The challenge of setting targets for nature and biodiversity
There has been significant recognition of the role that nature & biodiversity plays in supporting our societies and economies and the unsustainable way in which we currently manage this interrelationship. There have been an increasing number of studies which have identified just how big this problem is, from the World Economic Forum’s recognition that over half of global GDP is moderately or highly dependent on nature (2020), to new research (2023) from S&P Global Sustainable1 which finds that 85% of the world’s largest companies that make up S&P Global 1200 have a significant dependency on nature across their direct operations. Most businesses are just starting to grasp what this means for them. Whilst most companies are well developed in their approach to climate change and carbon/net zero and have set targets, very few have set targets around nature and biodiversity.
One of the greatest challenges lies in the fact that, whilst it is relatively straightforward to understand and quantify a standard unit of carbon which is applicable globally, there is no single unit of measurement for nature and biodiversity. Nature and biodiversity are geographically diverse and locally complex.
Introduction of the Global Biodiversity Framework
In December 2022, COP 15 in Montreal saw the adoption of the Global Biodiversity Framework (GBF) by almost 200 governments, which set ambitious targets for protection and restoration of land and marine biodiversity, as well as driving governments to require organisations to identify and disclose their impacts and dependencies on nature and biodiversity.
As we see this start to unfold, many organisations will see there are significant risks to their business as it is better understood just how reliant they are on the many ecosystem service benefits that nature provides, and that the continued loss of biodiversity, unless reversed, will only increase this risk. Climate change is also one of the five key drivers of biodiversity loss and will further exacerbate the scale of the issue.
At present the focus is firmly on understanding the interface and level of risk, while very little is understood or currently underway to bring about change. On the ground implementation of biodiversity strategies is where the real need is to achieve the goals of the GBF by 2030 as well as manage the current levels of business risk. A wide range of actions will be required, this will involve everything from landscape scale restorative projects globally, to the smallest of changes to business actions across value chains to make the fundamental shift needed.
Setting nature and biodiversity targets
Currently, there is minimal guidance for companies to set targets; translating global goals into fair and proportionate company-specific targets poses a real challenge. These global ambitions need to be translated so that company-specific targets can be identified based on company activity and footprint.
There are an increasing number of reporting and disclosure requirements emerging from regulatory developments such as The Corporate Sustainability Reporting Directive (CSRD), Global Reporting Initiative (GRI) etc., to market driven initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD) which is emerging as the likely main player in this space. Whilst a key element of reporting is around governance risk management and strategy, it will be crucial to demonstrate that the mitigation hierarchy is being followed, that actions are being taken, and that these actions are measurable and being achieved in line with realistic target setting.
There are some current ways to assess the key dimensions of biodiversity – even across complex value chains, such as the STAR (Species Threat Abatement and Restoration) metric, but the release at the end of May 2023 of the Science Based Target Networks nature metric will see a genuine opportunity for organisations to start to set real targets to drive change.
Science Based Target Networks nature metric
This May release will include integrated technical guidance for companies to assess and prioritise their material impacts on the environment and then set targets accordingly. It is anticipated that the initial targets will help companies improve their impacts on freshwater quality and quantity as well as protect and restore terrestrial ecosystems. Further guidance will follow this initial release. It is likely that SBTN will also be the key guidance to support companies as the report against the final version of the TNFD framework in September this year.
A pilot group of companies are planning to use the first release guidance to set the first targets this year. These companies have been identified for their readiness and applicability and represent sectors and supply chains with a high impact on nature. This pilot will be of critical value towards delivery of both the full release of the land targets as well as target validation rollout.
SBTN is inviting all companies to start to assess their environmental impacts using their detailed technical methodologies, and to prepare to set targets which can be validated by SBTN in 2024 once the pilot concludes.
The time for businesses to act on nature and biodiversity targets is now
So, 2023 feels like a pivotal year, much as we saw the uptake of target setting in relation to climate change and net zero pathways a number of years ago, business will rapidly start to understand their impacts and dependencies on Nature and Biodiversity, and to set hard targets to make the difference required both to manage their own risk and also to let stakeholders better understand where they sit. We are already starting to see a fundamental shift in the way the value of nature is being recognised through the investment community and reputationally. Companies must now make their own progress and make the changes needed to align with this shift.