• Last update: May 2023

A Start-up
guide to
ESG

Contents

SFG4: Thriving natural world

Why is this important? Copy link

Did you know? Half of global GDP is dependent on the healthy functioning of the natural world.

 

  • Nature is the foundation of our societies, economies and human existence – from the bees that pollinate the food we grow, to the precious metals powering our technologies, to the very air we breathe and water we drink.
  • Despite this reliance, businesses have historically undervalued and overlooked nature – in its interaction with land, ocean, atmosphere, freshwater and living things – leading to its degradation.
  • There is growing consensus that businesses that take a proactive role in addressing their impacts and dependencies on nature and biodiversity will both increase their resilience in the challenging context of the climate and ecological crises while maintaining a licence to operate.
  • For tech businesses, the connection with nature is not always obvious; but business impacts on nature will always exist, at least in the value chain if not in the direct operational sphere.
  • Some tech businesses are also well positioned to harness their technology for nature restoration and regeneration.
  • Ahead of future fundraises, it is also worth noting that biodiversity is the fastest developing ESG theme in global capital markets, with strong parallels and interdependencies with the climate crisis.

Legislative tailwind Copy link

Mirroring climate’s TCFD, the Taskforce on Nature-Related Financial Disclosures (TNFD) is working on developing a global framework to bring more transparency and consistency in how organisations take account of nature-related financial risk. Its formal application is still a few years away but it’s nevertheless indicative of the direction of travel. 

Where to start Copy link

 

Pre-seed/seed Copy link

  • Be aware that nature and biodiversity loss is seen as critical as climate change and that businesses will be expected to disclose their impact and contributions

Series A Copy link

  • Organise staff events and volunteering activities contributing to nature conservation and bring nature into the urban environment
  • Bring plants into the office space
  • If you’re building a business with a physical product and physical supply chains, consider business impacts on nature and biodiversity

Series B onwards Copy link

  • Seizing opportunities for nature-positive action. This comes in many forms including:
    • Bringing plants into the office, shown to boost team wellbeing
    • Organising staff events and volunteering activities contributing to nature conservation, such as tree planting
    • Choosing offsets with strong nature co-benefits. This will typically be investing in nature-based solutions projects, such as wetland conservation or ocean alkalinity enhancement
  • Assessing potential business impacts on nature and biodiversity, either in your immediate operational sphere, or in your value chain. This could include:
    • Sites/operations located in or near biodiversity-sensitive areas
    • Pollutant emissions
    • Water/land intensity
    • Exploitation of natural resources (e.g. precious metals)

This is a relatively emerging area, with tools such as the WWF Biodiversity Risk Filter being developed to help companies visualise their impacts and risks for free.

For businesses involved in the production and/or distribution of physical goods, the impacts and dependency on nature may be more obvious, including in the choice and sourcing of materials and ingredients and packaging practices. Key business risks include reductions in the volume and quality of supply and increased prices.

Data collection Copy link

The theme of biodiversity is still in its infancy and few early-stage investors may ask for data related to biodiversity impact, unless committed to reporting on Principle Adverse Impact (PAI) indicators under the SFDR regime.

Biodiversity related mandatory PAI indicators comprise:

  • Water emissions
  • Hazardous waste emissions
  • Activities negatively affecting biodiversity-sensitive areas

Useful resources and further reading Copy link

Examples and testimonials Copy link

When Voi designed its Environmental Management System before having it ISO 14001 certified, they carried out an eco-mapping and risk assessment of value chain and activities. Within the scope of the company’s operations, vehicles ending up in water was identified as a key risk to biodiversity. To address this risk Voi took a three-step approach:

  • Prevent: They implement no parking zones near waterways using GPS and educating users. Vehicles are also designed to be watertight.
  • Identify and rescue: Voi tracks vehicles ending up in water and deploy their on the ground teams to retrieve them as soon as possible.
  • Partner: For vehicles that are unsafe for their teams to retrieve, Voi partners with local NGOs and diving organisations to retrieve scooters.

GoCardless challenged its employees to Race to Nature, a company-wide fundraising event aiming to reach 15,000km or the distance from London to Cop27 in Cairo, over a 10-week period through running, cycling, swimming and walking. The collective effort led GoCardless to:

They also made a toolkit and webinar available to other companies wishing to set up their own Race to Nature campaign.

"The Race to Nature was a key part of our sustainability strategy in 2022, not just because it meant we could create a real positive impact for tackling climate change, protecting nature, and supporting communities - but it also played a key role in embedding sustainability across GoCardless. We had over 170 employees taking part and collectively covering 32,000km in 10 weeks - all making the effort to help the world around us. It was such a successful initiative, we'll be running a Race to Nature 2023!" Copy link
Ben Knight, Head of Environmental Sustainability at GoCardless Copy link