EY Nature Risk Barometer 2024 (EY)

Summary

• The second annual EY Nature Risk Barometer benchmarks reporting against the 14 TNFD recommendations, assessing 369 companies across 10 sectors in the US, Canada and Latin America.p.4
• As of June 2024, over 400 organizations had adopted the TNFD, with only 17 headquartered in the US, eight in Canada and 29 in Latin America.p.6
• Organizations representing $6 trillion in market capitalization and $16 trillion in assets under management have already adopted the TNFD recommendations.p.11
• Five percent of companies assign the Board of Directors direct oversight for nature or biodiversity beyond ESG and sustainability.p.17
• Forty-three percent of companies (157 of 369) are disclosing nature-related metrics.p.18
• Extractives & Minerals Processing leads sectors with mean coverage of 91% and alignment of 27%, followed by Food & Beverage at 88% and 24%.p.22
• Technology & Communications has mean coverage of 63% but alignment of only 11%.p.22

Key insights

1. The TNFD framework sets out 14 recommendations organized around four pillars: governance, strategy, risk and impact management, and metrics and targets.p.5
2. There is a considerable gap between coverage and the quality (alignment) of disclosures against TNFD recommendations.p.17
3. Financials show the lowest coverage on governance at 42%, strategy at 14% and risk and impact management at 22%.p.23
4. Extractives & Minerals Processing leads on governance coverage at 80% and strategy coverage at 61%.p.23
5. Extractives and mining companies showed the lowest alignment with the Strategy pillar, at only 24%, with coverage of 61%.p.25
6. Food and beverage companies showed the lowest alignment with the Strategy pillar, at only 19%, with coverage of 52%.p.26
7. Financial companies are impacted indirectly, and often much more significantly, through exposure to nature-related risks in their lending and investment portfolios.p.27
8. The Kunming-Montreal Global Biodiversity Framework, signed by 196 nations, aims to protect 30% of land and sea areas.p.32