EY says nature disclosures are too focused on ‘telling good news stories’

Report highlights disconnect between nature-related communications and strategy, as TNFD publishes update on membership 

EY has warned that companies are treating their nature-related communications as a way to tell ‘good news stories’ instead of seeing them as strategic disclosures. 

After assessing more than 400 companies, the financial services firm concluded on Tuesday that, while 93% mention nature in their public reports, the information was “not necessarily comprehensive”. 

For example, just 26% align their disclosures with the Taskforce on Nature-related Financial Disclosures (TNFD), which seeks to offer firms a framework for explaining their risks, impacts and opportunities stemming from nature. 

“Instead, they are primarily trying to derive reputational benefits from nature reporting by sharing good news stories,” said EY. 

The report said it was “vital” that firms addressed this, “otherwise, as the volume of nature-related reporting increases, it will become harder for users of nature disclosures to know whether information is material”. 

Consumer goods and extractives companies had the highest levels of alignment with TNFD recommendations, at just over 30% each.  

The services sector was the least aligned, at 19%. 

EY praised Australian retailer Woolworth’s for its commitment to be nature-regenerative by 2050, and US chemical firm Dow’s for its approach to water, land and wood sourcing.  

TNFD update

More than 600 organisations from over 50 countries have now pledged to report against the TNFD’s framework, according to an update from the initiative this week. 

More than 500 reports “with some alignment” have already been published since the recommendations were launched two years ago, it said.   

Elsewhere, the Science Based Targets Network (SBTN) launched a pilot this month to help it develop guidance on setting ocean-based corporate targets. 

The body is asking companies in the space to participate in the trial, which focuses on seafood. 

So far, UK supermarket Waitrose, Orkla Foods Sweden and the Danish Pelagic Producers Organisation are among those signed up.

Lawyers in New Zealand weighed into the nature debate this week when they published a paper exploring the idea of giving nature the same status as shareholders in companies.   

Nature as Shareholder is the work of Steven Moe, partner at New Zealand-based law firm Parry Field Lawyers.