A more holistic view of negative impact is here
As the CSRD kicks into effect across Europe, companies are going to need to report their negative impacts in a much more holistic and standardized way.
This is going to be a pretty seismic shift to the sustainability landscape, breaking the long-held carbon tunnel vision and expanding the reporting horizon. It brings two key changes, improvements if you ask us, to the sustainability narrative that will drive bolder actions and improvements.
Firstly, all material impacts of a business’s operations will need to be included. This spans across Environmental, Societal and Governance aspects of the business. This is good news for nature, as the conversation will shift from being too narrowly focused on climate change to now also include important (and inter-related!) things like biodiversity, ecosystems, pollution, water and marine resources.
Secondly, and this one is often overlooked, compliance schemes have tightened the reins by banning the use of offsets. Companies have to report the full extent of their negative impact, leaving out any voluntary credits or offsets they might have bought for marketing purposes. This is also an improvement as it finally regulates the wild-west of neutrality claims and provides a more realistic perspective. The exclusion of offsets is also reflected in the Science-based targets initiative (SBTi), pushing for more ambitious reduction aligned to a 1,5 degree pathway (which is what we all agreed to in Paris).
These offsets have not just lost their use in compliance schemes, they’re marketing sheen has also vanished. The public perception has tilted as renowned watchdogs like Follow the Money, Bloomberg, and The Guardian have exposed how the voluntary carbon market has often failed to deliver the claimed benefits. This has been paired with litigation by activist groups against airlines and oil companies for their overly liberal use of these credits in making neutrality claims. Following these developments, the European parliament has even decided on an EU wide ban of these claims by 2026.
This calls for a new approach to positive impact
It’s clear that companies need to revise the way they think about compensation. Driven by their owners, employees, customers and stakeholders, businesses will still want to take responsibility for the broad range of negative impacts that are being brought to the light.
This calls for a broader scope of their positive impact, focusing not just on carbon but on the broader benefits for climate, biodiversity, ecosystems, livelihoods and local communities. By aligning to the United Nations Sustainable Development goals and global treaties such as the COP15 Biodiversity Agreement and the EU nature restoration law private entities can showcase how their contributions are driving progress towards global goals.
Communicating both sides of your sustainability story
By transparently positioning their positive impact next to their negative impact, companies can tell a nuanced story and avoid greenwashing allegations and litigations.
To get some inspiration on how to do this well, we can look at the B-corp movement that’s been publishing annual impact reports for a while now. We’ve ran a comprehensive analysis of some of the best impact reports out there, and here’s our 4-step-process on how to be a genuinely good business;
- Holistically map your negative impacts. All of them.
Do the work along with your suppliers. Mobilize your teams and get help if you need it.
- Avoid, minimize and reduce negative impacts where possible, as soon as possible.
Set up bold initiatives with immediate impact, alongside big plans for the long-run.
- Create as much positive impact as you reasonably can
Get the most out of your available compensation, marketing and engagement budgets to regenerate and restore damage done. Involve your customers, employees and suppliers to build momentum.
- Regularly share your progress in steps 1,2 and 3. Together. And in that order.
Nothing is perfect, so share the ups- and downs. The wins and the losses. Sustainability is a journey, walk it together with your stakeholders.
Once you've reached step 3, reach out to us. We know a thing or two about making positive impact on nature and can connect you to some of the best projects out there. We'll help you tell your story so can make the most out of your donations to nature.