Counting nature because nature counts

Overview

Recording date - 2 July 2024

A poll at the recent Institute of Directors’ Leadership Conference showed that only 18 percent of directors had read the Aotearoa Circle’s advice on nature-related legal risks for directors.

While the financial and legal risks that climate change present are increasingly acknowledged, the environmental impacts and dependencies of companies on water, land, and the atmosphere are broader than climate risk and present an increasing challenge (and potential liability) for directors.

Roughly half of the world’s GDP – US$44 trillion of economic value generation – is highly or moderately dependent on nature. Closer to home, 80 percent of New Zealand’s exports by value are going to markets that have mandatory climate and environmental, social and governance (ESG) reporting in force or proposed.

But nature isn’t another “optional add-on” – it’s the E in ESG – and to address this increasing risk, directors need to understand their organisations’ dependencies and impacts on this limited resource. Nature also presents business opportunities, such as the critical role it plays in supporting climate change transition and adaptation.