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by
Seneca ESG
- June 15, 2023
Science Based Targets Network (SBTN) has announced the first release of Science Based Targets for Nature (SBTs for Nature) since its initial public consultation on the SBT for Nature Initial Guidance for Business in September 2020. [1] SBTN is part of the Global Commons Alliance and is separate from the Science Based Target initiative (SBTi). The first release of SBT for Nature marks SBTN’s effort to build on SBTi’s momentum and provide corporations a framework to set scientific targets aiming to reduce their negative impacts on nature and mitigate biodiversity loss. [2] This also corresponds to the fourth pillar of the draft recommendation of Taskforce on Nature-related Financial Disclosures (TNFD) that is to be finalized in September 2023. [11] Companies who wish to publish a TNFD report would have a practical methodology to set the metrics and targets related to nature and biodiversity under SBTs for Nature.
Compared with the initial high-level target categories proposed in the consultation, the first release confirmed only the steps to Assess, Prioritize, and Set targets for land use change, freshwater withdrawal, and freshwater pollution from nitrogen and phosphorus. SBTN has announced the release of the final steps of Act and Track for 2024 and is committed to a more complete biodiversity coverage in its methodology. [3][4][5]
SBTi for GHG v.s. SBTs for Nature: What is the difference?
The atmospheric property of GHG emissions makes such drivers of nature change a global problem, while non-atmospheric drivers of nature change such as land use, water withdrawal, and water pollution are more likely to cause local problems. Unlike SBTi’s global approach to prescribe 4.2% as the minimum annual GHG emission (Scope 1 & 2) reduction target by 2030, SBTN took a case-by-case approach for companies setting SBTs for Nature. SBTN requires a company to identify potential environmental impacts across its value chain and prioritize locations that need the most improvement. The company should utilize additional data sets such as water stress map and Ecosystem Integrity Index to have a contextualized understanding of its pressures on biodiversity in each location. [4][6] Therefore, it would make less sense to combine such quantitative targets in a simple summation or to track overall performance on the company level for companies that have value chains with global presence.
This also reflects the differences in steps of setting the targets under SBTi and SBTs for Nature. The former has already finished the threshold analysis on the global scale and a company can determine its base year and target year to extrapolate its GHG reduction target from the prescribed minimum 4.2% linear annual reduction rate. The latter aims to set mainly contextualized nature targets and its first step follows a materiality assessment and stakeholder engagement approach. Companies with existing GRI-compliant reporting can easily transfer their experience in materiality assessment to specific environmental materiality assessment. The next steps develop further from materiality to value chain assessment to determine the pressure a company generates in specific geographical areas. SBTN currently requires 5 categories of pressure to be set with SBTN’s methods, which are Land use and land use change (Terrestrial ecosystem), Water use, GHG emissions, Water pollutants, and Soil pollutants. The first release does not require downstream assessment of these pressures but require a company’s direct operation and at least 67% of the purchased goods and services from upstream value chain to be assessed. 100% of material activities associated with high impact commodities should be included in the upstream value chain assessment, such as palm oil, soybean, cement, petroleum, and cotton. By combining pressure and state of nature data, a company can obtain several heat maps that show each category of pressure against the state of nature of each geographic location. [7]
Once the heat maps are obtained, companies should be ready to prioritize which locations need the most ambitious targets. To get into the Prioritization step, SBTN introduced the concept of target boundary, which delimits the geographical area each target is supposed to be bound to. Companies must determine target boundaries separately for direct operations and upstream value chains. Ideally the target boundaries should be defined with coordinates or on subnational levels. Due to possibly inaccurate location data in the upstream value chains, SBTN also introduces target category B that allows less spatially accurate data. With target boundaries, companies can proceed to rank their target boundaries against all the categories of pressure separately from the previous step of assessment. SBTN has recommended that at least 10% of basins and land within a company’s target boundaries be prioritized and that a company consider social factors such as human rights. [8]
In the target setting step, just like SBTi uses the latest climate science to set the global threshold of CO2 emissions, SBTN requires the hydrological sciences to set local thresholds, for example, for freshwater withdrawal and effluent of nitrogen and phosphorus. In practice, the first release requires a company to select a local model that can determine such thresholds for a specific basin from the SBTN database, local governments, or stakeholder engagement. If no local models are available, the company is required to use a global model to set threshold for a specific basin with the proper spatial scale required for each category of pressure. Since more than one company can share the same basin, the company targets should derive from the overall threshold for the basin it is located in. For locally developed models, SBTN gives a simple equation to calculate such basin-wide reduction target as a percentage of basin-wide excess withdrawal over present-day withdrawal. Each company can then apply the percentage to its own site in the basin and will thus set withdrawal reduction target proportional to its present-day withdrawal. [9] In this sense, SBTs for Nature follows a similar threshold methodology for target setting from SBTi, but on a much smaller scale.
The first release shows promising progress of SBTN on applying the same science-based method as that of SBTi to setting the targets for mitigating biodiversity loss. It appears to be much broader and more complex than SBTi for GHG emissions. It remains to be seen whether SBTs for Nature can pick up the pace SBTi has gained throughout the years. [10]
Sources
[1] https://sciencebasedtargetsnetwork.org/how-it-works/the-first-science-based-targets-for-nature/
[2] https://sciencebasedtargetsnetwork.org/our-mission/
[6] https://sciencebasedtargets.org/resources/files/SBTi-criteria.pdf
[10] https://sciencebasedtargets.org/resources/files/SBTiProgressReport2021.pdf
[11] https://framework.tnfd.global/draft-recommended-disclosures/
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