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In the second of two special Insights In Focus episodes, guest host Mark Rowland shares news and views from COP28 in Dubai. This episode focuses on capacity building within the finance profession and making the business case for a nature-positive transition.


Mark Rowland


  • Sarah Reay, Climate Change Manager, ICAEW
  • Jessica Fries, Executive Chair, A4S
  • Mardi McBrien, Chief of Strategic Affairs and Capacity Building, IFRS Foundation


Mark Rowland: Hello, and welcome to the second ICAEW Insights special coming to you from COP28 in Dubai. I’m Mark Rowland. And in this episode, we’ll be looking at capacity building within the finance profession and the business case for nature. Governments, businesses and financial institutions are waking up to the fact that nature loss is not just an existential crisis for the planet. It’s also a major business risk. It could have a significant impact on the wider financial system and the global economy. ICAEW has been advocating greater emphasis on nature and biodiversity as a business-critical issue. Sarah Reay is with me again. So what have been the stand-out moments since the last episode? Is there anything specific that you’ll be taking away from this week?

Sarah Reay: I think a big stand-out moment for me has really been the youth voice at COP this year. I think it’s been absolutely outstanding. And as well as the first global stock-take, we’ve actually seen the first youth stock-take, which has analysed the youth involvement in climate diplomacy and best practice to elevate young people’s participation in climate discussions. So the findings so far have suggested that involving youth in climate policy actually leads to tangible climate actions at local, regional and global level. So it really reinforces the pivotal role that non-state actors play in driving climate action.

MR: So there’s been a lot of conversation at COP this week around the importance of nature. What messages stand out from that perspective?

SR: Nature-based solutions really can help solve the climate crisis. The World Economic Forum earlier this week launched a guide covering how companies can support value creation through the use of biodiversity credits. In addition to this, some top global development banks and climate funds have launched a global taskforce and a fund to help scale the number and size of ‘debt for nature swaps’ is what they’re being called, where debt is reduced in exchange for protecting ecosystems.

MR: So why should nature and biodiversity matter for accountants, specifically?

SR: Accountants sit at the heart of business, and all businesses depend on nature, whether that’s through their operations, supply chains or customers. The value chains most at risk from nature loss generate more than a half of the world’s GDP through its invaluable services. So nature risk is central in the cashflows, in balance sheets and capital portfolios of organisations across sectors and geographies. And central banks are increasingly recognising nature loss as a source of systemic risk for financial systems and economies. So investors, consumers, stakeholders and the accountants being at the core of this will be demanding greater transparency.

MR: ICAEW, among other organisations, has been trying to make the business case for nature. Are businesses and business owners aware enough of the economic importance of natural capital?

SR: In short, no. The awareness is relatively low outside of the largest entities, I’d say. I don’t think people really realise that over half of the world’s GDP is either moderately or highly dependent on nature and its services and is therefore exposed to nature loss. A nature-positive economy could generate up to $10.1 trillion in annual business value, and create 395 million jobs by 2030. By transforming key sectors such as food, land use, infrastructure and energy. Global efforts are really galvanising around this shift to a nature-positive economy, where nature is being restored, and regenerating rather than declining. So there’s certain risks, but there’s also great opportunities that come with measuring nature.

MR: And how is ICAEW addressing this emphasis on nature? What’s available to members?

SR: So we’ve really been increasing our work on nature in the past 12 months and as part of the Global Accounting Alliance, ICAEW was among 10 of the world’s leading accounting bodies that made a public statement on addressing nature. So this had four key pledges, the first being working with governments to establish and align coherent policy frameworks that accelerate business action on nature. Second, and most important for members, is building our members’ knowledge and understanding of nature-related issues. Third is providing the members with the training and support infrastructure to value and embed nature in decision making. So we’ve done a lot of work around informing members on TNFD (Taskforce on Nature-related Financial Disclosures), which is starting to come through on the ICAEW website. And, finally, there’s supporting the alignment of consistent global regulation and disclosure frameworks. So again, fully supporting the global biodiversity framework, the TNFD and other frameworks such as the ISSB’s (International Sustainability Standards Board) global baselines and the nature work that they may be engaging with in the next 12 months or so.

MR: So we are trying to make the business case for preserving our natural resources and biodiversity. This requires a major mindset shift towards more nature-positive business models. Businesses, especially SMEs, need governments to help them with this. Nature has been a major focus area at COP, alongside transition planning and capacity building. Jessica Fries, A4S Executive Chair, joins me now having just finished delivering a workshop on nature and biodiversity with ICAEW. Thanks for joining us, Jessica.

Jessica Fries: It’s really great to be here.

MR: There’s been a real emphasis on urgent action to reverse nature and biodiversity loss at COP. How can businesses be taking action now?

JF: This is the first COP where you’ve really seen nature starting to focus so prominently. Now, it’s worth just touching on why. We’ve seen, alongside the need for action on climate, we’re seeing a huge fall in biodiversity, ecosystem services, and nature really requiring us to take action rapidly, alongside action on climate change. Here at COP28, the focus is of course on climate change, but we won’t be able to address climate change unless we can also focus on nature. Nature provides a carbon sink, helping us to take greenhouse gases out of the atmosphere. It also builds resilience. We know that we’re already experiencing more physical impacts from climate change, and so being able to leverage nature, to protect us from some of those physical impacts, is really critical. But also, on the flip side, climate impacts nature, and is one of the top five drivers of biodiversity loss. So the two are very much interconnected. And I think that that’s why we’ve seen nature really starting to be a key focus.

MR: But there’s a big shift in thinking for business. What are the potential hurdles for businesses to get on board with this?

JF: It’s a huge amount of GDP globally, that is dependent on nature and ecosystem services. So we know we need to act, even if it’s purely from an economic perspective. And for businesses, there’s been a huge amount of progress made in developing some of the guidance for the business community to be able to take action. Maybe I can just touch on one or two of the areas where business can go to to really help take action. The first is a framework that a lot of the organisations who are supporting business action in this area have developed. And it’s the ACT-D framework. So assess, commit, transform and disclose. There’s a lot more detail on the Accounting for Sustainability website, from ICAEW, and from organisations like Business for Nature and the Capitals Coalition.

MR: So there’s a lot there to digest. What resources are available to help businesses get started with this?

JF: It’s really about how you can assess your impacts and dependencies and the risks and opportunities associated with nature. And there’s an organisation which has then set up some guidance in terms of the second step. So commit, which is called the Science Based Targets Network. A lot of people will be familiar with the SBTI, the Science Based Targets Initiative, which helps to set science-based targets for climate. So this is the equivalent of that for nature. Thirdly, transform. Of course, once you’ve set goals you need to embed into decision making. I think that this is an area where finance can really provide support to others in the business through the skillset that finance professionals bring. And that’s things like making sure that the information on the understanding of those impacts and dependencies is really reflected in the budgeting processes, in the planning, in the understanding of risk and risk management, as well of course as reporting and how to raise capital. Finally, the last step in the process is disclose. So you’ve had recently the launch in September 2023 of the Taskforce for Nature-related Financial Disclosures, and they’ve released their final recommendations. This builds on the same framework that the Task Force on Climate-Related Financial Disclosures developed, so something that will be familiar for many finance and accounting professionals. Alongside that you’ve got developments from the EU. The European Standards include quite a lot of requirements on nature-related disclosures. And of course, with the International Sustainability Standards Board, biodiversity is one of the areas that they’ve highlighted as a potential priority for the next wave of standards that they will be developing. Last reference is GRI, the Global Reporting Initiative. They worked closely with the European Union to develop the European standards, and they have been releasing an updated biodiversity standard. So a lot of really great guidance there to help you get going.

MR: Right. So that’s a lot of resources to help get going. Are there any organisations that are doing the right things at the moment or any good examples that businesses should look to?

JF: When it comes to the Taskforce on Nature-related Financial Disclosures, they’ve only just released the final guidance. But they did develop an iterative process, so they worked with quite a lot of companies to pilot the recommendations. So these really are built on that practical insight. You’re starting now to see companies then releasing their reports, leveraging some of that piloting of the TNFD recommendations. So definitely look out for some of those examples. I think it’s too early to say which organisations are best practice, because there really aren’t enough out there. But go to the A4S website, we’ve got a case study, and more to come there.

Also, TNFD have produced some on their website. So I think that, again, keep an eye out as we go through the financial reporting season. I think you’ll see more and more organisations leveraging the TNFD recommendations to be able to report. I would also say in this area, for many of you, you're probably already looking at some nature-related risks and opportunities. One that is common for a lot of companies is around water. So whether that’s thinking of water consumption, water stress in different regions around the world, or other water-related metrics, not just within your own organisation, but along your whole value chain.

MR: We’re trying to make the business case for embracing nature. So what would you say to make that case?

JF: When it comes to the business case, I think that there are maybe three things that are worth touching on. The first is better decisions. Nature is going to impact all of us. And the collapse in biodiversity and ecosystems is going to have a systemic impact on the economy, and on lives and livelihoods unless we can take urgent action. So really understanding what your impacts and dependencies at a location level along your value chain is going to be a really critical starting point. You can then leverage that information to improve your strategic planning and your risk management processes. You can embed it into your governance, and really have better access to capital.

So that’s the second area, I think, accessing capital. We know more and more investors and banks and other financial actors are interested in investing in companies that are really taking action around sustainability, and are responding not only on climate, but also on nature. The TNFD is going to drive even more interest in that area. And then finally, improved disclosures. For those who are early adopters of this guidance, I think that there will be more profile and more focus and awareness that you can derive by being an early mover and helping to showcase the art of the possible. Don’t worry if you don’t have all of the information – I would really encourage you to take some of those first steps and really be iterating and improving as you go. I think we’re already seeing that. You asked earlier which organisations were getting this right? Those who have produced some of the early case studies, because there are so few of them, are getting a lot of attention right now and are really being able to raise their profile. So I’d encourage everyone to think about how disclosure can support improved decision making, better access to capital, but also awareness of your organisation to the outside world.

MR: As well as setting standards, the IFRS Foundation created a partnership framework for capacity building at COP27 last year. This has helped to drive support and resources around the International Sustainability Standards Board’s S1 and S2 standards. Mardi McBrien, Chief of Strategic Affairs and Capacity Building for the IFRS Foundation joins us now. Hi Mardi.

Mardi McBrien: Hey, it’s great to be here.

MR: For those who don’t know, what is capacity building?

MM: It’s how we build the capability, in our case, to upskill all the actors we need to play a role in getting us the high-quality adoption of our standards. So in our case, it’s everyone from the regulators and the enforcers that bring our standards in, stock exchanges; we’ve got the accountants, of course, but accountants across a big spectrum, so from CFOs right through to those that may have small businesses in a value chain that need to contribute to this, lawyers, corporate governance experts, and right through to even CSOs and all people across the business. Because we have to make sustainability ‘business as usual’ if we’re really going to be able to, you know, upskill, everyone to drive the transition we need to get to, to support that really important next step we have to take.

MR: So we’re now a year on since the launch of the partnership framework. How have things progressed since then?

MM: I also didn’t know how this was going to go when we launched it at COP27. But we’ve been completely overwhelmed with support, and thank you ICAEW for that as well. Right across the board, people have stepped up, given us their support, and sort of jumped right in with hard, tangible outputs that can support either their constituency or the broader global movement to drive that high-quality adoption of our standards, either on a voluntary basis, or support sort of the more top-down regulatory adoption. It’s been absolutely fantastic, but we’ve still got so much more to do, so we need more partners as well.

MR: What’s the scale of the capacity building challenge? It seems like quite a big task.

MM: It’s absolutely massive. And I don’t say that sort of over exaggerating, because I’m prone to go ‘Oh my god, it’s so huge’. Yeah, it really is a huge challenge. We’ve had almost 20 years of voluntary, and we haven’t got the skills and the scale in place yet to really make sure that our markets aren’t going to be affected by climate and wider sustainability risks. We are prepared for that, but also we’re not doing it at the pace that’s needed. And, you know, we saw with TCFD, the Task Force on Climate-Related Financial Disclosures, we’ve had those since 2015, and still then of the 7,000-ish (I’m being quite generous here) disclosing companies, we are getting three or four metrics in some places disclosed, not the full report, again not the full picture. So given that our climate standard, our S2 standard, is based on TCFD, we know we’ve got a huge gap, we need to fill, and our standards are coming on board very, very quickly in jurisdictions both in the global north and the global south. So we know there’s a lot to do, which is why partners make sense, because we can leverage partners around the world. The IFRS Foundation doesn’t traditionally do capacity building. Traditionally, we set the standards and kind of leave it to everybody else. But we know that when we did that with accounting standards, we already have a big accounting architecture out there, if you like, for the traditional financial reporting. We need to now build that for sustainability reporting. And that’s what we’re doing through our partners. And so we don’t tend to do all the work ourselves. We work directly with partners who can help build that resource, and then leverage that out through their markets and their networks to keep building that momentum, if you like, for the adoption.

MR: So if the council were to look to undertake their own capacity building, what resources are available to them?

MM: I think the first place to start is the ICAEW. Because you already have your own training on climate and sustainability that’s freely available, that’s in addition to your qualification that will give you CPD and give you a good grounding on what’s most important. There are other things out there, like the ISSB Knowledge Hub, which has a curated set of resources we have developed with our partners. There’s over 100 there that we already launched at COP28. And we’re building it out fast. And so there’s lots of ‘how to get started’ useful tips there, as well as some more detailed guidance developed by various parties across the world, including bodies, you know, from the accounting profession. So it’s another really helpful resource for you. I would also, you know, do a quick scan of the internet, because there are so many free webinars, guides, things out there, once you know where you want to learn more that you can go to to really dig in. I think the community is really leaning in here to support the whole ecosystem in upskilling. And so there is that, but when in doubt, I mean, contact the Institute and ask them to help to address the real concerns you have, because you won’t be the only one with that same question.

MR: So what’s next on the agenda for the ISSB?

MM: Goodness, that’s a long list. Most importantly, we heard when we launched the two standards, the general requirements standard S1 and the climate standard S2 was that people needed support. So supporting adoption of those two standards is right at the heart of everything we’ll be doing for the next few years. On top of that, before Christmas, so we’re recording this in December, so by the end of 2023, so if you’re listening to this in 2024, they’ll already be there – on our website, we will have guidance on the nexus between climate and biodiversity, just transition and adaptation, because we’re hearing a lot that those are key resources people need to support the adoption of and reporting of S2. Because if, you know, if you’re looking at your climate impact and you decide ‘Oh goodness, actually through climate I have got an impact on land’, you need to report that under our standards, so we’re providing more guidance to help you do that now. We’re also working on a digital taxonomy, so that digital taxonomy will be launched by the middle of 2024. So that’s making sure there’s even more accessible data to the market to help investors make better decisions on capital allocation, more resilient economies in the long run.

We’re also soon to release the international ISSB standards, so the updates to the standards that we worked on earlier this year, and the board is currently talking about what we do next beyond climate. So they ran a consultation in the middle of 2023 on what topics would come next. And those topics were human rights, human capital, ecosystems, ecosystem services and biodiversity, and integration in reporting. And across the first quarter of 2024, they’ll be talking in their public sessions about what’s coming next. So watch this space on that for the formal standard setting piece. And we never stop on interoperability. So working very closely with our friends at GRI, working very closely with the European Union and the US and others to make sure that we drive as much alignment as we can between existing requirements that might be in the market and our standards to help them prepare, to make sure this is as cost-efficient and effective as possible.

MR: So just finally, obviously we’re here at COP28. What would have been your main takeaways, you know, what’s got you fired up and what’s got you excited?

MM: The bits that have made me really excited, the bits that will continue to get me out of bed for the next year and make me want to come back to another COP – I think this is my 12th or 13th COP, which makes me feel a bit sick that we’ve even needed 12 or 13 COPs to solve, you know, an existential crisis like climate change and have governments commit to it – is the overwhelming support we’ve had at the ISSB from this COP. It doesn’t matter who we’re talking to or where, there is overwhelming support for the work of the standards and the role they can play. And that’s great, but also the collaboration and the cooperation that is really coming from all stakeholders on how we can work together. You know, reporting only plays a very small part of the system of reporting and disclosure. And what’s really important is all the action before that, and how we can sort of see all the players coming together to work to solve these problems and advance the agendas. That’s really exciting. And that gives me so much more energy to take back, to keep going and keep moving this agenda forward.

MR: Brilliant. Thank you so much for your time, Mardi.

MM: It’s a pleasure. Thanks for having me.

MR: That’s all for this episode, and also brings a close to ICAEW’s time on the ground at COP28. Thanks again Mardi, and to Sarah and Jessica for sharing their insights from the conference. You can learn more about the topics we’ve discussed today by visiting the Making COP Count hub on the ICAEW website, which we’ll keep updating with new content in the weeks to come. You’ll find a link to that in the show notes for this episode. Usual host Philippa Lamb will be back next episode. She will be reviewing 2023 and gathering predictions for 2024 from some familiar guests: Iain Wright, ICAEW Managing Director, Reputation and Influence; Frances Haque, Chief Economist at Santander UK; and David Williamson, Political Editor at the Sunday Express. Thanks for being with us today. And if you’re finding these podcasts useful, please do subscribe to the series on your favourite podcast app and never miss an episode.

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