The importance of nature and climate considerations for organisations should be strategic rather than merely compliance-driven.
Organisations that incorporate nature and climate-related risks and opportunities within their strategy and purpose development and execution increase their chances of building sustainable competitive advantage over time. To achieve this goal, organisations should consider the following.
Materiality assessment is fundamental for organisations when integrating nature and climate. Identifying the key climate and nature-related risks and opportunities, including the response to them, is critical when developing the business case.
It forms the launchpad for the sustainability journey. This enables the strategic integration phase, in which nature and climate considerations are incorporated into decision-making and planning across an organisation’s functions.
For example, policies and processes are enhanced through the integration of climate and nature considerations into areas such as investments and procurement, moving beyond compliance demands to a focus on value creation for stakeholders.
Developing a tailored accountability framework across the organisation is another important aspect for integrating climate and nature considerations. It involves defining the roles and responsibilities of the board to management, and of the different levels within an organisation. Closely linked to this aspect is providing the motivation to achieve goals and targets.
Organisations should link performance on climate and nature-related targets to their reward structure to ensure alignment while providing the necessary support, executive sponsorship and enabling environment required to succeed.
The process should involve teams with different competencies. Assemble a multi-disciplinary team to ensure they have the required expertise to debate matters to arrive at optimal outcomes. One essential activity required for this process is stakeholder engagement. It includes internal and external stakeholders, which should be a continuous process.
The final step is reporting. The goal of reporting for climate and nature considerations should be to provide management and investors with decision-useful information.
Reporting should be bespoke and customised to an organisation’s unique context to remain relevant to report users. Some additional points to note during this process are the need to ensure connectedness between financial reporting and non-financial reporting.
Also, organisations should ensure implementation and reporting are proportional to the appropriate governance structures for accountability.
