Major companies failing to assess and measure their impact on nature

The World Benchmarking Alliance (WBA) has updated its Nature Benchmark, assessing how more than 800 major companies across varied sectors including household products, apparel, mining, and food are impacting nature and protecting and restoring ecosystems.

Using company data and performance from 2022 to 2024, the research finds that although some companies are helping to halt and reverse biodiversity loss, the majority do not yet fully understand how they impact and depend on nature. Only 5 per cent of all companies have carried out an assessment of the impact of their operations on nature, and less than 1 per cent have assessed their dependencies on nature.

The research, which explored the performance of companies such as Unilever, Kering, Newmont and Nestlé, also assessed companies across plastics, water stewardship, environmental rights, and board-level accountability.

It found that:

There is a risk of greenwashing on plastic, as companies fail to back up ambition with action – While 43 per cent of companies provide qualitative evidence of plastic reduction, such as one-off programs or initiatives to reduce the plastic in a specific product, their performance drops significantly when WBA looked at whether they are providing quantitative metrics (19%) to back this up, and even more so when assessing whether they have quantitative, time-bound targets (7%) to reduce plastic use and waste. With plastic waste contributing up to 80 per cent of all marine pollution, companies must significantly step up their actions with time-bound targets if they are to provide a meaningful positive impact.

Holistic measurement is required on water stewardship as freshwater demand sets to exceed supply – The world is facing an imminent water crisis, with global freshwater demand expected to exceed supply by 40 per cent by 2030. 29 per cent of companies report water use reductions or disclose water usage from water-stressed areas, suggesting a growing awareness of their role in ensuring water availability worldwide. However, only 15 per cent are reporting metrics on discharged pollutants, and just 4 per cent have set targets to reduce them.

Companies need to commit to respecting Indigenous Peoples and Local Communities – Indigenous Peoples and Local Communities (IPLC) often live in critical ecosystems and coexist with threatened species. They manage about 40 per cent of all terrestrial protected areas and their ecological knowledge enables a sustainable existence worldwide. Yet only 13 per cent of companies assessed express a clear commitment to respect Indigenous Peoples’ rights. To carry out projects with the potential to affect IPLCs, companies must commit to obtaining Free, Prior and Informed Consent from them to ensure their agency in the future of their territories.

Companies need clear and adept sustainability leadership – While 66 per cent of companies assign sustainability oversight to their boards, only 2 per cent of companies demonstrate that their boards have the relevant expertise on topics like biodiversity or climate. Companies that demonstrate robust corporate governance score significantly better on other sustainability issues. To enhance impact, companies should develop a sustainability strategy that covers nature, supported by concrete high-level responsibility and accountability for delivering the strategy.

Jenni Black, Nature Transformation Lead at the World Benchmarking Alliance, said, “The Global Biodiversity Framework (GBF), a landmark agreement at COP15, recognises the private sector has a role to play if we hope to preserve life on Earth. But our research shows that the vast majority of large companies continue to take nature for granted, despite the fact a healthy planet underpins a healthy economy.

“Two years after the GBF was agreed, it’s imperative for companies to understand and act on their impacts on nature. From their own operations to their value chains, they need to prioritise halting and reversing biodiversity loss. Meanwhile, governments, investors and civil society should be holding the private sector accountable, to ensure that all large and transnational companies regularly monitor, assess, and disclose their risks, dependencies and impacts on biodiversity.”

Sectoral insights
Although the overall performance across all industries is low, with an average score of 15 out of 100, two industries outperform the rest: Personal & Household Products, with an average score of 26, and Pharmaceuticals & Biotechnology, with an average score of 20.

Compared to other sectors, companies in these two industries were more likely to publish sustainability or integrated reports. All companies in the Personal & Household Products industry published sustainability information, and 96 per cent of the Pharmaceuticals & Biotechnology did. Both industries invest significantly in research and development of new products. This commitment to innovation often extends to sustainable practices, such as measuring the impacts of their ingredients, finding eco-friendly packaging materials or reducing waste during production.

Personal care and pharmaceutical products are consumer-facing, so companies in these sectors tend to have more extensive sustainability practices to attract environmentally-conscious customers. Examples include Unilever and Novartis, which score 52 and 40 points out of 100, respectively – the highest scoring companies in their industries.

Compared to the other industries assessed in the benchmark, these two industries also have the highest percentage of public ownership. Public companies often outperform private companies in environmental sustainability rankings due to transparency requirements, investor pressure, and regulatory compliance.

Find out more here

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