CDP has highlighted the poor performance of member countries in implementing mandatory nature-related disclosure policies.
These disclosures are crucial for achieving the goals set forth in the Global Biodiversity Framework (GBF) which 19 of the G20 members committed to at last year’s COP15. The US was the only member country not to agree to the GBF as they were absent from the summit.
In its recent report, CDP underlines the scant progress made by G20 members, with only Brazil, the EU, Singapore and Indonesia taking substantive steps toward implementing biodiversity-related financial disclosure requirements.
Helen Finlay, Global Associate Director of Policy Engagement at CDP, emphasised the significance of high-quality mandatory disclosure, stating that “simply setting targets without mandatory disclosure of the path to achieving them would be counterproductive and could lead to greenwashing.”
CDP describes the biodiversity-related disclosure among G20 countries as “in its infancy.” The report notes glaring inconsistencies and discrepancies across jurisdictions, putting biodiversity disclosures far behind those for climate and water. Pietro Bertazzi, Global Director for Policy Engagement and External Affairs at CDP, called the “lack of ambition” from most G20 policymakers on nature-related disclosure “disappointing.”
Ahead of COP15, over 400 businesses and financial institutions supported calls for mandatory nature-related disclosures, a plea which went unanswered. Observers accused the framework of being “watered down” as the term ‘mandatory’ was notably absent. The EU, however, has been proactive in this aspect, even introducing mandatory biodiversity reporting standards.
CDP’s report also sheds light on the need for regulatory cohesion. It notes that the UK is contemplating making Taskforce on Nature-related Financial Disclosures (TNFD)-aligned disclosures mandatory by 2025. The TNFD is working on improving the availability and quality of nature-related data to encourage more in-depth disclosures. “As nature-related disclosure requirements are developed, it will be critical that regulators ensure consistency and interoperability of disclosure regimes across jurisdictions,” Finlay added.
CDP has offered ten principles for high-quality mandatory disclosure (HQMD) and is urging G20 members to adopt them to fill “key gaps” in their current approaches. “We expect that these HQMD principles will not only increase the quantity of disclosures but also the quality of information reported,” Finlay concluded.
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