Official trial results won’t be announced until April. Today, I have a preview of the results for you that point to how companies can benefit from the learnings to build their nature-positive strategy.

But first, a quick reminder of what this is all about: the corporate world’s climate and nature agenda. Forward-thinking companies have been working on decarbonization plans at least since the Paris Agreement was made in 2016, if not further back.

To make progress, they could count on two organizations that played a coordinating role in companies’ quest to become “net zero” on carbon emissions: the Task Force on Climate-Related Financial Disclosures, which came up with a framework for corporate disclosures on the climate, and the Science-Based Targets Initiative, which helped companies set specific goals.

On the nature side, company involvement has been less pronounced, but things picked up after the COP1 meeting on biodiversity in Montreal/Kunming in 2021. Since then, two other organizations in this space have been leading the charge: the Task Force on Nature-Related Financial Disclosures and the Science Based Targets Network.

SBTN has been enlisting avant-garde global companies to sign up for their first science-based targets for nature, including Danone’s Alpro, beauty retailer L’Occitane, Kering (owner of Puma), dairy producer Bel, beer maker Anheuser-Busch, and a dozen more. (We featured one last year, GSK, which set water goals, among other targets.) So how did they fare?

I caught up with SBTN director Erin Billman this week for an exclusive sneak preview. She shared four insights:

Companies tend to raise their nature ambitions as they move through the process. One company first focused on a target of “zero deforestation,” for example, but expanded that to “zero conversion of natural ecosystems.” The company realized that forests are just one of several ecosystems that it affected and that it should equally protect the others, like peatlands, to be nature-positive.

Setting nature-based targets leads to measurable benefits. “The process of understanding their value chain impacts on nature, requires companies to increase their upstream traceability, working more closely with their suppliers,” Billman said, to prioritize action and impact. For example, after realizing there was risk of a problematic herbicide being used at one of their suppliers, one company removed it from its value chain, reducing the perceived risk to the business.

Setting nature-based targets requires balancing rigor and feasibility. “What we aim to do is find the equilibrium between what is currently feasible and what will make a difference,” Billman said. “To change the status quo, things have to be done differently, but we have to meet leading companies where they’re at.” The key, she said, is to avoid both making goals so easy as to be ineffective and so challenging that they feel impossible.

Key skills are at the center of this work. This work demands specific, often highly technical skills that either need to be developed in-house or tapped external resources like NGOs or consultants, Billman said. These needs include lifecycle analysis, proficiency and spatial analysis (what is happening where), and a deep understanding of environmental data. One company chose to build this capability in-house; “then they leverage partners to check their work,” she said.

Where do these learnings leave us? In a place where soon more companies will be able to set nature-based targets, Billman said. Given how severely human and industrial activities are breaching planetary boundaries, the SBTN trial didn’t come a day too soon, I’d argue. Some 200 companies are waiting in the wings to join. Bring ‘em on.

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Executive Editor, Fortune
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This edition of Impact Report was edited by Holly Ojalvo.

ON OUR RADAR

Elon Musk's beholden board: A vindication of S&P (Fortune)

If you haven't already, read Fortune CEO Alan Murray's take today on the Delaware court's decision to strike down Elon Musk's $56 billion pay package as CEO of Tesla.

"There was apparently no substantive discussion by the board or its compensation committee about the size of the package, no serious evaluation of alternatives, no peer comparison study used to evaluate it," Murray wrote. In her ruling, the judge also admonished the board composition at Tesla: “Five of the six directors who voted on the grant were beholden to Musk or had compromising conflicts,” she wrote. 

Our take: The court's decision is a welcome step to improve the governance at companies such as Tesla. But many observers now owe an apology to Standard & Poors, the rating agency that booted Tesla back in May 2022 from its ESG ranking, precisely for scoring poorly on "S" (social) and "G" (governance) metrics.  

At the time, Musk used what was then still known as Twitter to proclaim that “ESG is a scam” and that S&P had “lost their credibility.” "He said the sustainability criteria put in place by S&P really have to do with 'how compliant your business is with the leftist agenda'," my colleague Christiaan Hetzner reported then. We see no evidence that the  Delaware court chancellor who made the ruling has a leftist agenda. S&P was right to kick Tesla off its rankings.