Global companies are paying more attention to nature and natural capital, with increasing numbers making commitments to take action or setting specific targets across a number of dimensions, including water, biodiversity, and chemicals and plastics. Carbon remains the primary focus of commitments, with about four in five companies in the Fortune Global 500 setting carbon-reduction targets, according to our analysis. Corporate action on issues relating to nature and natural capital beyond carbon remains far less pronounced, and action varies considerably by industry and by geographic region. Nonetheless, early signs of momentum suggest that nature is growing in importance on the corporate agenda. Among other indications, our analysis suggests that about one in five companies now track three or more dimensions of nature in their reporting.
These findings emerge from our latest analysis of sustainability reporting by Fortune Global 500 companies—an exercise we first conducted in 2022.1 The growing corporate attention to dimensions beyond carbon comes amid an evolution in thinking on nature and natural capital across society. For example, representatives of governments, nongovernmental organizations (NGOs), and hundreds of companies were present at the 15th Conference of the Parties (COP15) to the United Nations Convention on Biological Diversity in Montreal in December 2022, suggesting heightened interest in the question of what role business can play in contributing to conservation outcomes. Global frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Science Based Targets Network (SBTN) have released recommendations for corporate disclosures and preliminary guidance for corporate target setting, respectively.2 Given this context, corporate movement on nature targets overall, especially commitments to taking action, remains relatively understated.
Defining and measuring nature is not straightforward. Multiple groups have offered definitions and metrics, but so far there is no single accepted metric for measuring nature. We use six dimensions (carbon, water, chemicals and plastics, biodiversity, forest, and nutrients and nitrogen oxides [NOx]) to approximate corporate commitments to nature, roughly aligned to the planetary boundaries, SBTN and TNFD guidance, and our 2022 report Nature in the balance: What companies can do to restore natural capital.3
Corporate commitments to nature are increasing, with a growing focus on dimensions other than carbon
Companies are beginning to increase their commitments to nature, with a slight rise in targets across most dimensions, and a more significant rise in acknowledgments, according to our analysis (Exhibit 1). Specifically, the Fortune Global 500 appear to have a slightly higher number of targets across water, chemical and plastic, forest, biodiversity, and nutrient pollution than last year (see sidebar, “Our methodology”). Companies are significantly increasing their acknowledgments of dimensions other than carbon and water, with the most year-over-year momentum in the forest (such as deforestation), biodiversity, and nutrients and NOx dimensions.
The level of target setting nonetheless remains low for dimensions other than carbon. About 80 percent of companies in the Fortune Global 500 have targets for carbon, but targets for other dimensions are much less common, our analysis shows. Biodiversity and nutrient pollution in particular continue to have very low rates of target setting, with just 6 percent and 5 percent of companies committing to targets, respectively. Nonetheless, the analysis suggests that even these dimensions are seeing a marked increase in company acknowledgments.
We did not assess the quality of targets and acknowledgments, but examples highlight the variability in targets, especially in the biodiversity, forest, and nutrients and NOx dimensions. While some corporate biodiversity targets seek zero loss of biodiversity across all sites and have clear measurement criteria to track progress, our analysis suggests that other targets are less comprehensive or more vague, such as “biodiversity management plans for 25 percent of sites.” A similar range can be found in targets for other dimensions. For forests, for example, targets can range from “zero deforestation in supply chains and 80 percent reduction in paper usage” to “planting 50 million trees.”
Companies with some targets are upping their commitments
Our results suggest that companies that had at least one target in the past year are increasing their commitments across multiple nature dimensions (Exhibit 2). The proportion of companies with three or more targets increased from 16 percent in 2022 to 21 percent in 2023, an increase of almost 30 percent year over year. Corporations are also beginning to expand the breadth of their targets beyond their direct operational footprints to mitigate environmental impact in the broader ecosystems in which they operate.
This momentum does not appear to extend to companies that did not have any targets last year. The results show a five-percentage-point increase in the number of companies with no targets. While this shift was largely caused by changes in the composition of the Fortune Global 500, the aggregate result suggests that companies without environmental targets are not moving in a nature-positive direction.
Manufacturing and transport companies are expanding commitments
A segmentation of the results by sector shows that manufacturing and transport stand out in the share of companies with three or more targets, with percentage-point increases of 11 and nine, respectively (Exhibit 3). Our analysis shows that primary and secondary sectors including agriculture, extractives, and manufacturing have the highest absolute levels of targets, which is perhaps unsurprising given that these companies rely heavily on nature and land to produce value. Tertiary sectors such as retail sales and service have fewer targets and are less directly dependent on the natural environment. The exception to this pattern of higher targets for primary and secondary sectors is construction and buildings, where overall target setting is low, and where our analysis suggests there is less target setting across three or more dimensions.
There are wide regional variations in the number of dimensions that companies target
Along with the variance across sectors, our analysis highlights that target setting varies widely by region. More than one-third of European companies in the Fortune Global 500 have targets for three or more dimensions, and more than half target at least two. Europe’s momentum comes in the context of new nature-related regulations this year, including the Corporate Sustainability Reporting Directive (coming into effect January 2023), the EU deforestation regulation (June 2023), and the proposed EU Nature Restoration Law. In North America, one in four Fortune Global 500 companies has targets for three or more dimensions, while in Asia only 11 percent do (Exhibit 4).
In the year since COP15, both the need and the guidance for corporate action on nature have become increasingly clear. In addition to developing a holistic nature strategy with targets and disclosure, companies can start implementing nature-positive action today. Our Nature in the balance report details the sector-level levers that corporations can implement, including about $700 billion in opportunities that would have a positive return on investment today.4 Corporate action has the potential to help reverse the trend of the depletion of natural capital, and corporate leaders can act today to catalyze the shift toward a nature-positive future.