Impact on nature soon to be mandatory in annual reporting

The climate summit in Egypt had barely concluded before the next United Nations international conference was scheduled: the COP15 on biodiversity in Montreal. As we know, climate concerns are running very high and few will be surprised that biodiversity is also under great pressure. Over the past fifty years, the mammal, bird, reptile, amphibian, and fish populations have declined in numbers by nearly seventy percent. Furthermore, the number of plant and animal species is also declining at an astounding rate. In 2022, one million species are threatened with extinction.

Annual reports to incorporate biodiversity reporting

Under these troubling omens, the summit in Canada began two weeks ago. Even so, Bas Rüter, who attended part of COP15 as the bank's delegate, returned to the Netherlands last weekend with a good feeling. "Politically, as with the climate summit, this is a highly complex and difficult story, with developing countries demanding money from developed countries. All that remains tricky. However, when I look not only at the private sector’s attendance in Montreal but its willingness, I’m truly optimistic," Rüter says of COP15. In fact, the summit concluded with an agreement on biodiversity which states that, by 2030, at least thirty percent of all land and water on Earth should be protected areas.

Rüter was one among more than a thousand representatives from the private sector. As he points out, "That number alone says a lot because at the previous biodiversity summit, there were barely forty people from that world. And the energy during our meetings was really great." What, specifically, did that energy yield? Rüter talks about the agreement for many financial institutions and large companies to begin reporting on biodiversity. There will be regulations on reporting for all large companies and financial institutions. Every large company will have to be very transparent about this and provide reporting, including on their supply chain," according to Rüter, who expects these regulations to be integrated into financial sector supervision as early as a year or two.

Clients’ impact on nature

That’s why, for him, the outcome of this summit can truly be considered positive: "We’re moving towards reporting on nature in the near future, probably based on a system co-designed by Rabobank." Rabo's role includes the bank's membership, via Bas Rüter, who is on the Task Force for Nature-Related Financial Disclosure (TNFD). At present, this group is developing indicators for reporting on nature. “In practice, for us, that reporting is based partly on tools from the science-based targets for nature (SBTs) and a UN tool developed specifically for this purpose,” Rüter further explains.

“For Rabobank, the bottom line is that we’re very dependent on and have a significant impact on nature through our clients.” And the reason for this is clear: the large number of clients who are in the Food & Agri sector. However, as Rüter notes, "That brings risks, of course, but above all, I see opportunities." One of those opportunities was nicely incorporated this weekend in a press release dispatched by several Dutch banks and financial institutions together with nature organizations. In this press release, they call on the Dutch cabinet to make nature-enhancing and nature-protecting construction of offshore wind farms the standard.

"That's also where you see that we have the momentum to push forward now and link new economic activity with efforts to save the Earth's biodiversity. If we can maintain that energy in the private sector, it will also positively influence the public debate on this," remarks Rüter.

New propositions

So, to his mind, a real step has been taken in Canada. And he’s confident that additional steps will soon follow at the bank. In Rüter’s words, "This summit further raises the awareness about biodiversity. And, within Rabobank, that provides the impetus to continue developing propositions for clients that promote biodiversity." Like the biodiversity monitor that Rabobank has been deploying for some time with clients in the dairy sector. The bank provides interest rate discounts to those who score well on this monitor.

“We’ll soon expand that to arable farming and will offer it to our clients beyond the Netherlands," explains Rüter. However, Rabobank's AGRI3Fund (for sustainable agriculture and forestry), Rabo Carbon Bank (propositions for buying and selling CO2 credits and other carbon-reduction solutions), and Acorn (a project that helps companies offset their CO2 emissions) also have major positive impacts on biodiversity. Together with the reporting that’s now coming in, this ensured that Bas Rüter returned from COP15 with a good feeling, despite the confirmation in Montreal that the state of the world's biodiversity is beyond worrisome.