In May 2023, 17
companies
— AB InBev, Alpro (part of Danone), Bel, Carrefour,
Corbion, GSK, H&M Group, Hindustan Zinc Limited, Holcim
Group, Kering and L’Occitane Group (which in 2022 joined forces to
launch a Climate Fund for
Nature),
LVMH, Nestlé, Neste Corporation, Suntory Holdings Limited,
Tesco and UPM — representing various sectors and supply chains
significantly impacting nature, embarked upon a unique journey: piloting the
first-ever science-based targets for
nature.

Central to the pilot is determining the optimal balance between rigor and
feasibility, ahead of opening the target validation process up more broadly to
companies later this year. The pilot companies have contributed a wealth of
data, totaling over 20,000 data points.

In the final stages of this pilot — which concludes in May 2024 and will yield
the first validated targets — the Science-Based Target
Network (SBTN) has highlighted
initial
insights
gathered during the pilot through a combination of workshops, interviews and
anonymized surveys.

Alongside this official pilot, there are approximately 160 companies preparing
to set science-based targets for nature in some form; including 125 from SBTN’s
Corporate Engagement
Program,
plus companies working through partners including SBTN’s referral
program.

Below are five insights from pilot companies about lessons learned from
operationalizing science-based targets for nature.

Insight #1: Opportunities beyond risk management

Pilot companies value science-based targets for nature as a risk-management tool
to increase resilience, but also see opportunities beyond this.

As articulated by one pilot company:

“These methods provide value in the form of risk mitigation — identifying
risk along the supply chain — as well as improved reputation and competitive
advantage.”

The pilot companies are recognizing that the targets can be a catalyst for
change:

“This approach is a first step towards a standardization of how nature is
integrated into companies’ strategies. It’s an enormous step forward.”

GSK highlighted the “immense value of the framework” deepening the company’s
understanding of its impacts and dependencies on nature, and helping it to
refine and prioritize the action it is taking to meet its existing nature
targets.

Pilot companies also appreciate the interoperability of SBTN with other related
sustainability
initiatives.
As Bel advised:

“By doing SBTN, you are paving the way for other frameworks — at least from
a data perspective, the process is extremely rigorous and science-based.
Climate and nature are deeply interrelated; SBTN gives us a clear pathway to
create a resilient food model.”

Alpro emphasized SBTN’s alignment with the Taskforce on Nature-related
Financial Disclosures (TNFD) — whose
recommendations over 300 companies recently
committed
to adopt and begin publishing TNFD-aligned disclosures as part of their annual
corporate reporting — and its establishment as a standard for action on nature:

“This is striking a chord with leadership, and we are seeing the business
value of setting targets in this pilot.”

Insight #2: Validating and raising ambition

Kering highlighted the pilot’s impact on its ambition to have a net-positive impact on biodiversity by 2025:

“If you’re not talking about systemic transformation or collaborative
transformation, it’s very hard for you to raise your own ambition as well.
We think there’s so much promise and huge value [in these methods].”

The methods are encouraging companies to expand their scope of measuring their
environmental impacts from solely direct operations to include upstream. Holcim
says it is establishing the first-of-its-kind targets for upstream activities.

GSK noted a significant transformation driven by the process of setting
science-based targets for nature, which is engaging with suppliers to increase
traceability and data transparency on where and how materials are sourced —
which are “often well beyond the suppliers we procure directly from.”

Another pilot company reported the methods are not only helping it increase its
sustainability ambitions but also validate current ones; and the newfound
understanding of the organization’s impacts and dependencies on nature is
helping change mindsets internally regarding the urgency of meaningful action.

Companies are also evaluating a wider range of environmental impacts:

“Piloting science-based targets for nature has helped us identify areas
where we can strengthen our existing climate-focused initiatives, such as
our forest-positive and regenerative-agriculture
programs,
to better respond to nature-related risks and opportunities across our value
chain.” — Conor
McMahon, Global Net Zero and Nature Lead at Nestlé

This integrated assessment of nature impacts alongside climate has led some
companies to identify raw materials that, despite minimal GHG emissions, exert
significant impacts on nature.

Insight #3: Measurable benefits

The process of assessing and prioritizing value chain impacts on nature (Steps
1 & 2 of the
methods)
requires companies to increase their upstream traceability and work more closely
with suppliers to understand their impacts. The process has led companies to
uncover hidden risks within their supply chains — prompting them to prioritize
action in locations where it really matters.

For example, while the first freshwater-quality
targets
focus on nutrient pollution, the target-setting process requires a comprehensive
assessment of collecting water-pollution data. During this process, one company
discovered an issue with the use of herbicides within a specific basin that
adversely impact water quality. As the scope of freshwater-quality targets
expand in the future, the company will be able to set a science-based target to
address this issue. In the meantime, it is collaborating with suppliers to
mitigate this negative impact.

In addition to risk mitigation, several companies have also experienced a
cascading effect in engagement and collaboration — both internally and
throughout the supply chain. This has included capacity-building initiatives
with suppliers to gather more granular data.

Furthermore, setting science-based targets for nature has generated tangible
quantitative business
outcomes
for some. For instance, Hindustan Zinc is strategically planning to achieve cost
savings through enhanced water use efficiency; and another pilot company advised
that having credible nature targets is leading to easier access to credit and
financing.

Insight #4: Balancing rigor and feasibility

Governments
are increasingly pushing for ambitious upstream value-chain assessments,
including of high-impact
commodities.
SBTN’s methods align with the direction all companies need to pursue to halt and
reverse nature loss and remain aligned with the increasing scrutiny and
standards.

But governments aren’t the only stakeholders increasingly looking to hold
companies accountable. As observed by Holcim: “Investors are asking for this.
The extended stakeholders are waiting for it.”

SBTN aims to find the balance between what is currently feasible for companies
and what will elevate the level of ambition of action for nature — an ongoing
challenge that requires continual optimization.

One illustration of this challenge highlighted by the pilot lies in the
necessary place-based emphasis of science-based targets for nature, and
therefore the need for upstream traceability. Companies face obvious challenges
to get full visibility, with data collection and data quality presenting notable
hurdles.

As the landscape for data and tools to address nature
loss
is less mature than that for climate, SBTN is collaborating with developers to
identify relevant tools and data, and creating additional guidance to help
companies build traceability in their supply chains.

The tension between scientific rigor and practical application extends to
sector-specific considerations. SBTN’s value-chain-assessment methodologies are
designed to be cross-sector to allow for broad corporate engagement; but some
companies have expressed a need for methods to be more flexible and tailored to
their particular industry realities.

To further facilitate implementation, SBTN is looking to enhance existing
methods through sector-specific on-ramps and validation guidance at critical
parts of the methodologies.

Insight #5: People at the core: Skills, expertise and collaboration

As pilot companies have pointed out, successful implementation hinges not just
in the methodologies but in the people who bring them to life (see image below).
Skills such as expertise in lifecycle assessment and footprinting, proficiency
in spatial analysis, and deep understanding of environmental data are crucial.
These can be built within a company or alongside the assistance of a
consultant.

Image credit: SBTN

But just as important as technical know-how is the internal buy-in and support
required to ensure the successful collection of data — for example, effective
coordination with procurement departments on upstream data. This is particularly
true for large companies sitting downstream of the value chain.

In recognition of this, SBTN is preparing additional
resources to support
companies through the onboarding journey — including its forthcoming Corporate
Manual, designed as a practical introductory guide to SBTN’s methods; as well as
a self-assessment tool to support companies in their preparations to begin the
process.

What’s next

Pilot companies are set to submit their targets for validation by March 1, 2024.
SBTN anticipates the first validated targets by May/June, to be accompanied by a
detailed report outlining key learnings and insights from the pilot.

In preparation for a broader roll-out of the target-validation process, a
priority is establishing a robust validation model — which is being developed in
collaboration with ISEAL — and SBTN will
continue its collaborative efforts to further align with other related
sustainability frameworks, including TNFD.

By 2025, companies can expect additional coverage of science-based targets for
nature — including the first ocean targets and expanded targets on freshwater
pollution and land — with further biodiversity metrics, indicators and
safeguards integrated.