Science Based Targets Network Releases First Corporate Science-Based Targets for Nature

An initial group of seventeen (17) companies³ will pilot the new framework and submit data regarding their impacts on nature by the end of the year. This pilot will aid the SBTN’s target validation process, alongside an initial version of land targets, both of which are anticipated to be available in early 2024.

The Science-Based Targets

SBTN’s first release of its science-based targets cover both freshwater and land, which also includes partial biodiversity coverage. Ocean targets will be available next year.

To set science-based targets for nature, companies are to follow the five steps of the framework. Detailed guidance on Steps 1 through 3 are available as part of the SBTN’s initial release.

1. Assess: A determination of the environmental impacts a company needs to address and where it should start first. This involves:
   • A materiality screening: which pressures most likely require target-setting; and
   • A value chain assessment: an estimation of a company’s contributions to those pressures across its operations and value chain alongside an estimation of the state of nature in locations where it operates or sources from.

2. Interpret & Prioritize: A determination of which of the environmental impacts identified in step one need science-based targets, which locations and economic activities to include within such target boundaries, and where to act first. This involves:
   • Determination of target boundaries: where companies must set science-based targets (to include implementation and monitoring);
   • Interpreting and rank: within a target boundary, the ranking of locations to reflect company pressures and nature and biodiversity needs;
   • Prioritization: the cut off for location rankings to determine initial target setting; and
   • Evaluation of feasibility and strategic interest: adding societal and human rights consideration alongside feasibility and financial materiality.

3. Measure, Set & Disclose: The setting, measurement, validation and disclosure of science-based targets for those environmental impacts identified by steps one and two. As noted above, the SBTN’s initial framework covers freshwater and land. Freshwater science-based targets focus on water use (specifically, surface water and groundwater withdrawals) and pollution (specifically, from nitrogen and phosphorus). Land science-based targets are still in the beta stage of development and will be piloted by the initial group of seventeen companies setting targets. Such targets are designed to “halt[] conversion of natural ecosystems, free[] up agricultural land for natural ecosystem restoration and improve[] the ecological integrity of landscapes, including working lands, to enhance ecosystem structure, composition and function.”⁴

The SBTN aims to publish a more detailed analysis of mitigating biodiversity loss via the science-based targets later this year, which will also outline plans for future releases of the framework. However, the SBTN notes that this first release addresses some of the dominant drivers of biodiversity loss and, therefore, directly supports actions taken toward the protection, restoration and sustainable use of our natural ecosystems.⁵

A company that voluntarily discloses to the SBTN would be required to submit their targets to the SBTN for validation — a process that is currently being piloted with the initial group of seventeen companies. Following target-setting, a company could then disclose such targets to its stakeholders, demonstrating how it is working toward, and mitigating, its impacts and dependencies on nature. The science-based targets are designed to meet the requirements of disclosure frameworks, the Global Reporting Initiative (GRI), the Task Force for Climate-related Financial Disclosures (TCFD), and the forthcoming Task force for Nature-related Financial Disclosures (TNFD).

4. Act: A company is directed to follow the SBTN’s Action Framework (“AR3T”⁶) introduced in the Initial Guidance for Business (2020). This framework covers the actions a company can take to reduce current impacts and avoid future impacts, to include the regeneration and restoration of ecosystems. The AR3T Action Framework is built upon the International Financial Corporation’s Performance Standard 6 mitigation hierarchy which aims to address biodiversity impacts at the project level. However, the AR3T Action Framework goes one step further, expanding the concept beyond conservation to include taking positive steps for nature. At its heart, the AR3T Action Framework aims to transform the underlying systems relied on by companies to address drivers of nature loss.
5. Track: The SBTN is currently developing detailed measurement, reporting and verification (“MRV”) guidance for companies in the process of acting on science-based targets, but notes that MRV-activities are inherent in steps one through three (e.g., the measurement of impacts on nature in step one, prioritization of locations in step two, and the collection of baseline data and disclosure in step three) and that guidance to that effect is available as part of this initial release.

How do the SBTN’s Science-Based Targets “Fit” into the Broader Reporting Ecosystem?

The bar on corporate reporting on environmental impacts continues to rise, with several voluntary target-setting frameworks and disclosure frameworks available for companies to use in order to meet both current and proposed regulatory frameworks (internationally and domestically). This rising bar inevitably leads to increased reporting burdens. However, the SBTN explicitly notes that it has closely collaborated with its partners, including the TNFD, to align its science-based targets framework as much as possible with existing standards. It is likely, therefore, that companies will be able to leverage the framework to aid its compliance with current and emerging disclosure regulations and to provide meaningful information to stakeholders, not just with respect to biodiversity but also to climate.

Takeaways

In preparation for potentially embarking on SBTN disclosure, companies can undertake a number of actions now, even if not ready to set science-based targets. Such actions include remaining informed of the continued development of SBTN’s framework, such as tracking the progress of the seventeen companies taking part in the pilot release. Companies can also begin to explore their own environmental impacts on nature (step one of the framework) and assess these pressures on their operations and value chain. Companies should also stay informed as to the final release of the TNFD’s disclosure framework (due in September 2023) and evaluate the ways this will intersect with the SBTN.

Although it may feel like the SBTN is just another acronym to add to the alphabet soup of ESG reporting, stakeholders’ focus and engagement on nature and biodiversity risks will continue to pick up pace. The SBTN’s science-based targets for nature are designed to help companies evaluate and transparently report assessment of their impacts and risks on natural ecosystems and progress as to their mitigation of the same. Companies are advised to remain ahead of the curve here and actively monitor these develop

¹ Defined by the SBTN as “measurable, actionable, and time-bound objectives, based on the best available science, that allow actors to align with Earth’s limits and societal sustainability goals.” See Frequently Asked Questions, Science Based Targets Network (last accessed May 25, 2023).

² Defined by the SBTN as “all non-human living entities and their interaction with other living or non-living physical entities and processes. This definition recognizes that interactions bind humans to nature, and its subcomponents (e.g., species, soil, rivers, nutrients), to one another. This definition also recognizes that air pollution, climate regulation, and carbon are part of “nature” more broadly—therefore, when we talk about acting for nature, we are talking about acting on issues related to climate change as well.” (internal citations omitted). See SBTN Glossary of Terms, Science Based Targets Network (last accessed May 25, 2023).

³ These are: AB InBev, Alpro, Bel, Carrefour, Corbion, GSK, H&M Group, Hindustan Zinc Limited, Holcim Group, Kering, L’Occitane Group, LVMH, Nestlé, Nestlé Corporation, Suntory Holdings Limited, Tesco, and UPM.

⁴ See Set Targets, Science Based Targets Network (last accessed May 25, 2023).

⁵ To that end, the SBTN has released a short Biodiversity Paper which summarizes the coverage of biodiversity within the initial release and provides an overview of the next steps for its biodiversity methodology.

⁶ Named by the SBTN as it covers actions to “Avoid future impacts, Reduce current impacts, Regenerate and Restore ecosystems, and Transform the systems in which companies are embedded.” See SBTN Glossary of Terms, Science Based Targets Network (last accessed May 25, 2023).