Organizational Governance Regulation & Public Policy

Assessing the Role of SBTN During Turbulent Times

If executed properly, nature targets reveal a far more comprehensive view of a company’s environmental impacts and dependencies — and can reveal new opportunities.

Brand Provided | By Dr. Matthew Gardner | Published 1 month ago | About a 4 minute read

Image: Freepik

ESG investing and corporate sustainability regulations in the US and abroad face upheaval in today’s political and economic climate. The new US administration has re-withdrawn from the Paris Agreement, committed to ramping up oil and gas production, and made cuts to the EPA, just to name a few. In the EU, proposed rollbacks to the Corporate Sustainability Reporting Directive (CSRD) could mean less disclosure and ultimately less accountability for companies with regards to their sustainability performance.

These shifts in major markets are a significant step backwards for protecting our planet amidst a clearly worsening climate crisis. Despite a potentially weaker regulatory framework, climate progress is still possible — and businesses have a key role to play. With rollbacks to mandatory climate regulations, voluntary regulations such as Science-Based Targets for Nature (SBTN) could play a bigger role in companies’ meeting key sustainability goals. Not to mention, for many companies, it is in their best interest to not back down from these commitments given their reliance on a healthy and productive ecosystem.

How will shifting political winds impact science- and nature-based efforts?

Companies aiming to set and achieve SBTN, in particular, will have to navigate burgeoning political challenges. Launched in 2022, SBTN draws on the work and success of the Science Based Targets initiative (SBTi), which has supported companies in setting goals to cut their carbon emissions since 2014. SBTN offers the next step in the evolution of environmental science–based target setting. It encompasses not only emissions targets but four other focus areas: Biodiversity, Freshwater, Land and Oceans.

Due to their dependencies and impacts on nature, businesses have a key role to play in the conservation and restoration of all four focus areas — which makes SBTN all the more relevant and critical for business success and longevity.

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Although sustainability initiatives such as SBTN aren’t immune to political shifts, there’s value in companies sticking with it. So, how can companies anticipate and adapt to this rapidly changing landscape, ensure compliance, and maintain progress toward their SBTN targets?

How businesses can stay on track with their SBTN efforts

For starters, clearly assessing and articulating the business case for the protection of the natural world can help companies demonstrate long-term value creation and maintain momentum. Companies that rely upon natural capital and ecosystem services need to deeply — and ideally, quantitatively — understand the risks and opportunities they face and then take steps to mitigate the risks and leverage the opportunities.

Businesses can then align their SBTN targets with genuine shareholder interests and demonstrate how their nature-based strategies reduce operational costs, enhance efficiency, and create revenue opportunities. Likewise, organizations can show how their nature-positive actions can help mitigate risks related to supply chains, natural disasters and regulatory changes as well as showcase innovation.

Moreover, they then should discuss this in clear, concise reporting on their sustainability efforts in order to build trust with customers and investors and demonstrate a solid commitment to their environmental goals. Forward-thinking companies already know SBTN is a viable and credible source of third-party validation that offers a streamlined process for setting nature-based targets that concurrently spur progress across a variety of sustainability goals.

For instance, UK-based biotech and life sciences company GSK communicated its goals to stakeholders to eliminate freshwater net withdrawal in its direct operations by 2030, compared to its 2018-2022 baseline. And Swiss sustainable construction company Holcim reported its plans for 75 percent of its sites to be water-positive by 2030, compared to its 2022-2023 baseline. In both cases, these goals are reflective of the companies’ recognition of their impact on these natural resources and the business value of protecting these resources.

A competitive advantage

Companies dedicated to SBTN strategies can follow these examples in their reporting and link their climate initiatives to broader, non-partisan issues such as job creation and economic growth. Highlighting commitments to nature-based solutions along with the many ways that these organizations are meeting sustainability expectations can serve as a bold competitive differentiator, helping companies attract and retain environmentally conscious customers and investors.

The very essence of SBTN is that it reveals a far more comprehensive and multidimensional view of an organization’s impacts and dependencies on the environment. If executed properly, these targets can revolutionize how a company views its role in the world and reveal new opportunities.

At the end of the day, companies and investors must recognize that administrations and political winds will always shift, but global climate progress is necessary for the long term. By staying the course, companies can maintain progress on nature-based targets while mitigating risks associated with unpredictable political environments and regulatory regimes. By incorporating their interrelations with nature into their decision making and disclosures, companies will ultimately reveal themselves as genuine stewards of the environment and climate.