Companies Urged to Take Stock of Their Impact on Nature and Related Risks

Companies should consider the natural world as core to their business and report their effect on it in much more detail, according to a U.N.-funded group that promotes sustainable business practices. But assessing environmental impact remains tricky.

The latest draft framework published by the Taskforce on Nature-Related Financial Disclosures aims to help big businesses and financial institutions report and act on nature-related risks, covering issues including deforestation, pollution, water stress and overfarming. It follows previous drafts, with a final version slated to be published in September.

Depletion of resources and damage to rivers and forests should be seen as integral to firms’ operations, and not merely a matter of corporate responsibility, said Tony Goldner, the TNFD’s executive director. “We used to think of nature as an endless supplier of resources into our business practices,” he said. “We’re trying to shift the conversation around the nature of the relationship between nature and business.”

The final framework should give priority to the end result in natural areas, said Kat Bruce, founder and director of environmental-DNA startup NatureMetrics.

“Creating a baseline on the state of nature in…priority areas and then ongoing monitoring to track progress over time is key,” she said, noting that new technology allowed for collection of much more solid biodiversity data.

“We also need to focus on how effective company actions are to mitigate risks,” Ms. Bruce said. The current guidance is a “solid step,” she said. “But we must not stop there.”

The TNFD is a market-led initiative but funded by the United Nations. It brings together 40 corporate executives, including Deputy Environment Director Alexandre Capelli of French luxury-goods group LVMH Moët Hennessy Louis Vuitton SE; GSK PLC head of corporate responsibility Sarah Dyson; Renata Pollini, head of nature at Swiss cement maker Holcim Ltd.; and Koushik Chatterjee, chief financial officer at India’s Tata Steel Ltd.

Some $44 trillion of global economic value is moderately or highly dependent on nature, according to the World Economic Forum. The collapse of natural systems could wipe $2.7 trillion a year from the global economy by 2030, according to the World Bank.

Companies and shareholders should pay more attention to the material risk of natural degradation, Mr. Goldner said. “Dependency is the pathway to risk,” he said. “If you’re investing in a fast-growing agricultural company in an area where there is water stress, that should trigger questions,” he said.

“What does that tell the investor about the ability to keep growing at that same rate?”

The draft framework covers three areas that should be assessed by large companies and financial institutions: the use of land, freshwater and oceans; pollution and pollution removal; and resource use and replenishment. The framework highlights the potential use of bidirectional metrics, that is to say, positive effects as well as negative, Mr. Goldner said.

A fourth indicator, on climate change, is covered by a separate framework set out by the Taskforce on Climate-Related Financial Disclosures, or TCFD.

Companies’ effect on climate change is relatively simple to measure. Emissions can be calculated in metric tons, and companies use shared rules that enable comparisons between one business and another, even if reporting remains patchy and partly based on estimates.

But reaching “nature positive”—as the TNFD aims to achieve—is a more nebulous concept, Mr. Goldner acknowledged. “There’s some work to do reaching a consensus on what nature positive looks like,” he said. It would likely encompass a basket of metrics, rather than a single indicator, he added.

The TNFD’s draft comes after nations agreed on a new international framework that will oblige large corporations to show they are reducing their impact on the world’s natural life.

Public subsidies seen as harmful for biodiversity will be cut by $500 billion a year under the Global Biodiversity Framework, or GBF, reached at the United Nations’ COP15 conference on biodiversity in Montreal in December.

Under the GBF, governments between now and 2030 will introduce laws and policy measures requiring large companies to disclose and reduce the damage done to ecosystems from their operations, supply chains and portfolios. They will also be required to provide information to the public needed for more sustainable consumption.

A previous draft requirement for businesses to reduce their negative impact on the environment by at least half wasn’t included in the final agreement, which doesn’t specify the extent of the required actions. Nearly 200 countries signed on to the final agreement. The U.S. wasn’t an official participant.

The TNFD’s framework aims to help businesses align their reporting and actions to global policy goals, such as the GBF, the task force said. The draft framework includes sector-specific guidance for areas including agriculture, mining, energy and financial services.

Guidance for other industries, including textiles, will be released on a rolling basis over the coming months, the TNFD said.

Former New Hampshire Gov. Chris Sununu delivered a warning to Treasury Secretary Scott Bessent during a recent visit to Washington: Already-high airfares will surge if the war in Iran doesn’t end soon.

Sununu, a Republican who represents some of the biggest airlines as president of the industry group Airlines for America, has for weeks sounded the alarm to Trump administration officials about the economic fallout from high jet fuel prices. The war, Sununu has argued, must come to a close soon, or things will get worse.

Administration officials have gotten the message.

Privately, President Trump’s advisers are increasingly worried that Republicans will pay a political price for the rising fuel costs, according to people familiar with the matter. Many of those advisers are eager to end the war, hoping prices will begin to moderate before November’s midterm elections.

The fallout from the U.S.-Israeli attack in late February has slowed traffic through the Strait of Hormuz, a vital shipping lane, triggering a sharp increase in oil, gasoline and jet-fuel prices.

That means consumers are grappling with high costs ahead of the summer travel season, as they consider vacation plans.

Sixty-three per cent of Americans said they put a great deal or a good amount of blame on Trump for the increase in gas prices, according to a new poll conducted by NPR, PBS and Marist.

More than 8 in 10 Americans said struggles at the gas pump are putting strain on their finances.

Jet-fuel prices roughly doubled in a matter of weeks after the war began, and they have remained high. Airlines have said that will add billions of dollars of additional expenses this year, squeezing profit margins.

U.S. airlines spent more than $5 billion on fuel in March—up 30% from a year earlier, according to government data.

Carriers have been raising ticket prices, hoping to pass the cost along to consumers, and they are culling flights that will no longer make money at higher price levels.

In March, the price of a U.S. domestic round-trip economy ticket rose 21% from a year earlier to $570, according to Airlines Reporting Corp., which tracks travel-agency sales.

So far, airlines have said the higher fares haven’t deterred bookings and they are hoping to recoup more of the fuel-cost increases as the year goes on.

Earlier this week, Trump said the current price of oil is “a very small price to pay for getting rid of a nuclear weapon from people that are really mentally deranged.”

Secretary of State Marco Rubio told reporters that if Iran got a nuclear weapon, the country would have more leverage to keep the strait closed and “make our gas prices like $9 a gallon or $8 a gallon.”

Trump has taken steps in recent days to bring the war to an end. Late Tuesday, the president paused a plan to help guide trapped commercial ships out of the Strait of Hormuz, expressing optimism that a deal could be reached with Iran to end the conflict.

Crude oil prices fell below $100 a barrel on Wednesday, after reports that Iran and the U.S. are working with mediators on a one-page framework to restart negotiations aimed at ending the conflict and opening the strait.

Sununu said Trump administration officials are conscious of the economic fallout from the war: “They get it…and I think that’s why they’re trying to get through the war as fast as they can.”

But he cautioned that it could take months for prices to return to prewar levels.

“Ticket prices won’t go down immediately” after the strait is fully reopened, Sununu said. “You’re looking at elevated ticket prices through the summer and fall because it takes a while for the prices to go down.”

Since the initial U.S.-Israeli attack in late February, Sununu has met in Washington with National Economic Council Director Kevin Hassett, representatives from the Transportation Department and senior White House officials.

A White House official confirmed that Hassett and Sununu have discussed the effect of increased fuel prices on the airline industry. The official said the conversation touched on how the industry can mitigate the impact of high jet fuel prices on consumers.

“The president and his entire energy team anticipated these short-term disruptions to the global energy markets from Operation Epic Fury and had a plan prepared to mitigate these disruptions,” White House spokeswoman Taylor Rogers said, pointing to the administration’s decision to waive a century-old shipping law in a bid to lower the cost of moving oil.

Rogers said the administration is working with industry representatives to “address their concerns, explore potential actions, and inform the president’s policy decisions.”

A Treasury Department spokesman pointed to Bessent’s recent comments on Fox News that the U.S. economy remains strong despite price increases. The spokesman said Treasury officials have met with airline executives, who have reaffirmed strong ticket bookings.

“We’re cognizant that this short-term move up in prices is affecting the American people, but I am also confident, on the other side of this, prices will come down very quickly,” Bessent told Fox News on Monday.

The war has already contributed to one casualty in the industry: Spirit Airlines. Company representatives have said they were forced to close the airline because the sustained surge in jet-fuel prices derailed the company’s plan to emerge from chapter 11 bankruptcy.

The Trump administration and Spirit failed to come to an agreement for the company to receive a financial lifeline of as much as $500 million from the federal government.

Transportation Secretary Sean Duffy has argued that the Iran war wasn’t the cause of Spirit’s demise, pointing to the company’s past financial struggles, as well as the Biden administration’s decision to challenge a merger with JetBlue.

Other budget airlines have also turned to the federal government for help since the U.S.-Israeli attack. A group of budget airlines last month sought $2.5 billion in financial assistance to offset higher fuel costs, and they separately wrote to lawmakers asking for relief from certain ticket taxes.

Companies Urged to Take Stock of Their Impact on Nature and Related Risks

A U.N.-funded task force aims to help businesses report and act on a variety of issues, including deforestation and overfarming

Administration officials have spoken to the airline industry, which has voiced concerns about the rising costs.