Nature and Biodiversity Round-up: Recent Developments in 2024

Nature and biodiversity have at times appeared to be the ‘poor cousin’ of climate change, generally attracting less policy, media, and legislative attention. In part, this may be because carbon emissions and net zero targets are easier to measure and address from a top-down perspective. In contrast, the risks associated with nature can be complex, subtle, place-specific, and challenging to measure. 

However, biodiversity forms a vital part of many businesses’ products, services, and supply chains. Research has consistently shown that replacing biodiversity and nature with artificial alternatives is significantly more expensive than protecting the nature and biodiversity that we have today. In addition, nature plays a key role in helping businesses to transition to a low carbon economy, since it is unlikely that climate change can be addressed effectively without also protecting against biodiversity loss, and vice versa. 

It is good news, then, that nature has been getting more of the spotlight in 2024, partly driven by a trickle-down from the agreements reached at the 15^th Biodiversity COP in late 2022. Many of these developments, which we summarise below, could help corporates to navigate nature-related challenges and opportunities with more confidence, and range from new legislation to voluntary standards, frameworks, and guidance. 

Ultimately, corporates can best prepare to address nature-related risks, and to seize nature-related opportunities, by engaging with the topic sooner rather than later, and integrating nature and biodiversity into existing processes and policies for addressing climate-related risks, including transition plans. Although some challenges remain (particularly in relation to data), the growing body of guidance should provide a roadmap for getting started. 

United Kingdom

Directors advised by the CCLI to consider nature-related risks when making decisions

On 11 March 2024, a team of barristers published a legal opinion commissioned by the Commonwealth Climate and Law Initiative (the “CCLI Opinion”).

The CCLI Opinion specifically considers the nature-related implications of the existing duty to promote the success of the company and the duty to exercise reasonable care, skill and diligence under sections 172 and 174 of the Companies Act 2006. It suggests that directors who fail to consider non-trivial environmental risks, or who fail to take appropriate mitigation steps to protect the natural resources on which the company relies, may be exposed to claims that they have acted in breach of these duties. The CCLI Opinion raises the prospect of greater stakeholder scrutiny of nature and biodiversity risk following the publication of the new Taskforce on Nature-related Financial Disclosures (“TNFD”) in September 2023.

Importantly, the CCLI Opinion notes that nature-related risks include (but are not limited to) climate-related risks, demonstrating the close connections, and overlaps, between the two. 

The CCLI Opinion advises that it would be prudent for directors to identify the nature-related risks facing their company; assess which of those risks are relevant and non-trivial; take expert advice where appropriate; decide in good faith whether a course of action is appropriate to mitigate those risks and take such steps accordingly; and record their decision-making process in writing. 

Mandatory Biodiversity Net Gain requirements for UK property developments come into force

On 12 February 2024, biodiversity net gain (“BNG”) requirements became mandatory for major new UK property developments under the Town and Country Planning Act 1990 (“TCPA”), and the regulations came into effect for non-major developments on 2 April 2024. Each development (unless exempt)[1] must provide at least a 10% increase in biodiversity value which can be achieved through onsite biodiversity gains, registered offsite biodiversity gains or statutory biodiversity credits.[2]

In practice, this means that developers applying for planning permission under the TCPA must submit a Biodiversity Gain Plan to the local planning authority, which must be approved before development can commence. There are minimum national information requirements related to BNG which the applicant must provide. 

The BNG regime has not yet commenced for planning permissions which have been granted through other (non-TCPA) routes to permission. The Government expects to apply BNG to development consents under the Nationally Significant Infrastructure Projects regime from November 2025.

Europe

Nature restoration may be regulated, subject to member states reaching agreement

On 27 February 2024, the European Parliament gave its final approval to the Regulation on Nature Restoration (the “NRR”) – the first EU-wide legislation to set legally binding targets for the restoration of biodiversity and degraded ecosystems. The NRR still needs to be adopted by the EU Council before coming into force, after which EU countries will be expected to draft national restoration plans detailing how they intend to achieve the restoration targets. Recent delays have, however, introduced some uncertainty as to whether the NRR has sufficient support to be finally adopted. Several member states have indicated that they would oppose the proposal, with the agricultural sector lobbying against it. Reaching agreement may now be challenging, as time is limited ahead of the European elections in June.

The main objective of the NRR is to provide for the long-term recovery of nature in the EU’s land and sea areas, with binding restoration targets for specific habitats and species. These measures should cover at least 20% of the EU’s land and sea areas by 2030, and all ecosystems in need of restoration by 2050. 

The habitat types covered by the NRR are far-reaching in scope – from wetlands and grasslands, forests, rivers and lakes to seagrass and coral beds. The law sets specific targets for nature restoration in the listed habitat types. It also provides for an emergency brake, allowing targets to be suspended under exceptional circumstances if they severely reduce the agricultural land needed for sufficient food production for EU consumption.

Belgium introduces the offence of “ecocide”

On 22 February 2024, Belgium’s Federal Parliament introduced the new offence of ecocide as part of its reform of Belgium’s criminal code. In doing so, Belgium became one of the first European countries to introduce such an offence, with France otherwise recognising a crime of causing “serious and lasting damage” to the environment under its national law since 2021.

The new offence is aimed at preventing and punishing severe cases of environmental degradation and vandalism, specifically the “deliberate causing” of “an unlawful action causing serious, widespread and long-term damage to the environment” with “the knowledge that this act causes such damage.” The punishment for individuals may include up to 20 years in prison, whilst corporations could face fines of up to €1.6m. 

The offence aligns with the EU’s Environmental Crime Directive (“ECD”), which is currently being revised to increase the list of environmental crimes at the EU level from nine to 20. Although not specifically termed an “ecocide” offence, the changes include the incorporation of a “qualified offence” clause. Under this clause, ECD offences which are committed intentionally and that have substantial impacts on certain ecosystems are “qualified” offences which carry stricter penalties and sanctions. 

The new Belgian criminal code and the offence of ecocide will enter into force two years after its publication in the Belgian Gazette – expected to be in H1 of 2026. Bills introducing “ecocide” offences are also in discussions in the Netherlands and Spain.

EU releases biodiversity risk assessment framework

In February, the European Commission published a final report which sets out a methodological framework to help financial institutions improve how they measure and quantify biodiversity risk. The framework is aimed at all types of financial institution, and the structure is designed to assist institutions at varying stages of understanding nature-related risks. The framework goes through several stages of risk assessment, from identification to assessing materiality, and aligns with the TNFD’s approach.

While the European Commission notes that this should improve “preparedness to address and manage risks emanating from environmental degradation and biodiversity risk” in the sector, it still recognises that this is an “evolving field and so best practice and better data will continue to emerge.”

International

TNFD updates – early adopters and integrating nature into climate transition plans

In September 2023, the TNFD released its final framework – a voluntary best practice guide on nature-related disclosures (see our blog post here) that follows, and is partly based on, the success of the Taskforce on Climate-related Financial Disclosures. The first cohort of early adopters of the TNFD were announced at the World Economic Forum in Davos in January 2024. They include around 320 companies and financial institutions.

Since the release of the final framework last September, the TNFD has begun to draft guidance on incorporating nature-related information into net zero / climate transition plans, which will likely help to inform the content and scope of climate transition planning. This is particularly relevant at a time when transition planning is expected to become mandatory for large companies in, for example, the UK and EU in the next several years. The TNFD aims to publish this guidance by the next biodiversity COP, which will be held in Colombia in October/November this year. 

GRI publishes update to its biodiversity standard

On 25 January 2024, the Global Reporting Initiative (“GRI”) (a non-profit that provides widely-adopted sustainability reporting standards) published an updated version of its Biodiversity Standard (“GRI 101”) to replace the version published in 2016 (“GRI 304”). GR 101 will formally take effect from 1 January 2026, with the GRI aiming to pilot the standard with early adopters over the next two years. 

A key feature of GR 101 is the inclusion of reporting on biodiversity impacts across the supply chain. GR 101 expands on GRI 304, which focused on the impacts of an organisation’s own operations, to include disclosures relating to products and services in the supply chain with the most significant impacts on biodiversity.

Other features of GR 101 include location-specific impact reporting, with detailed information as to the place and size of operational sites with the most significant impacts on biodiversity, and the introduction of a new disclosure to report on the direct drivers of biodiversity loss, ranging from land and sea use change, exploitation of natural resources and pollution. 

Whilst many reporting frameworks for nature are voluntary for now, we expect to see an increasing focus on nature in mandatory sustainability reporting frameworks. One such example is the EU’s Corporate Sustainability Reporting Directive (the first reports under which are due next year), which includes detailed disclosure requirements on biodiversity and ecosystems.

[1] The biodiversity net gain requirements do not apply to certain types of development. The key exemptions include: (i) development under a de minimis threshold that does not impact a priority habitat, (ii) certain householder / small-scale self-build housebuilding, (iii) development relating to the HS2 network, (iv) urgent Crown development and (v) development granted planning permission under a development order.

[2] Buying statutory biodiversity credits is a last resort option for developers who are unable to deliver BNG via onsite or offsite biodiversity gains. Natural England sells biodiversity credits on behalf of DEFRA, the funds from which will be invested in habitat creation or enhancement.