Engage relevant third-party stakeholders
While undertaking the LEAP approach, corporate and financial institution analysts and executives are encouraged to actively engage relevant third-party stakeholders. These include local government authorities, scientific and conservation partners, local and indigenous community organisations, and other businesses dependent on ecosystem services and impacting nature in the same or connected ecosystems.
Engagement with these partners, particularly local and indigenous communities, which are long-term stakeholders in and stewards of the ecosystem, can yield valuable additional information. This can inform a robust assessment about the business-nature interface of the company, its dependencies and impacts on environmental assets and ecosystem services, cumulative impacts, other dependencies on those assets and services; and ultimately the materiality of its nature-related risks and opportunities.
Engagement with local communities, non-profits and governments enriches the organisation’s impact assessment. A complete and robust assessment includes not only an analysis of the implications of nature-related risks and opportunities for the organisation itself, but also of how impacts on society may affect the organization now and in the future. Local communities and civil society groups may have specific perspectives on and experience of how an organisation’s interactions with nature affect them. They may also have specific knowledge and expertise to offer on how to measure and assess the integrity and resilience of local ecosystems. Considering these perspectives in the impact assessment can strengthen management’s confidence in the forward outlook on the organisation or investment portfolio’s nature-related risk and opportunities.
Collaboration with other businesses, including supply chain partners upstream and customers downstream, provides essential insights and additional resources for every step of the assessment process. Given the globalised nature of value chains, trade, economic and financial flows, nature dependencies and impacts can be significant outside the organisation’s direct operations. This is often where organisations and investors can have blind spots in their risk assessment: physical risks along the value chain can create transition risks, such as regulatory, litigation and reputational risks, that have not been adequately foreseen. Engaging other businesses with similar or shared dependencies in a specific ecosystem may help to provide new perspectives on dependencies, impacts and risks that the organisation has not adequately identified itself.
Stakeholder engagement and collaboration can improve the robustness of the assessment. Sharing resources and expertise with other organisations, and experiences with wider civil society actors, can make the impact assessment more collective, holistic and robust. Collaboration activities could include meeting with risk management teams of key economic peers that have oversight of, or expertise in, some of the drivers of nature-related risks and opportunities. Engagement actions with local communities and civil society groups should be recurring and could include meeting with representatives to share their views and experiences on impacts. Organisations should discuss how outcomes and results may be refined in the future and what implications they present for both the organisation and the stakeholders themselves.
Stakeholder, including rights-holder, engagement
Engagement with stakeholders, including rights-holders, is an important component of the LEAP approach, which runs through all phases of LEAP. The language in LEAP in v0.3 has been updated to ‘stakeholder, including rights-holder engagement’ to reflect the engagement approach and requirements that may be required with rights-holders, as distinct from other types of stakeholders.
For v0.4 of the beta framework, the TNFD will develop further guidance on stakeholder, including rights-holder, engagement, drawing on the UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises and other best practice frameworks and principles. The TNFD discussion paper on ‘Social dimensions of nature-related risk management and disclosure – Considerations for the TNFD framework’ has been released as part of v0.3. This paper aims to encourage further feedback to the Taskforce on these considerations as the TNFD continues its dialogue with a range of stakeholders and rights-holders, including knowledge partners, Indigenous Peoples and Local Communities (IPLCs) representatives and civil society organisations; and learns through the experience of pilots tests of the beta framework, including those led by Indigenous-led enterprises (see TNFD’s consultation and engagement section).