Humans often take for granted that natural elements of their environment, which are relevant to sustain their operations, remain available and unchanged. However, with a growing awareness of climate-related risks to businesses’ operations, the awareness of dependencies on natural elements has grown as well. Whether it is the reliance of fishing companies on oceanic resources, the dependency on wood or clean water, most non-financial companies depend on natural resources to a greater or lesser extent. Companies also need to be aware of the impact their operations have on the natural elements around them, especially if they are using resources prone to slow regrowth or scarcity.
Nature dependency does not only have an impact on actors in the real economy and non-financial companies. Apart from being subject to their own nature-related risks, financial sector companies, through the way of their involvement with non-financial actors and through their investments (especially in commodities, either direct or through derivatives), are also subject to the nature-related risks of the real economy.
As such, it is important for both non-financial and financial actors to become aware of these risks. Disclosure can help to inform investors and introduce a positive pressure on companies to act responsibly. In September 2020, an international financial sector led informal working group was established to plan a Taskforce on Nature-related Financial Disclosures, with the goal of helping companies to identify, assess, manage and report their impacts and dependencies on nature.
This session will bring together key players in the research and reporting efforts on natural capital to discuss the role of investors, issues and exchanges and explore how exchanges may be able to raise awareness of these risks and opportunities in their own markets.
Issues to be addressed
- What are nature-related risks and opportunities and how can companies find out theirs?
- How can exchanges assist in raising awareness for nature-related risks and opportunities among their issuers.
- How can the investment community as well as issuers be educated and informed about nature-related risks and the impact of their investments.