EU Nature Restoration Law goes into effect, and 3 other major policy updates

As companies start to come to grips with their impacts on nature and biodiversity, with only six years remaining to achieve global targets for biodiversity and with a slew of major events happening (World Water Week, Climate Week, COP 16, and COP 29), the stream of news around the subject is almost overwhelming.

Here’s a summary of major recent policy updates and reports.

EU Nature Restoration law goes into effect

The Regulation on Nature Restoration, which went into effect Aug. 18, aims to protect and restore at least 20 percent of the EU’s land and sea by 2030, with all areas in need of restoration targeted by 2050. It sets binding targets for restoring degraded ecosystems such as wetlands, rivers and forests, focusing on those that can store carbon and provide essential services such as providing clean air and water, pollinating crops and protecting against floods.

As a next step, each member state will develop a national restoration plan outlining specific actions they will take within their territory. The law also requires countries to:

• Halt and reverse the loss of urban green space and canopy cover
• Restore the natural connectivity of rivers and functionality of floodplains
• Halt and reverse pollinator declines
• Restore peatlands under agricultural use
• Make progress on key biodiversity indicators in agricultural and forest ecosystems
• Contribute to the EU-level commitment of planting at least 3 billion additional trees by 2030

My colleague Theresa Lieb recently wrote about the role of corporate advocacy in securing the new law.

Sustainable water goals are off-track

Ninety countries have degraded freshwater ecosystems, including rivers, lakes and aquifers, according to a series of reports released Aug. 27 by UN-Water and the UN Environment Programme.

River flow is decreasing, water bodies are shrinking or disappearing and water quality is deteriorating. The primary drivers are pollution, dams, land conversion, overuse and climate change.

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The reports also project that we will miss the 2030 goal of achieving sustainable water management by 19 years. As a result, 3.3 billion people in over 100 countries will live in areas with ineffective governance frameworks to meet water demands.

In my conversations with members of Trellis Network, it’s clear that nature risk assessments almost always elevate water as a material risk for multinational corporations. A continued rise in water scarcity and reduction in water quality will further exacerbate this risk.

Countries push back on deforestation regulations

China has reportedly rejected the European Union’s Deforestation Regulation, citing security concerns related to its traceability requirements.

The new regulation aims to prevent deforestation linked to seven key commodities in the EU market: cattle, palm oil, soy, coffee, cocoa, timber and rubber. Beginning Dec. 30, affected companies must demonstrate due diligence and monitoring to ensure that products sold to or from the EU do not contribute to deforestation. This includes providing geolocation data showing precisely where the products were sourced.

China isn’t the first country to push back on the regulation. In July, the Biden administration urged the EU to postpone implementation, stating that it could have negative effects on American producers. Other critics include Australia, Brazil, Indonesia and Malaysia.

Companies can anticipate further clarification to the reporting standards, but should prepare to comply with the new regulation in its current state by year-end.

Brazil’s Pact for Ecological Transformation sets the stage for a regenerative economy

The Pact for Ecological Transformation, signed by the presidents (Portuguese) of Brazil’s three branches of government Aug. 21, is a historic agreement to address climate change and biodiversity loss in the world’s most biodiverse country.

The pact details 26 measures across three priority areas: territorial and land planning; energy transition; and sustainable development with social, environmental and climate justice.

For companies doing business in Brazil, key components of the sustainability agenda include:

• Prioritizing a legal framework for regulating the carbon market
• Addressing illegal deforestation and reducing environmental impacts across all sectors
• Major investments in offshore wind and biofuels
• Ensuring an equitable distribution of economic benefits
• Promotion of sustainable cities

Brazil continues to signal its ambitions to lead on global climate and biodiversity issues, setting the stage for COP30 in the Amazonian city of Belém in 2025. If this ambitious pact succeeds, Brazil has the opportunity to model equitable and ecologically compatible development required in the era of climate change.