New International Sustainability Standards Board to Develop Standards

Moving Beyond Direct Emissions to Address Biodiversity

There is growing recognition that climate risk is not only about emissions but also about protecting biodiversity and the associated environmental and financial risks stemming from biodiversity loss.

A key deal struck at the summit outset between more than 130 countries — including the US, the UK, China, Canada, Brazil, Russia, Indonesia — backs a plan to end deforestation and land degradation by 2030. This is important not only because reforestation helps with decarbonization, but also because the deal puts a spotlight on the use of natural resources in commercial activities. This will have implications for companies in related fields as they look to find viable alternatives, in a similar manner as fossil fuel phase outs have driven changes in other sectors.

In the spirit of “what gets measured/reported gets managed”, the Taskforce on Nature-related Financial Disclosure (TNFD) is now up and running. (State Street is a member of the TNFD forum.) Experience from the Task Force on Climate-related Financial Disclosure (TCFD) may help accelerate the development of disclosure standards related to natural capital.

Meanwhile other coalitions such as the Sustainable Markets Initiative (SMI) — where State Street leads the asset owner and manager task force — are actively encouraging investments in natural capital.