57
AUTHORS:
Clyde & Co: Nigel Brook, Wynne Lawrence, Zaneta Sedilekova, Catriona Campbell, Alisha Kumar, Jayde Pulford, Amy Ross, Isabelle Merchat, Chidozie Ajike Kachi-Agwu, Ana Favretto, Alysha Patel and William Ferris, Emily Caldwell, Alessandro Ferrari, Adil Tirmizi Clyde & Co is a global law firm providing a complete service to clients in its core sectors of insurance, transport, energy, infrastructure and trade & commodities. From developed to emerging markets, Clyde & Co supports its clients by putting the power of a globally integrated firm at their disposal with a range of seamless and efficient services and the very best, commercially minded, legal advice. Since 2016, Clyde & Co has developed a Climate Change Risk and Resilience Practice, engaging with other thought leaders and guiding clients on the risks of climate change to financial markets and the opportunities brought about by the transition to a sustainable economy. Clyde & Co’s practice includes regulatory, consultancy, risk assessment and monitoring work, drawing on an international network and deep subject-matter expertise in the firm’s core sectors. We deliver strategic advice to clients on climate, biodiversity and wider environmental liability risks. The Global Resilience Partnership: Nathanial Matthews, Anastasia Brainich, Ida Gabrielsson, Ameil Harikishun, Albert Norström, Cibele Queiroz, Shuchi Vora The Global Resilience Partnership (GRP) is a diverse group of organisations working together to surface and scale innovation, share and advance knowledge, and influence policy towards a more resilient world. At the Global Resilience Partnership, we envision a world where people and places are able to persist, adapt and transform in the face of shocks, uncertainty, and change. Together, we work on the ground to surface and scale innovation, share and advance knowledge, and influence policy. We believe that resilience underpins sustainable development in an increasingly unpredictable world. GRP is made up of 65+ organisations that have joined forces to work together towards this vision.
M I T I GAT I NG B I OD I V E R S I T Y R I S K : AC T I ON P L AN
Any company operating in or with important relationships in the EU or other jurisdictions where mandatory due diligence standards are arising, should ensure that they understand the changing regulatory landscape, prepare for incoming legislation, and adapt business plans to account for the new risk landscape, including the emergence of foreseeable biodiversity liability risk. Forward-looking companies will begin their journey now, preparing for eventual compliance as and when nature- related disclosure standards solidify and mandatory due diligence laws come into effect.
Engage with companies with whom the company has “established business relationships” on what they are doing to understand and manage biodiversity risk and due diligence obligations within their own operations and those of their group and supply chains. Identify other corporates in the same sector to benchmark and discuss potential collaboration and best-practice sharing on compliance. Conduct a value chain mapping process and identify human rights and environmental risks, including biodiversity impacts and dependencies.
Identify and consider relevant biodiversity risk assessment tools, frameworks and disclosure standards, including the Global Reporting Initiative’s update of its 2016 Biodiversity Standard 284 (expected late 2022), CDP’s updated corporate questionnaire, 285 Science Based Targets Network targets for nature, 286 and the Climate Disclosure Standards Board (CDSB) biodiversity application guidance. 287 Identify any relevant sectoral consortia with standard-setting or certification regimes. Examples include the Roundtable for Sustainable Palm Oil, 288 Better Cotton, 289 and the Roundtable on Responsible Soy Association 290 .
The following options may be under consideration:
Audit value chain contracts for oversight, control and compliance mechanisms.
Understand
Prepare
Use scenario analysis to identify and scope biodiversity risks (both the risks to the company and the risks that the company’s operations pose to nature).
Gain familiarity with the UN Guiding Principles, OECD Guidelines and OECD Due Diligence Guidance for Responsible Business Conduct, ensuring these soft law requirements (which will form the basis for mandatory due diligence regimes) have been shared with and understood by key decision-makers and management. Identify any further relevant sector- specific guidelines published by OECD. Be aware of both existing and incoming due diligence regulations in all relevant jurisdictions, particularly the incoming EU Corporate Due Diligence Directive, and work with risk management functions or external counsel to identify and scope possible legal, regulatory and liability risks. Stay abreast of the progress of the Taskforce for Nature-related Financial Disclosures and consider whether the company or its trading partners could be considered part of a “high impact” or “high dependency” sector.
Identify whether the company, its subsidiaries, or its direct or indirect value chain partners fall within scope of the draft EU Corporate Due Diligence Directive and/or national mHREDD laws. Identify the company’s “established business relationships” as defined under the EU Draft Due Diligence Directive. Train management on any mandatory due diligence requirements, ensuring responsible persons are aware of the scope of the requirements and risks, including directors’ duties of care. 284 Patrick de Cambourg, EFRAG and GRI to co-construct biodiversity standard, GRI, 1 December 2021. 285 CDP reports record number of disclosures and unveils new strategy to help further tackle climate and ecological emergency, CDP, 14 October 2021. 286 SCIENCE-BASED TARGETS for NATURE Initial Guidance for Business, Science Based Targets Network, September 2020. 287 Application guidance for biodiversity-relatred disclosures, Climate Disclosure Standards Board, November 2021. 288 Roundtable on Sustainable Palm Oil. 289 Better Cotton. 290 Roundtable on Responsible Soy Association.
Engage with insurers on biodiversity risk management.
Adapt
Implement mandatory human rights and environmental due diligence in accordance with relevant regulations.
Report on nature-related financial risks in line with existing standards.
Made with FlippingBook flipbook maker