few have developed monitoring approaches.

How companies are currently approaching nature and biodiversity, suggests several barriers are in place that need to be overcome:

• Firstly, the focus on climate change has drawn attention away from nature and biodiversity, even where this should be the primary focus for several sectors.
• Secondly, the temptation to jump into setting a global target for biodiversity is surprising given that what can/should be done is highly dependent upon local context. Reductionist approaches and solutions will not work for nature.
• Thirdly, the use of reporting standards tends to be the end point of reporting rather than the starting point. This means that there is often insufficient explanation of biodiversity context and consequences, and this reduces the usefulness of the information provided.

Three approaches can help companies, investors and academics to overcome these barriers:

• Firstly, the use of scenarios: this can help in the development of a deeper understanding of possible futures, their consequences, and strategies to respond to those futures.
• Secondly, the use of indigenous and local knowledge: which is more likely to facilitate approaches that are context specific, empower local people in decision processes, and incorporate real time monitoring.
• Finally, data analytic tools using procurement disclosures, corporate public relations information, together with unstructured data, may provide a better way to provide global level reporting of corporate approaches to nature and biodiversity.

The Pentland Centre is bringing together a group of experts on 28th and 29th September 2022 to brainstorm these last three topic areas. The outcomes will guide our future work. For further information please contact d.pollard2@lancaster.ac.uk

The Navigation Guide on the status of corporate disclosure on nature and biodiversity can be found on our website. Future Navigation Guides will track the evolving best practice of disclosure, and provide further insights for companies, investors and academia.

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