nature health, Like climate change, it is now recognized as an urgent global risk. In purely economic terms, half of all economic activity is moderately or highly dependent on natural capital—the world’s stock of natural assets. Governments and intergovernmental organizations are drawing increasing attention to the nature crisis, while a growing number of businesses are making biodiversity-related pledges or becoming “nature positive”. Industry-leading organizations such as the Taskforce on Nature-Related Financial Disclosures (TNFD) are setting the framework for how businesses report and act on nature-related risks and opportunities.
Commitments related to nature are less
Companies are in the early stages of committing to a broader set of nature-related goals (Exhibit 1). A high-level review of Fortune Global 500 companies shows that most companies either have climate-related goals (83 percent) or at least accept climate change (an additional 15 percent). In other dimensions of nature, however, the targets and acceptances are much lower (see sidebar, “Our Methodology”).
For example, 51 percent of companies acknowledge biodiversity loss in some way, but only 5 percent have set quantified targets in addition to that recognition. Meanwhile, some dimensions of nature, such as soil nutrient pollution, appear much less frequently in public perceptions. This may not be surprising—while decades of experience have helped companies understand how to address climate change, corporate understanding of nature is still nascent.
There is no standardized approach to measuring natural capital and ecosystem services, and many companies may not know what steps to take simply by accepting the challenge. This possible explanation is echoed by our own experience working with clients worldwide on sustainability issues: while corporate leaders increasingly acknowledge the importance of nature, a limited understanding of how to structurally and responsibly engage with the issue of nature’s degradation prevents many from making quantified commitments.
Considering all dimensions of nature
Another deduction from the same data is that most of the companies with nature-related goals are only considering one dimension of nature – mostly climate (in the context of natural climate solutions). Sixteen percent of the Fortune Global 500 have set goals against three or more dimensions of nature, and none of the companies set goals against the six dimensions we looked at in this analysis (Exhibit 2). One explanation for this could be that as companies focus on what matters most in relation to their activities, expectations are rising: for example, early guidance from the Science-Based Targets for Nature (SBTN) initiative suggests that companies have a “broad understanding”. who [their] Influence and Dependence on Nature”.
Some sectors are ahead of others in targeting
A sector-level breakdown of the data reveals that, as a proportion of the overall sector, transport leads the overall target setting (Exhibit 3). This is likely due to a combination of the region facing climate change risks, regulatory focus on transport sector carbon emissions, and the shift to renewable energy, among other factors. And although the sample is small, agriculture leads the way in setting three or more goals, perhaps more than other sectors, due to increased attention to water and nutrient pollution concerns, in addition to climate.
Looking ahead to this year’s UN Conference on Biodiversity (COP 15), governments will agree new targets for nature to ensure a “shared vision of living in harmony with nature” is met. Now is the time to consider what is needed to encourage widespread and effective nature-based action among companies. Corporate leaders need to understand the size of the challenge ahead, the risks to their operations and the opportunities for business development, what the main goals are, and what their companies can do.