Nature Positive Corporate Assessment Guide for Financial Institutions 2025

Numerous companies across various sectors, particularly large ones, have well- articulated nature ambitions.Existing frameworks that companies may be using: –TNFD: Draft guidance on nature transition plans includes a component on nature ambitions in the nature transition plan disclosure section.45 –Nature Strategy Handbook: Building on the ACT-D (assess, commit, transform and disclose) framework, the Nature Strategy Handbook provides guiding questions, recommendations and resources on how to develop a nature ambition.46 –Accountability Framework Core Principles: This provides a high-level framework for setting supply chain goals, taking action and assessing progress in efforts to make supply chains in agriculture and forestry more ethical.47 –Capitals Coalition’s Beta Framework for Integrated Decision-making: This outlines seven required steps to integrating the value of capital (natural, social, human, produced) into decision-making.48 –Nature benchmarking initiatives state expectations around the nature ambitions of companies such as Nature Action 100.49 How financial institutions are getting started: Numerous companies across various sectors, particularly large ones, have well-articulated nature ambitions. Companies like Ørsted, GSK and Holcim are good examples, having expressed their aim to contribute to the nature-positive movement and the goals of the GBF. While science-based or science-backed nature target setting through SBTN and similar pilots is still under development, overarching nature ambitions – for instance, those that pledge achieving the nature-positive goal by 2050 – are more common but vary widely. They continue to help financial institutions understand company commitments to nature and the relative maturity of those commitments. 2.4 Indicator 4: Nature targets A company’s nature targets are a more detailed and quantified specification of a company’s ambition within a clear timeframe. Ideally, target statements include interim targets that indicate short- and medium-term milestones and the pathway to long-term targets. Targets can be set in line with a mitigation hierarchy (such as AR3T, which stands for avoid, reduce, restore and regenerate and transform) at site and project levels to ensure companies prioritize actions that mitigate nature impacts in the first instance where possible. An initiative by SBTN provides a framework and guidance for setting science-based targets for nature, helping companies align their environmental goals with scientific evidence. Aligning targets with scientific evidence is not yet mainstream given inherent methodological challenges – however, it has various advantages, such as increased investor confidence and resilience.50 Financial institutions seek the following information from companies when assessing this indicator: –If the targets are science-based and developed in line with available guidance such as SBTN or validated by SBTN –If the targets are specific, measurable, achievable, relevant and time-bound (SMART) and location- or ecosystem-specific –If the targets encompass all material impacts (such as in the case where a company’s water extraction is having a material impact on an ecosystem) and dependencies – this informs whether financial institutions might expect to have a water withdrawal and consumption (m3) target in place for that location –If the targets are developed in line with a mitigation hierarchy (such as AR3T) –Which parts of the company’s business model and value chain are covered –If the targets are set for short-, medium- and long-term periods – for example, ESRS defines these periods analogously to the periods used by financial institutions in their financial statements for short-term (up to five years), medium-term and long-term (more than five years)51 –If the targets are aligned with national and international policy objectives on nature and biodiversity, such as GBF, countries’ NBSAPs or other policy commitments and regulations 27 Nature Positive: Corporate Assessment Guide for Financial Institutions