The Nature Brief for Business.

The Big Picture

Corporate sustainability disclosure is undergoing a major recalibration. EU regulators are relaxing some of the most ambitious reporting rules, while global frameworks are converging around the integration of climate and nature. Investment in nature is accelerating, increasingly driven by financial returns rather than just risk mitigation. Meanwhile, companies are showing mixed progress. Microsoft and others are doubling down on nature-based solutions, but large gaps remain in supply chain decarbonisation and biodiversity strategy.

Key movements this week:

• Biodiversity credits are gaining institutional support, but project integrity is under scrutiny.
• Nature tech is surging, with significant capital flowing into data and AI solutions.
• Nature and net-zero strategies are converging, though policy and fossil fuel interference remain barriers.

Market Essentials

Finance: Nature-based investment surges amid growing confidence in returns.

• A new Pollination Group report released during London Climate Action Week showed 99% of institutional investors plan to increase nature allocations. Financial return now tops risk mitigation as the key motivator. This marks a shift in perception from nature as a cost center to a growth opportunity.
• The G20, led by South Africa, launched an initiative to unlock bioeconomy finance in Africa, including nature credits. This could position Africa as a leader in biodiversity-linked development, while testing innovative financing structures.
• The Asian Investment Infrastructure Bank, (AIIB), Bank of Jiangsu (BOJ), and Bank of Huzhou (BOH) joined forces with Tencent to invest in nature infrastructure and solutions, aligned with a recognised taxonomy. The partnership indicates growing alignment between private capital and global frameworks for nature-positive investment.
• Swiss bankers estimate $6.5 billion per year is needed for national biodiversity goals, leaving a $2.1 billion annual gap. Bridging this gap will require new private capital flows, regulatory incentives, or blended finance models to meet 2050 targets.

Reporting: Sustainability disclosure rules ease, but integration deepens.

• The European Council backed major reductions in corporate sustainability reporting burdens, including changes to CSRD and CSDDD. These changes will significantly reduce compliance demands for many businesses while still aligning with broader climate transition goals.
• The European Commission will withdraw its Green Claims Directive, introduced in March 2023 to combat greenwashing by requiring verified environmental claims. Its failure highlights the difficulty of enforcing marketing accountability across the EU and may delay consumer trust in sustainability labels.
• Data gaps persist in nature-related risk disclosure, especially across complex global supply chains, hampering targeted, nature-positive action. Without localised, high-resolution data, businesses struggle to quantify impacts or align with frameworks like TNFD or SBTN.

Targets: Corporate ambition rises, but action lags behind pledges

• Microsoft signed a 10-year contract for 5 million improved forest management carbon credits, reinforcing confidence in nature-based carbon removals. The deal signals a long-term commitment to carbon durability and market leadership in nature-based climate solutions.
• A $4 trillion investor coalition urged chemical firms to eliminate hazardous substances to mitigate biodiversity risks. This push reflects rising investor scrutiny on toxic exposures in global supply chains, particularly where regulatory gaps remain.
• Only 200 companies with planned SBTi targets are purchasing carbon removals, revealing a large execution gap. Some companies are focusing on cutting their own emissions first, while others remain cautious about buying offsets due to ongoing concerns over credit quality and market transparency.
• The fashion industry lacks credible supply chain decarbonisation plans, with only one major brand investing in durable removals. As pressure mounts for Scope 3 transparency, brands without concrete strategies may face investor pushback or consumer disengagement.

Trend Watch.

Biodiversity Credits

• The EU Committee of the Regions urged the European Commission to develop a biodiversity credit market with local authorities. Greater regional involvement could improve project relevance and monitoring while building trust with local stakeholders.
• The UK removed VAT from its Biodiversity Net Gain credits to streamline investment. This change lowers transaction costs and could accelerate uptake by developers and landholders.
• A New Zealand forestry company launched a new biodiversity credit program, aligning with national restoration ambitions. The private-sector innovation may help shape the government’s proposed market design and set standards for project integrity.

Nature Tech

• The Integrated Biodiversity Assessment Tool (IBAT) Alliance reported record $2.5 million biodiversity data investment in 2024, more than double the previous year. Enhanced data capabilities will help businesses map impacts, comply with reporting rules, and avoid biodiversity-related risks.
• AI could reduce global emissions by up to 5.4 billion tonnes CO₂ annually by 2035, per new research. These efficiencies in food, transport, and energy systems highlight AI’s growing relevance for climate and nature strategies.

Nature & Net Zero

• At London Climate Action Week, nature-based solutions were framed as “engines of innovation,” attracting long-term capital. Speakers emphasised their ability to generate climate, biodiversity, and social co-benefits in one integrated strategy.
• Research suggests burying forest waste could lock away 769B tonnes of CO₂ through 2100. If scaled, this method could become one of the most cost-effective and durable carbon removal tools available.
• Fossil fuel influence at UN summits is under growing scrutiny. Critics warn that industry lobbying may be undermining more ambitious climate and nature targets during global negotiations.

Quick Hits.

Policy:

• Canada may allow exemptions to key environmental laws for “national interest projects.”
• The U.S. plans to reverse roadless protections across 58.5 million acres of national forests.
• Chile approved its biodiversity offset regulation and updated NDC targets.
• New York launched $1 million in grants for community forest conservation.
  

Markets:

• California increased Q3 permit volumes after a soft Q2, while CCA prices rose 3%.
• Mongolia and the UNDP launched a carbon market readiness program.
• Ethiopia announced a $3 billion clean cookstove roadmap for 91 million people.

People:

• New London Climate Action Week conservation initiative promotes participatory social impact evaluations.
• Canada’s wildfire crisis is hitting Indigenous communities hardest.
• UNDP urged India to reallocate $25 billion in harmful agricultural subsidies toward biodiversity.

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