How NABERS ratings help with Nature Impacts Reporting

• Taskforce on Nature-Related Financial Disclosures is adopted by major 440 companies representing over $16 trillion in asset under management
• NABERS Energy, Water, Waste and carbon neutral certifications can be used for TNFD reporting
• Not just offices but hotels, shopping centres, schools, hospitals all play part in TNFD
• Australia’s Strategy for Nature 2024-2030 aims to halt and reverse biodiversity loss by 2030

The Taskforce on Nature-Related Financial Disclosures (TNFD) reporting framework is gaining traction world-wide, with institutions including banks, real estate investment trusts, manufacturers, consumer goods multinationals and large consulting firms among those participating in the first tranche of formal reporting.

The framework uses an ecosystem services lens, which goes beyond basic environmental impact statement approaches such as what endangered or vulnerable species are found at a site.

Ecosystem services include such dimensions as freshwater supplies, waste cycling, climate regulation, soil fertility and maintaining biodiversity. TNFD reports use a method of ‘Locate, Evaluate, Assess and Prepare’ (LEAP) to develop a practical map of the risks, opportunities, dependencies and progress in addressing each of the nature factors that are relevant for an organisation.

It also locates this in the context of business operations. The United Nations Environment Program (UNEP) has facilitated the development of an on-line tool, ENCORE, which gives visibility to the typical upstream and downstream supply chain aspects for major industry classifications.

For example, the hotel sector has upstream risks and opportunities from nature in the form of ecosystem services including visual amenity, agricultural produce, air filtration services, freshwater supplies and flood mitigation. It has downstream risks and opportunities including solid waste remediation, water purification, noise attenuation and biodiversity protection.

Looking at nature through the lens of ecosystem services also enables a business or organisation to start to calculate the financial value of what nature provides, and the financial cost of negative impacts.

In then moving to developing a nature impacts strategy, the key is to establish metrics and data points to benchmark business as usual and determine a trajectory for improvement.

NABERS ratings can be an asset in this, as they incorporate metrics and targets that can be correlated to key categories of nature impacts.

Carbon emissions, for example, are an important element of risks and opportunities relating to nature’s climate control services. NABERS Energy ratings are a crucial data point for the current level of emissions (scope 1 and 2) associated with energy use. Any work being done of a comprehensive decarbonisation pathway for assets or operations can therefore contribute to and form part of this aspect of nature-related reporting.

This can also be a strong reason for procuring nature-based offsets as part of a true net zero pathway that is using NABERS audits as a key tool for benchmarking progress to reduce emissions.

Upstream and downstream matters relating to freshwater use can be understood with the assistance of a NABERS Water rating.

In pilot stage TNFD reporting generated by a leading Asian property group, consumption targets for fresh water have been utilised in the strategy for reducing risks to nature. For any Australian entity, a NABERS water rating as part of a broader water efficiency strategy supports determining appropriate targets and tracking progress. Similarly, in working with the supply chain, seeking data from key suppliers on their own water efficiency metrics is important, and either their NABERS water rating, or some other form of third-party verification such as an EPD is probably necessary.

Waste is an area where there may be substantial opportunities, through adjusting procurement and end of process waste management to implement circular economy principles. NABERS Waste gives the data and baselines that help an organisation identify where waste is being generated, and what proportion of that waste is going to landfill, clearly a negative impact on nature.

A continual improvement strategy to reduce waste can incorporate nature considerations, for example, procurement of materials and products made from 100% recycled inputs that are themselves fully recyclable at end of life. This reduces the nature impacts associated with extraction, transport and processing of virgin resources.

The real benefits come when a holistic, integrated approach is developed that recognises all the ways in which a business or organisation is dependent on nature, then finds ways to add value to operations and decisions through protecting those ecosystem services for future generations.