Nature’s health, like climate change, is now recognized as an urgent global risk.1 In purely economic terms, half of all economic activity is moderately or highly dependent on natural capital—the world’s stock of natural assets.2 Governments and intergovernmental organizations are increasingly calling attention to the nature crisis,3 while a growing number of businesses are making pledges related to biodiversity or becoming “nature positive.”4 Industry-led 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.5
Nature-related commitments remain low
Companies are in the early stages of committing to a broad set of nature-related goals (Exhibit 1). A high-level review of the Fortune Global 500 companies shows that most companies have climate-related targets (83 percent) or at least acknowledge climate change (an additional 15 percent).6 Across other dimensions of nature, however, targets and acknowledgements are far lower (see sidebar, “Our methodology”).
For instance, although 51 percent of companies acknowledge biodiversity loss in some way, only 5 percent have set quantified targets in addition to that acknowledgment. Meanwhile, some dimensions of nature, such as soil nutrient pollution, show up much less frequently in public acknowledgements. 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,7 and many companies may not know what steps to take beyond simply acknowledging the challenge. This potential explanation is echoed by our own experience working with clients globally on sustainability topics: while corporate leaders increasingly acknowledge the importance of nature, limited understanding of how to structurally and responsibly engage on the topic of nature degradation prevents many from making quantified commitments.
Considering all dimensions of nature
Among companies that have nature-related targets, most are only considering one dimension of nature—most often climate.
Another cut of the same data highlights the fact that, among companies that have nature-related targets, most are only considering one dimension of nature—most often climate (in a context of natural climate solutions). Sixteen percent of the Fortune Global 500 have set targets against three or more dimensions of nature, and no companies have targets against the six dimensions we looked at in this analysis (Exhibit 2). While one explanation for this could be that companies focus on what matters most in relation to their activities, expectations are rising: for example, the initial guidance of the Science-Based Targets for Nature (SBTN) initiative suggests that companies have “a comprehensive understanding of [their] impacts and dependencies on nature.”8
Some sectors are ahead of others in setting targets
A sector-level cut of the data reveals that, as a proportion of the overall sector, transportation leads on overall target setting (Exhibit 3). This is likely due to a combination of the sector facing climate transition risks, regulatory focus on transportation sector carbon emissions,9 and a shift to renewable energy, among other factors. And although the sample is small, agriculture leads on setting three or more targets, likely due to increased attention to water and nutrient pollution concerns, in addition to climate, compared with other sectors.
Looking ahead to this year’s UN Biodiversity Conference (COP 15), governments will agree to a new set of goals for nature to ensure that “the shared vision of living in harmony with nature is fulfilled.”10 Now is the time to consider what will be needed to spur broad and effective nature-based action among companies. Corporate leaders will need to understand the shape of the challenge ahead, risks to their operations and opportunities for business building, what the key targets are, and what actions their companies can take.