Nature’s health is an urgent global risk that demands action. According to a high-level review of Fortune Global 500 companies, over half of all economic activity is moderately or highly dependent on natural capital. However, while many companies acknowledge the importance of nature, few have established nature-related commitments beyond carbon. This article provides an overview of where the world’s largest companies stand on nature-related commitments and highlights challenges companies face in addressing the nature crisis.
The state of nature-related commitments among Global 500 companies
Most Fortune Global 500 companies have established climate-related targets. However, when it comes to other dimensions of nature, targets and acknowledgements are far lower. For example, although over half of the companies acknowledge biodiversity loss, only 5% have set quantified targets in addition to that acknowledgement. This low commitment is unsurprising in light of the long process for companies to understand how to address nature and biodiversity loss. In contrast, corporate understanding of nature is still at its nascent stage.
Among companies that have established nature-related targets, most only consider one dimension of nature, typically climate. Only 16% of the Fortune Global 500 have set targets against three or more dimensions of nature, and no companies have established targets against all six dimensions of nature. One possible explanation is that companies focus on what matters most to their activities. However, expectations are rising, and companies are expected to understand their impacts and dependencies on nature comprehensively.
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Challenges in establishing nature-related commitments
There is no standardised approach to measuring natural capital and ecosystem services. As a result, many companies may not know what steps to take beyond simply acknowledging the challenge. The limited understanding of how to structurally and responsibly engage on the topic of nature degradation prevents many from making quantified commitments. This potential explanation is supported by sustainability experts who work with companies globally.
Sectors leading in nature-related targets
A sector-level cut of the data reveals that, as a proportion of the overall sector, transportation leads on overall target setting. This is likely due to the sector facing a combination of climate transition risks, regulatory focus on carbon emissions, and a shift to renewable energy, among other factors. Agriculture leads on setting three or more targets in addition to climate, compared with other sectors, likely due to increased attention to water and nutrient pollution concerns.
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The way forward for effective nature-based action
At the United Nations Biodiversity Conference (COP 15), governments agreed a biodiversity framework to restore 30% of land and water by 2030 to ensure that the shared vision of living in harmony with nature is fulfilled. This presents an opportunity for companies to take bold actions to address the nature crisis. Corporate leaders need to understand the shape of the challenge ahead, the risks to their operations, the opportunities for business building, the key targets, and the actions their companies can take. Companies taking these steps will be better positioned to spur effective nature-based action and contribute to a more sustainable future.
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In conclusion, while many Fortune Global 500 companies acknowledge the importance of nature, nature-related commitments remain low beyond carbon. Companies face several challenges in establishing nature-related commitments. However, by understanding the challenges and taking bold actions, companies can contribute to a more sustainable future.
DGB Group is committed to helping nature and biodiversity flourish by developing large-scale nature-based projects that restore vital habitats and degraded land. We also help businesses measure and offset their environmental impact so that they can contribute to a more sustainable future.
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