The health of nature, like climate change, it is now recognized as an urgent global risk.
In purely economic terms, half of all economic activity depends moderately or heavily on natural capital, the world stock of natural resources.
Governments and intergovernmental organizations are increasingly drawing attention to the crisis of nature,
while an increasing number of companies make commitments related to biodiversity or become “positive for nature”.
Industry-led organizations, such as the Taskforce on Nature-related Financial Disclosures (TNFD), are setting the framework for how companies report and act on nature-related risks and opportunities.
Commitments related to nature remain low
Companies are in the early stages of committing to a wide range of nature-related goals (Annex 1). A high-level review of the Fortune Global 500 companies shows that most companies have climate-related goals (83%) or at least recognize climate change (an additional 15%).
In other dimensions of nature, however, goals and rewards are much lower (see sidebar, “Our Methodology”).
For example, although 51% of companies somehow recognize biodiversity loss, only 5% have set quantified targets in addition to that recognition. Meanwhile, some dimensions of nature, such as nutrient pollution of the soil, appear much less frequently in public awards. This may come as no surprise: While decades of experience have helped companies understand how to tackle climate change, companies’ understanding of nature is still in its infancy.
There is no standardized approach to measuring natural capital and ecosystem services,
and many companies may not know what steps to take beyond simply acknowledging the challenge. This potential explanation is echoed in our experience of working with clients globally on sustainability issues: as business leaders increasingly recognize the importance of nature, the limited understanding of how to engage structurally and responsibly on the issue of nature degradation prevents many to make quantified commitments.
Considering all the dimensions of nature
Among the companies that have goals related to nature, most consider only one dimension of nature, most of the time the climate.
Another cut of the same data highlights the fact that, among companies that have nature-related goals, most consider only one dimension of nature, most often the climate (in a context of natural climate solutions). 16% of the Fortune Global 500 have set goals against three or more dimensions of nature, and no company has goals against the six dimensions we looked at in this analysis (Figure 2). While one explanation for this might be that companies focus on what matters most in relation to their businesses, expectations are rising – for example, initial guidance from the Science-Based Targets for Nature (SBTN) initiative suggests that companies have “a comprehensive understanding of [their] impacts and dependencies on nature “.
Some sectors are ahead of others in goal setting
A cut of the data at the sector level reveals that, in proportion to the overall sector, transport drives the definition of general objectives (Figure 3). This is likely due to a combination of the sector facing the risks of climate transition, the regulatory focus on carbon emissions from the transport sector,
and the shift to renewable energy, among other factors. And although the sample is small, agriculture leads to three or more targets being set, probably due to a greater focus on water and nutrient pollution, as well as climate, than other sectors.
Ahead of this year’s United Nations Conference on Biodiversity (COP 15), governments will agree on a new set of goals for nature to ensure that “the shared vision of living in harmony with nature is fulfilled.”
Now is the time to consider what will be needed to stimulate broad and effective nature-based action between companies. Business leaders will need to understand the shape of the challenge that awaits them, the risks to their operations and business development opportunities, what the key objectives are, and what actions their companies can take.