Nature Risk Commission with clear recommendations
Interest in the work of the Nature Risk Commission has increased in line with media attention on nature loss in Norway. Now, the Commission shows how businesses and the public sector can work more systematically with nature risk.
`We all need to raise awareness about nature loss,´ says NHH researcher Aksel Mjøs.
Today, the Norway's Nature Risk Commission delivers the NOU report to Minister of Climate and Environment Andreas Bjelland Eriksen. Commission leader Aksel Mjøs presents the work, assessments, and recommendations.
Unique NOU on nature and risk
`This is a unique report, probably one of the first in the world to analyze what nature risk entails collectively for both businesses, public entities, and society at large, and provides recommendations on how they can incorporate nature risk assessments into their decision-making processes, ´says Mjøs.
Aksel Mjøs is an associate professor and head of the Department of Finance at NHH.
The NOU provides an overview of what nature risk is and what it entails for individual businesses, and, most importantly, it offers recommendations: How should the business sector and the public sector they work with nature risk.
`Increased knowledge about the severity and extent of nature loss is important, as well as understanding the potential consequences for each actor. Businesses and public organizations must address this risk and integrate it into their decisions,´ says Mjøs, adding:
`If you are not aware and do not take this seriously, there will be no changes.´
Recommends five main steps
When businesses and other societal actors consider their own nature risk, it will in turn contribute to less nature loss, according to the committee.
`But it has not been our mandate to save nature. We do not present policies or measures to avoid nature loss. This is aimed at businesses and organizations to increase awareness of the possible consequences of how they themselves use and impact nature.´
Aksel Mjøs, Ivar Baste, Kristine M. Grimsrud, Atle Harby, Else H. Hendel, Audun Korsæth, Idar Kreutzer, Trude Myklebust, Anders Oskal, Claire Armstrong, Vigdis Vandvik, Liv Anna Lindman, and Hanne Kathrine Sjølie.
The commission provides concrete recommendations at the national level and to the public and private sectors. A key recommendation is that in their assessment and management of nature risk, they should follow five methodological main steps:
- Identify where and how the business interacts with nature, including in its value chains.
- Analyze where and how the business depends on and impacts nature.
- Assess how exposed the business is to nature risk.
- Use the analyses and assessments as a basis for internal and external reporting.
- Apply this knowledge as a basis for concrete decisions and actions.
Oil Fund: Early Adopter
The commission believes the private sector can strengthen its work on nature risk, among other things, by using the Task Force on Nature-Related Financial Disclosures (TNFD) tool. The framework, borrowed from the financial world, provides companies with a methodology to identify their dependence on and impact on nature and natural resources. The framework is based on a similar framework developed for climate risk, TCFD.
In Norway, eight companies have committed to adopting TNFD, including the Oil Fund, Grieg Seafood, Odfjell, and Storebrand. The developers of the methodology refer to them as "early adopters."
`The TNFD framework is relatively new and undoubtedly a good and proper tool for companies. It helps companies report on various types of nature-related risks in a standardized and therefore more comparable manner.´
The goal is to provide the market and the rest of society with better information on how climate and nature changes can economically affect businesses in the short and long term.
`These guidelines are voluntary, but more and more companies are adopting them to improve their reporting and management of climate-related challenges,´ says Mjøs.
`Are there industries or actors who should read the NOU report particularly thoroughly?´
`What we think is that primary industries, such as fisheries, can benefit greatly from this knowledge. Another example is companies involved in land-intensive activities, such as road construction. Our experience is that the public sector is not much better than the private sector at assessing their own nature risk, so more will benefit from this knowledge.´
The commission sees the Norwegian aquaculture industry as a good example to illustrate both its dependence on and impact on nature.
`Fish farming is a very important industry for the Norwegian economy, the districts, and employment and has a complex interaction with nature. Our task is not political. We are not here to instruct industries or individual actors on what to do.´
Finance Researcher with Sustainability Profile
`You are a finance researcher and give lectures and talks on sustainable finance. What do you think about leading the Nature Risk Commission?`
`When a Minister from the Labor Party appoints a finance researcher for such work, where the actor perspective is central, I think it contributes to better focus on decisions related to nature risk assessments. The commisson consists of engaged and academically heavyweight individuals with very different approaches to our common mandate. This has been important and inspiring in our work, along with a solid secretariat. If we are to live in harmony with nature, we must respect and understand this interaction, and we must also learn to incorporate it into decision-making processes. Those of us who study finance deal with value and risk assessments; perspectives that are important to include. This has been underestimated," says NHH researchers, adding:
`The consequence of this way of thinking is that each company considers nature risk in a good way, then we can live better with nature regardless of how the development may turn out.´