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Early Adopters Share Insights from Piloting Science-Based Targets for Nature

Pilot companies say the newfound understanding of their impacts and dependencies on nature is helping change mindsets internally regarding the urgency of meaningful action.

Published 10 months ago | About a 8 minute read

Image: Tom Fisk

In May 2023, 17 companies — AB InBev, Alpro (part of Danone), Bel, Carrefour, Corbion, GSK, H&M Group, Hindustan Zinc Limited, Holcim Group, Kering and L’Occitane Group (which in 2022 joined forces to launch a Climate Fund for Nature), LVMH, Nestlé, Neste Corporation, Suntory Holdings Limited, Tesco and UPM — representing various sectors and supply chains significantly impacting nature, embarked upon a unique journey: piloting the first-ever science-based targets for nature.

Central to the pilot is determining the optimal balance between rigor and feasibility, ahead of opening the target validation process up more broadly to companies later this year. The pilot companies have contributed a wealth of data, totaling over 20,000 data points.

In the final stages of this pilot — which concludes in May 2024 and will yield the first validated targets — the Science-Based Target Network (SBTN) has highlighted initial insights gathered during the pilot through a combination of workshops, interviews and anonymized surveys.

Alongside this official pilot, there are approximately 160 companies preparing to set science-based targets for nature in some form; including 125 from SBTN’s Corporate Engagement Program, plus companies working through partners including SBTN’s referral program.

Below are five insights from pilot companies about lessons learned from operationalizing science-based targets for nature.

Insight #1: Opportunities beyond risk management

Pilot companies value science-based targets for nature as a risk-management tool to increase resilience, but also see opportunities beyond this.

As articulated by one pilot company:

“These methods provide value in the form of risk mitigation — identifying risk along the supply chain — as well as improved reputation and competitive advantage.”

The pilot companies are recognizing that the targets can be a catalyst for change:

“This approach is a first step towards a standardization of how nature is integrated into companies’ strategies. It’s an enormous step forward.”

GSK highlighted the “immense value of the framework” deepening the company’s understanding of its impacts and dependencies on nature, and helping it to refine and prioritize the action it is taking to meet its existing nature targets.

Pilot companies also appreciate the interoperability of SBTN with other related sustainability initiatives. As Bel advised:

“By doing SBTN, you are paving the way for other frameworks — at least from a data perspective, the process is extremely rigorous and science-based. Climate and nature are deeply interrelated; SBTN gives us a clear pathway to create a resilient food model.”

Alpro emphasized SBTN’s alignment with the Taskforce on Nature-related Financial Disclosures (TNFD) — whose recommendations over 300 companies recently committed to adopt and begin publishing TNFD-aligned disclosures as part of their annual corporate reporting — and its establishment as a standard for action on nature:

“This is striking a chord with leadership, and we are seeing the business value of setting targets in this pilot.”

Insight #2: Validating and raising ambition

Kering highlighted the pilot’s impact on its ambition to have a net-positive impact on biodiversity by 2025:

“If you’re not talking about systemic transformation or collaborative transformation, it’s very hard for you to raise your own ambition as well. We think there’s so much promise and huge value [in these methods].”

The methods are encouraging companies to expand their scope of measuring their environmental impacts from solely direct operations to include upstream. Holcim says it is establishing the first-of-its-kind targets for upstream activities.

GSK noted a significant transformation driven by the process of setting science-based targets for nature, which is engaging with suppliers to increase traceability and data transparency on where and how materials are sourced — which are “often well beyond the suppliers we procure directly from.”

Another pilot company reported the methods are not only helping it increase its sustainability ambitions but also validate current ones; and the newfound understanding of the organization’s impacts and dependencies on nature is helping change mindsets internally regarding the urgency of meaningful action.

Companies are also evaluating a wider range of environmental impacts:

“Piloting science-based targets for nature has helped us identify areas where we can strengthen our existing climate-focused initiatives, such as our forest-positive and regenerative-agriculture programs, to better respond to nature-related risks and opportunities across our value chain.” — Conor McMahon, Global Net Zero and Nature Lead at Nestlé

This integrated assessment of nature impacts alongside climate has led some companies to identify raw materials that, despite minimal GHG emissions, exert significant impacts on nature.

Insight #3: Measurable benefits

The process of assessing and prioritizing value chain impacts on nature (Steps 1 & 2 of the methods) requires companies to increase their upstream traceability and work more closely with suppliers to understand their impacts. The process has led companies to uncover hidden risks within their supply chains — prompting them to prioritize action in locations where it really matters.

For example, while the first freshwater-quality targets focus on nutrient pollution, the target-setting process requires a comprehensive assessment of collecting water-pollution data. During this process, one company discovered an issue with the use of herbicides within a specific basin that adversely impact water quality. As the scope of freshwater-quality targets expand in the future, the company will be able to set a science-based target to address this issue. In the meantime, it is collaborating with suppliers to mitigate this negative impact.

In addition to risk mitigation, several companies have also experienced a cascading effect in engagement and collaboration — both internally and throughout the supply chain. This has included capacity-building initiatives with suppliers to gather more granular data.

Furthermore, setting science-based targets for nature has generated tangible quantitative business outcomes for some. For instance, Hindustan Zinc is strategically planning to achieve cost savings through enhanced water use efficiency; and another pilot company advised that having credible nature targets is leading to easier access to credit and financing.

Insight #4: Balancing rigor and feasibility

Governments are increasingly pushing for ambitious upstream value-chain assessments, including of high-impact commodities. SBTN’s methods align with the direction all companies need to pursue to halt and reverse nature loss and remain aligned with the increasing scrutiny and standards.

But governments aren’t the only stakeholders increasingly looking to hold companies accountable. As observed by Holcim: “Investors are asking for this. The extended stakeholders are waiting for it.”

SBTN aims to find the balance between what is currently feasible for companies and what will elevate the level of ambition of action for nature — an ongoing challenge that requires continual optimization.

One illustration of this challenge highlighted by the pilot lies in the necessary place-based emphasis of science-based targets for nature, and therefore the need for upstream traceability. Companies face obvious challenges to get full visibility, with data collection and data quality presenting notable hurdles.

As the landscape for data and tools to address nature loss is less mature than that for climate, SBTN is collaborating with developers to identify relevant tools and data, and creating additional guidance to help companies build traceability in their supply chains.

The tension between scientific rigor and practical application extends to sector-specific considerations. SBTN’s value-chain-assessment methodologies are designed to be cross-sector to allow for broad corporate engagement; but some companies have expressed a need for methods to be more flexible and tailored to their particular industry realities.

To further facilitate implementation, SBTN is looking to enhance existing methods through sector-specific on-ramps and validation guidance at critical parts of the methodologies.

Insight #5: People at the core: Skills, expertise and collaboration

As pilot companies have pointed out, successful implementation hinges not just in the methodologies but in the people who bring them to life (see image below). Skills such as expertise in lifecycle assessment and footprinting, proficiency in spatial analysis, and deep understanding of environmental data are crucial. These can be built within a company or alongside the assistance of a consultant.

Image credit: SBTN

But just as important as technical know-how is the internal buy-in and support required to ensure the successful collection of data — for example, effective coordination with procurement departments on upstream data. This is particularly true for large companies sitting downstream of the value chain.

In recognition of this, SBTN is preparing additional resources to support companies through the onboarding journey — including its forthcoming Corporate Manual, designed as a practical introductory guide to SBTN’s methods; as well as a self-assessment tool to support companies in their preparations to begin the process.

What’s next

Pilot companies are set to submit their targets for validation by March 1, 2024. SBTN anticipates the first validated targets by May/June, to be accompanied by a detailed report outlining key learnings and insights from the pilot.

In preparation for a broader roll-out of the target-validation process, a priority is establishing a robust validation model — which is being developed in collaboration with ISEAL — and SBTN will continue its collaborative efforts to further align with other related sustainability frameworks, including TNFD.

By 2025, companies can expect additional coverage of science-based targets for nature — including the first ocean targets and expanded targets on freshwater pollution and land — with further biodiversity metrics, indicators and safeguards integrated.