As COP17 reaches its conclusion in Armenia, progress towards meeting a global commitment to halt and reverse nature’s decline by 2030 remains off track. To help speed up action, the Nature Positive Initiative has launched a new set of common, global metrics designed to make measuring changes in nature simpler and more consistent for businesses. It boils down more than 600 existing metrics into just four key indicators of nature’s health, which companies can use to better understand their nature-related dependencies, impacts, risks and opportunities. In this week’s episode, Nick speaks with the initiative’s convener, Marco Lambertini, to explore how nature underpins our social and economic wellbeing, and how food production in particular is entirely dependent on healthy natural systems providing key services like pollination, soil fertility and water storage capability. Marco joins us direct from the conference floor to explain how the new metrics were developed, how they are intended to be used by companies, how they integrate with existing nature standards from the likes of TNFD and SBTi, and why understanding and acting on nature dependencies is fundamental to the future resilience of business models.
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Further reading
A warning from insurance experts about the seismic impact of climate disruption has increased pressure on food businesses to get serious about resilience
Resilience under threat from nature loss
The BRC has told retailers they need to do more to implement nature-based targets and strategies despite food businesses taking the industry lead
Transcript
Marco Lambertini: We think that these metrics are actually truly accessible. But at the end of the day, Nick, the fundamental question a company need to ask is why? I need to invest time in doing this and understand their dependencies. For many companies, dependencies are still not very clear. Our suggestion is scratch the surface because actually they’re not far away. You know, deep in your value chain. If you scratch the surface, you will find dependencies quite easily. Food in particular, independencies are obvious.
Nick Hughes: Hello and welcome to the Small Print, podcast by Footprint Media Group.
I’m Nick Hughes, Footprint’s Editorial Director. Each week we delve beneath the headlines of an issue impacting the hospitality and food service sector through our unique lens of environmental and social affairs. As COP17 reaches its conclusion in Armenia, progress towards meeting a global commitment to halt and reverse nature’s decline by 2030 remains off track. To help speed up progress, the Nature Positive Initiative has launched a new set of global metrics designed to make measuring changes in nature simpler and more consistent for businesses. It boils down more than 600 existing metrics into just four key indicators of nature’s health, which companies can use to better understand their nature related dependencies, impacts, risks and opportunities. In this week’s episode, I speak with the initiative’s convener, Marco Lambertini, to explore how nature underpins our social and economic well being and how food production in particular is entirely dependent on healthy natural systems providing key services like pollination, soil fertility and water storage capability. Marco explains how the new metrics were developed, how they are intended to be used by companies, how they integrate with existing nature standards from the likes of TNFD and sbti, and why understanding and acting on nature dependencies is fundamental to the future resilience of business models.
Nick Hughes: Marco, welcome to the Small Print. You’re joining us from COP17 in Armenia. Remind us what’s at stake from this conference on biological diversity and what’s the mood like on the ground there?
Marco Lambertini: Indeed, Nick, Greetings from Yerevan, Armenia. Cop 17 of the Convention of Biological Diversity. It’s an important cop because it’s midway to 2030. The cop has agreed. The cop 15 in Montreal 2022, a little bit delayed by the COVID crisis, agreed to a global biodiversity framework. Probably not. Probably absolutely. The most comprehensive, most measurable and most ambitious framework on biodiversity ever agreed by the world. We call it the Paris moment for Nature at the time, with a mission to halt and reverse biodiversity loss by 2030 and a number of targets very specific, ranging from more protection 30% of the planet, restoring 30% of degraded ecosystems, redirectional negative self subsidies by half a trillion and, and, and mobilizing resources for nature to 200 billion per year. So, you know, very ambitious and very measurable, very specific. And this is, we are midway. So this is an important stock taking market. Are we doing where we are and what needs to happen in the next, in the next four years?
Nick Hughes: Okay, so just in terms of that stock taking, where are we in terms of key indicators for the health?
Marco Lambertini: I thought there was a follow up
Nick Hughes: question, are we on track?
Marco Lambertini: So look, this is. Well, yes, no, we are, we are not on track. But so there is, there is definitely progress on both action, which is the most important thing, but also in terms of actually the realization of the importance to act. And that’s important too because I mean, unless you understand why it’s important to act, action doesn’t follow. And so there is definitely progress and the most visible progress perhaps is in from the corporate sector and they will talk more about that, I understand, as we, as we continue conversation. But ace, progress that is not fast enough is not at the scale that we need to be and is not consistent even in across the world. And so there’s still a lot to do. We need to accelerate basically. But yeah, it’s a mix of celebrating the progress made so far, but also be conscious and be committed to accelerate moving forward towards 2030.
Nick Hughes: Sure. Okay, so we need to accelerate progress. So in that context, the launch by the Nature Positive Initiative of this new global set of metrics for measuring the state of nature feels timely and indeed quite urgent. Before we get into the detail of the new framework itself and how businesses can use it to support their own measuring of nature dependencies and opportunities, just remind us, Marco, who and what is the Nature Positive Initiative and what role are you performing?
Marco Lambertini: The Nature Positine Initiative started actually under a different name in 2018, when we felt it was the time for the world to embrace a global plan and a global goal for nature, like Paris did for climate, something equivalent to the goal of keeping temperature below 2 degrees and the net zero emissions target. We didn’t have anything like that foundation. So that was the first phase. And actually we succeeded in mobilizing companies, governments, civil society. And now we, as I said earlier, we had the goal reversible diversity loss, which we defined before the adoption by the UN as the global nature positive goal. So nature positive means hold reverse biodiversity laws, which is now the mission of the UN Global Biodiversity Framework. But also in simple terms means build the future with more nature, not less. Meaning stop the decline on nature and learn how to develop economically without destroying nature in the meantime. And then after the adoption of the goal, of course the obvious question then was how do you measure progress towards that goal? And that where things got really interesting because we have about just under a thousand different metrics available today to measure biodiversity. And that reflects the exciting development in technology, in science, in sophistication, in way we can measure nature today, which is much higher granularity than ever before. But at the same time, when it comes to actually moving sectors like finance, institutions, companies and different in different sectors, actually this, this complexity is a problem. Companies, many companies never approach biodiversity in this way. You know, for them biodiversity has been more reputation, philanthropy, public relations, csr. Here we are advocating for companies to measure nature impacts as well as natural outcomes as they measure financial impacts and financial outcomes in a way because they’re relevant, because natural impacts are relevant to the compound resilience and profitability. So it’s a different space. So so obviously the question then was how do we measure in a practical way biodiversity so that we can actually encourage particularly, but not only, but particularly the private sector to engage in a nature positive journey. And we started this process of, of of engagement and as has been the focus of the Nature Positive Initiative kind of second phase after the agree. After the agreement in Montreal.
Nick Hughes: Yeah. And just to be clear that the, the initiative itself, this is supported by a wide range of civil society organizations who have historically worked on Nature, isn’t it? So, so it’s not, it’s almost not a new organization of itself, but it’s a coalition of, of interested parties working on nature.
Marco Lambertini: Totally is a coalition. That’s why my, my title is convener is not director or I’m a convener. I’m bringing together this group. And actually it’s not civil society alone I think is a fascinating mix of environmental organizations, global ones like WBIF and others. It is, it also brings together standards and guidance and reporting frameworks on nature, Task Force on Nature, a related financial disclosure, the Global Reporting Initiative, the science based targets for nature. And we bring together also business sustainability, business platforms, the World Council on Sustainable Development for example. So it is a very diverse group organization, but all with a common purpose drive nature positive transition.
Nick Hughes: So we’ll come on shortly to talk more about the metrics themselves and how businesses can use them. And also that point you make about alignment and integration with some of those other standards that businesses will already be familiar with from the likes of TNFD and sbti. But I think it’s worth restating upfront. Isn’t it just how nature really does underpin our entire social and economic wellbeing, doesn’t it? You can’t say it often enough, and you say it in the foreword to the Framework, that no business, financial institution, community or government is immune to the implications of the loss of nature. But I wonder, do we still take
Nick Hughes: nature rather for granted?
Nick Hughes: Don’t we?
Marco Lambertini: Totally. Totally. I mean, you know, that’s the paradox of today. We have spectacularly developed economically and socially because let’s face it, you know, most of the people today in the world are living better lives than their predecessors, than their, even their parents in many cases. And so, you know, we made spectacular progress in lifting many, many millions, millions of people from poverty, for example, and from extreme poverty. Inequality is still there, massive and unacceptable. But there is no doubt that the nature negative model of the last hundred years or so, particularly after the Second World War when the big economic boom exploded, and demographic growth, as Paulette in consumption, those are the three things, the economy, the technology, the consumption altogether, have accelerated the pressure of nature like never before and in a, in such a short period of time. And so we are taking nature for granted because nature has always been there for us. We never had an issue with, with nature scarcity, you know, until a few decades ago when we started, you know, over exploiting, wasting, overconsuming and all the rest. So it’s a very new dimension for our species to actually face scarcity in nature, the stabilization of natural system that has been stable for hundreds of thousands of years since the last glaciations and all before. So yes, we are taking nature for granted. And that’s the fundamental proof, because intuitively everybody understand, everybody knows that we depend on nature. Nature is our mother and we are nature. We come from nature. Nature sustain us in everything that really matters. But we take it for granted until now, when we’re beginning to understand, on one hand, the scale of the impacts of our impacts on nature, secondly, the consequences and the risks of those impacts which are not just affecting nature per se. So it’s not just about an issue of species going extinct in isolation or ecosystem disappearing. It’s about the implications of that for our social stability, for our wellbeing, for our health, and increasingly for our economy. And some companies and governments are beginning to see in their balance sheet no risks, but cost materializing due to climate change disruption, damages of, due to climate change, a collapse of ecosystems that leads to a gain and exacerbation of climate Impacts. And so all this is becoming real material, material for somebody like me that, you know, work with the NGO to raise the respect, the ethical duty, moral duty towards nature conservation, because I think it’s still a very important driver why we should protect nature. But at the end of the day, you know, when nature is understood as material to our well being, development economy, then I think the conversation changes completely and become unavoidable. And that’s at the point we’re at.
Nick Hughes: Yeah, absolutely. And the food system, which obviously is of interest to footprint readers in particular is a good example, I think, of a system where it’s entirely. The value that businesses extract from the food system is entirely contingent on healthy natural systems continuing to provide key services like pollination, soil fertility, water storage capability.
Nick Hughes: When we lose those essential services, we lose the ability to produce food consistently
Nick Hughes: in the volume and quality we require.
Nick Hughes: So without getting too overblown about it, this is fundamental to human existence. And so I think food is a useful lens through which to view nature dependency and risk.
Nick Hughes: So let’s, let’s move on to the initiative itself. You touched on how it’s trying to create this universal set of indicators and metrics for nature, given how there are so many current metrics, almost a thousand I think you said, which is such a huge amount. So really this is about trying to reduce complexity for businesses. Can you just touch a little bit more on some of the challenges that companies have historically faced in measuring their dependencies on nature and how they themselves impact it through their own business activities?
Marco Lambertini: Yeah, I mean, traditionally, as I said, the biodiversity community has not been particularly good in narrowing down on the most important, if you like, proxy metrics of the state of nature. Because let’s be honest, we don’t even know all dimensions of nature. And we just have, we don’t even, you know, we still don’t know a lot of the nature on our planet. So we can’t pretend to be able to measure everything on nature. And actually it’s not necessary because there are good enough proxies of the state of nature that are giving us a sense of whether nature health is improving or not. And that’s exactly what we need. The metrics that we need, particularly for the private sector, but also for governments, for decision makers in general, are methods that give us a sense of whether we are continuing to degrade nature or not, whether we are be, are able to methods that are able to inform decisions on practices and policies that have the ability to improve the state of nature in moving forward. And so that’s what we did good enough, not perfect. And that where we landed, we landed on four indicators which are absolutely no brainers. The state of the extent of the ecosystem. Is a forest in your operations or in your supply chain increasing or decreasing the condition of the forest is improving or not. Is that the operation sites or the supply chain where you operate driving extinction or not? And very important because it’s totally underestimated are the populations of key species and has underlying keys because you can’t measure all species, but the key species for the they’re important for the health of the ecosystem or the provision of services that businesses depend on. Are those populations increasing or decreasing? And because you know when you look at the forest, you see a big patch of green, but is a. Is a big interdependent system of many species working together to make that forest functioning resilient. Providing the services that we need for many things. And so these are the four indicators. Extent, condition, distinction, risk and populations. And we decline. We organize those those four indicators in in site and landscape level. Because many companies depend from the state of the health of natural systems outside their sites. Very often they are downstream and of major impacts that affect company operations without them having any responsibility. So we need to take a broader look as well as looking at the site itself where production happens. And then we also organize these four indicators in three levels of granularity, meaning preparatory, simple and then medium and high. So that company can actually begin from a very. An easy entry point to understand to build literacy about these issues within the company itself and understand where to focus one is material to start with and then go higher and deeper.
Nick Hughes: Yeah, okay. And just in terms of how businesses capture this data Marco because obviously we’re speaking to food companies that are right down at the consumer end of the supply chain. Some might not even have very good visibility of what happens upstream. How can businesses set about capturing data on these four key indicators? Is it, you know, publicly available data sets? Do they have to go out into the field and capture it themselves with partners? How does it work?
Marco Lambertini: So great question is that’s a fundamental. Because that’s all part of the practicality right. Of this set of metrics and this usability. So first of all, the preparatory stage, all the data available without too much complication. Particularly in ecosystems, there are very readily available data sets on ecosystem extent or coming from satellite imagery and available through different platforms. And we are. We have developed also some guidance that point in the direction of where these data are and how can be can be accessed when you Go into more detail then you, if, if you need more detailed information in order to better understand your dependencies, secure your dependencies, then you need to increase the level of granularity. In some cases you need to acquire data. There are services that provide that commercially at honestly they’re not a huge cost compared to the cost that can derive from, from exposure to nature related risks. And then finally in some cases, if you want to be absolutely sure, and more, even more granular. Of course ground truthing is important too, but in that sense there are plenty of local organizations around the world that can provide that service for companies. So companies don’t necessarily have to build all that in house as capacity, but they can rely on providers and experts that actually developing very fast around the world at different levels. So both at a national level and very local. So that, that, that, that’s where we are. We, we think that these metrics are actually truly accessible. But at the end of the day, Nick, the, the fundamental question a company needs to ask is the why I need to invest time in doing this and understand their dependencies. For many companies, dependencies are still not very clear. Our suggestion is scratch the surface because actually they’re not far away, you know, deep in your value chain. If you scratch the surface, you will find dependencies quite easily. Food in particular, I mean dependencies are obvious. And then to your point about the complexity of the, of, of, of tracking the value chain and supply chain in particular, I mean that’s of course is a big, big problem. Traceability of where you source your products is a fundamental condition to be able to measure your impacts on nature, your dependencies on nature, and be able to prevent risks from supply chain shocks. I was talking recently to a big company in the food system and they understand that their old approach of moving every year sometimes from a sourcing area to another, depending on cheaper commodities or more viable commodities, is actually becoming more and more difficult because the majority of supply chains are somehow being affected, particularly by climate change. But what they told me also, which is super interesting, is that they now have a clear correlation between supply chain shocks related to climate change, when that happens in landscapes where nature is degraded. So meaning, you know, investing in nature conservation or in nature restoration in those landscapes increases the resilience of those sourcing areas to climate change. And that’s I think, one of the easiest way for a company to understand the materiality of biodiverse, meaning ecosystems and species. The climate link and the water link. Those are the two fundamental, clear, much clearer now than ever before. Connections between biodiversity, state of biodiversity in nature and the climate impact.
Nick Hughes: Yeah, and that’s a really key point and it’s something that we’ve been covering in podcasts over recent weeks, given the extreme weather conditions that have impacted food production across Europe and I’m sure across the rest of the world too this summer. And how like you say, those landscapes that have protected natural systems that have adopted regenerative growing techniques, cover cropping, you know, all these kind of techniques have been more resilient to some of those extremes of weather. I guess the other point I want to pick up on there, Marco, is about, as you were saying, traceability and the need to have visibility of your end to end supply chain. And presumably this framework can support businesses with compliance with things like for example the EU’s deforestation regulation, which is putting more onus on downstream companies to have that oversight of their upstream supply chain. CSRD is another one. So you know that compliance piece. If businesses are asking why should I be interested in measuring, measuring my nature dependencies. Yes, it’s to kind of identify your risk, but it’s also about compliance, isn’t it?
Marco Lambertini: It’s about compliance, but increasingly compliance, interestingly enough, I mean compliance by by definition started as a, as a policy setting mechanism by governments to make sure that the private sector would not generate externalities for society. I mean the first example, pollution regulation. Right. Pollution regulation was, was a way to avoid contamination of water that was used by people, by society, for example, or the air and then we breathe, et cetera, et cetera. So that was the, so the main driver of compliance has traditionally been control, reduce, limit the damage, for example, private sector, certain sectors to, to society, to people. Now compliance is beginning to also be about the resilience and the viability of business. And that’s something that is not just about CSRD or udr, but it’s actually about financial institutions, lenders, insurance companies, they want to know if a company is exposed to nature related, climate related risks. Because if they are and if they don’t respond, they don’t mitigate those risks convincingly enough, they actually have a higher risk profile in terms of receiving or Vienna even eligible for investment. And so it’s interesting because now there is a new dimension of compliance that goes into actually the financial system rather than the government regulation and policies.
Nick Hughes: Yeah, and we should be clear, shouldn’t we, that this framework is intended to be used just as much by the financial institutions, the investors, insurance, as it is by companies themselves. Because like you say, they need to get a picture of companies risks and dependencies and the extent to which they’re exposed to these in future.
Marco Lambertini: Absolutely. And look, there was a session yesterday here we have a Nishoposit pavilion, a large pavilion. We’re hosting up 100 events, super packed, which is really encouraging and plenty of businesses here in Yerevan by the way, which is another very encouraging dimension. But you know, we have a session dedicated to insurance. Major positive insurance and insurance sector is probably the sector even more than the financial institutions and banks. It’s really the sector that understand this better than anybody else because they’re beginning to see business being lost in terms of areas becoming uninsurable and of course claims going up as well, premium becoming more expensive. So losing clients, I mean it’s an existent. Is becoming an exist. They see this becoming an existential issue to their, to their visionary concept of insurance insurability. And so yeah, they do, they do demand now they do demand these, these assessments and the metrics that we developed exactly serve that purpose.
Nick Hughes: Okay. And just on that point about alignment, Marco, with other standards for businesses that are have set science based targets for nature and disclosing via tnfd, how can you sort of reassure them that this isn’t an extra box they need to tick? And the integration with these other standards bodies has been kind of fundamental to the development of the new framework.
Marco Lambertini: Well, thanks Nick for that question because this is something that would have ended in any way in my intervention here because this is absolutely not a new framework company needs to report against. Rather these are metrics company can report through different frameworks that will use the same metrics. So creating much better interoperability. TNFD has already adopted this state of nature metrics. So sbtn, GRI is in the process of doing so. ISO is developing, we are working with them to develop the standard about this metric. ISO standards about these metrics frag. The advisory to CSRD in Europe is equally pointing. Multilateral Development bank are using these metrics as guidance for their development and concessional finance. So I mean this was clearly a gap and that’s why we did this because we understood from a survey that we did years ago this was a clear gap state on nature. There’s no clear guidance, none of the guidance is there. Many frameworks are using it. So that will hopefully help companies to use the same metrics to report against different frameworks, different use cases from disclosure, target setting and reporting and the state of nature.
Nick Hughes: Indicators and metrics are described as a minimum set of indicators for measuring changes in the state of nature so are you encouraging businesses to go further than those four core indicators? And if so, what does best practice look like where nature reporting and action is concerned?
Marco Lambertini: So there was a study from McKinsey at the beginning of the year looking at how many Global 500 Fortune companies reported set targets on nature versus climate. Climate is about 80%, nature is below 13%. So there is a problem. Right. And so we want, we need to provide something simple to increase the adopt, to increase adoption and to increase and to incentivize companies to start their journey on nature by providing clarity. But of course, companies will soon discover that the very minimum level is probably not enough to provide information that they need. But by starting measuring the minimum, they will begin to understand why it’s important to measure. That’s, that’s the whole theory change. But I hope this is also a support, a support to the company’s journey to understand, truly understand their exposure to nature, because the exposure is there, but many companies haven’t yet understood it or been able to quantify it. So these metrics at a simple level help understand that start the journey. And there’s no doubt not all, but the majority of companies will have to measure more as they’re measuring more on many other fields. That’s so important for company resilience and viability. So it’s to incentivize the beginning of the journey. And we made it very clear from the beginning, Nick, this is not. These are not the metrics, the state of nature metrics. This is, as you say, universal. First of all, they are applicable across all world local systems, all users all use cases. That’s why very different compliance frameworks are able to adopt these metrics. Truly universally applicable. But also that is a common level playing field. If you like the minimum level playing fielder, then if you want to measure more because you need to measure more for your decision making than for reporting, then then of course you have to.
Nick Hughes: So before we close, Marco, you’re at cop, as we said earlier, I believe it’s due to close on Friday of this week. What does a good outcome look like from your perspective?
Marco Lambertini: I mean, for me, COP has already achieved its most important outcomes. You know, if you leave aside all the commas, the brackets, the negotiation text, you know, the final resolution, that is important. But to be honest, what is more important, COP has signaled two things. First of all, that the momentum of nature is continuing to grow because the participation of governments, but particularly private sector. This COP is exactly indicating that. And that’s the most important signal, despite what you feel what you hear that companies are stepping back from nature and climate. Actually there is no real feeling about that happening here. Of course, here the companies are the ones that were engaged, but still there’s huge number of companies present here. But also the webinar that we did launching domestically had thousands of participants. So there’s a huge interest in progressing on this journey because the materiality of climate and nature will finally be being increasingly understood. So that’s the most important message. The momentum is continuing and nature and biodiversity are increasingly relevant and understood. The second message is that we need to accelerate because, yes, awareness is growing, but it’s not translating yet in action at the scale and the speed was needed. And so I’m sure the final resolution, the president of the COP will stress that point very strongly because we want to meet in 2028 and then 2020 in 2030 with much more progress made in order to be confident to then embrace an equally ambitious plan for 2040.
Nick Hughes: Super. Well, Marco, thank you for sharing the important work that you’re doing. Best wishes for the rest of cop. And thank you very much for joining us on Small Print.
Marco Lambertini: Thank you so much. Thank you, Nick, for having us.
Nick Hughes: We’ll be back next week with another episode of the Small Print.
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