Nature Positive Corporate Assessment Guide for Financial Institutions 2025

CDP questionnaire 2024 – nature targets FIGURE 7 Water target Plastic target Forest target654 3,4802,454 Yes Source: Carbon Disclosure Project (CDP). In light of evolving guidance available in this area, financial institutions will primarily want to understand whether their portfolio companies have set nature targets and whether they have plans to refine targets or increase ambition once more concrete guidance has been established. SBTN is developing technical science-based target guidance, with an initial cohort of 17 companies participating in the first year-long pilot programme. This programme focuses on setting SBTN targets for land (e.g. no conversion of natural ecosystems, land footprint reduction and landscape engagement) and freshwater (e.g. quantity and quality), with ocean targets forthcoming. Of the companies in the initial cohort, 60% have received SBTN validation, and three companies – GSK, Holcim and Kering – have publicly disclosed their targets to date. More companies will follow suit. Despite challenges in data availability (e.g. the need for basin-specific data or data on nutrient concentrations), 150 additional companies are now preparing to set their own science-based targets.57Beyond organization-wide targets, companies may be able to set smaller-scale targets on a project or site level, in response to a specific nature impact. These also act as indicators of a company’s willingness to take measurable action. Financial institutions can encourage companies that have already identified material nature-related issues and plans to take action to translate these into concrete targets. Examples of SBTN-aligned targets include: –Water: Reduce its freshwater withdrawals in its direct operations in the Moctezuma basin by 39% to 90,808 m3 per year by 2030 compared to an average 2022-2023 baseline (Holcim); reduce its freshwater net withdrawal in its direct operations in the Upper Godavari basin in India by 100% by 2030 compared to an average 2018-2022 baseline (GSK)58 –Land: Reduce absolute agricultural land footprint by 3% by 2030 from a 2022 baseline (Kering)59 In light of evolving guidance available in this area, financial institutions will primarily want to understand whether their portfolio companies have set nature targetsExisting frameworks that companies may start to use: –SBTN: The network provides guidance that real- economy companies can use to set targets and take action on freshwater and land (with ocean targets forthcoming).52 –TNFD: The “prepare” phase of the LEAP approach includes guidance on setting targets in response to nature-related issues, which is consistent with the SBTN framework.53 –Mitigation hierarchy: This provides guidance on prioritizing targets and actions that reduce impacts on nature according to the hierarchy (avoid, reduce, restore, offset, contribute).54 –Nature benchmarking initiatives state expectations around the nature targets of companies like Nature Action 10055 and the WBA.56 Insights from current data Companies are increasingly setting targets on nature. According to disclosures through CDP , companies already have targets related to plastic (2,454), water (3,480) or forest (654). Nature Positive: Corporate Assessment Guide for Financial Institutions 28