Materiality is the quality of being relevant or significant, and in terms of business and finance, materiality applies to all items that must be recorded or reported in detail in a business’s financial statements as reasonably likely to impact investors’ decision-making. 

Double materiality: For corporate sustainability reporting, the concept of double materiality applies – it goes beyond that which affects the company and its investors, extending to information on how the firm is impacting society and the environment. 

The EU Corporate Sustainability Reporting Directive (CSRD) mandates a double materiality assessment for around 50,000 reporting companies from 2024 onwards. 

The European Sustainability Reporting Standards (ESRS) explains that a double materiality assessment takes two perspectives, sometimes referred to as an ‘outside in’ / ‘inside out’ approach: 

              (1) an impact perspective “when it pertains to the [entity’s] material actual or potential, positive or negative impacts on people or the environment over the short-, medium- and long-term”; and 

              (2) a financial perspective “if it triggers or could reasonably be expected to trigger material financial effects on the [entity].” 

A double materiality assessment must cover both a business’ own operations as well as upstream and downstream value chain. It must consider the topics and subtopics covered in the 10 ESRS topical standards. These include climate change, pollution, water, biodiversity, circular economy and topics relating to governance and the workforce. 

Detailed reporting on each is required only if the company decides, following a double materiality assessment involving all stakeholders, that it is ‘material’ or relevant under the reporting rules. Where a company determines a topic to not be material, it must explain its rationale in detail. It is still necessary to have a long-term strategy in place to address your organisation’s future impacts and dependencies on nature (and future risks resulting from) biodiversity loss and climate change. 

Read more: https://www.cisl.cam.ac.uk/news/blog/double-materiality-corporate-sustainability-reporting-encompass-societal-and-environmental-impacts 

https://www.charteredaccountants.ie/Accountancy-Ireland/Articles2/Technical/Latest-News/Article-item/the-corporate-sustainability-reporting-directive-getting-to-grips-with-double-materiality 

 

 

 

 

A major collaborative initiative has been launched aimed at driving alignment around the term ‘nature positive’ in order to support broader, longer-term efforts to deliver nature-positive outcomes. Read the full definition of Nature Positive here.

The Nature Positive Initiative includes Business for Nature, Capitals Coalition, the Global Reporting Initiative and the Taskforce on Nature-Related Financial Disclosures. The development of ‘Nature positive by 2030’ as the global goal for nature – equivalent to the 1.5C goal that exists for climate, has been ongoing since 2019. Read the full definition of Nature Positive here.

This goal refers to halting and reversing biodiversity loss by 2030 from a 2020 baseline, through measurable gains in the health, abundance, diversity and resilience of species, ecosystems, and natural processes.

The Nature Positive Initiative states: “Governments, business and civil society have rallied behind the ambition inherent in a nature-positive approach, with reversing biodiversity loss recognised as critical to combating the global climate crisis, preventing future pandemics, addressing water and food insecurity, supporting sustainable and equitable development, and recognising and addressing the rights and contributions of Indigenous Peoples.

“In December 2022, the goal was codified in the mission of the landmark Kunming-Montreal Global Biodiversity Framework, with its adoption under the UN Convention on Biological Diversity described as the ‘Paris moment’ for nature.

“At the same time, use of the term ‘nature positive’ has grown without a clear and aligned understanding among business, finance, government and civil society actors about what the phrase represents and does not represent. Ensuring clarity and preserving the integrity of the definition is now a priority to ensure the necessary actions and accountability.

“A priority will be supporting the rollout of the common definition, metrics and standardised tools and practices that enable all to appropriately measure and report on their impact and contributions at the actor level. The initiative will also advocate for and support the full implementation of the Kunming-Montreal Global Biodiversity Framework by governments and other stakeholders.”

Other organisations involved include African Natural Capital Alliance, BirdLife International, Campaign for Nature, Conservation International, Global Commons Alliance, ICLEI – Local Governments for Sustainability, Indigenous Information Network, InTent, IUCN (International Union for Conservation of Nature), Nature Positive Universities / University of Oxford, Nature4Climate, NatureFinance,  Potsdam Institute for Climate Impact Research, Principles for Responsible Investment, Science Based Targets Network, The Climate Champions Team, The Nature Conservancy, The Pew Charitable Trusts, Wildlife Conservation Society, World Business Council for Sustainable Development, IUCN World Commission on Protected Areas, World Resources Institute, and WWF International.

This core group of organisations will be tasked with setting the NPI’s strategic direction, policy positions, and joint activities. They will also be responsible for convening, liaising with, and coordinating the active engagement of a much broader and inclusive constituency of partner organisations to ensure all stakeholders’ views are considered and to help support efforts to deliver nature-positive outcomes across society. An NPI Partnership is open to all relevant institutions and organisations who want to support and implement the global goal for nature.

For further information on the Nature Positive Initiative, please contact naturepositiveinitiative@gmail.com.

See https://www.naturepositive.org/

 

What is a community of practice?

A community of practice is a group of people who share a common concern, are facing similar issues, or are striving to reach similar goals.

 

Participation in a community of practice is voluntary. Members should feel free to share their experiences and knowledge in free-flowing discussions, ask questions of one another, foster new approaches to problems, and work together to define best practices. 

 

Background

Lave and Wenger first coined the term, ‘community of practice’ in Situated Learning: Legitimate peripheral participation. The authors proposed that learning is fundamentally a social process and that communities create the social fabric necessary for collective learning. According to Wenger (1998), communities of practice provide five critical functions:

  • Educate by collecting and sharing information related to questions and issues of practice.
  • Support by organizing interactions and collaboration among members.
  • Cultivate by assisting groups to start and sustain their learning.
  • Encourage by promoting the work of members through discussion and sharing.
  • Integrate by encouraging members to use their new knowledge for real change in their own work.

 

Harvard Business Review describes communities of practice as the ‘hidden fountainhead of knowledge development and therefore the key to the challenge of the knowledge economy’. 

 

Our communities

The Business for Biodiversity platform is setting up multi-sector communities of practice, where business leaders can build and share knowledge on how to protect nature and promote biodiversity. The platform will provide infrastructure, coordination and support for each community, while the knowledge, agenda and outcomes will be driven by the members.