Our key takeaway: Standards proliferate for company impacts on key topics like greenhouse gas emissions, deforestation and water. The World Benchmarking Alliance (WBA) believes that “[t]he urgent need for action on nature contrasts with the current landscape of corporate impacts. While standards and disclosures are established in some areas, many areas remain uncovered. The issues related to corporate impacts on nature are novel, and many companies are just starting to capture and disclose relevant information.” The WBA’s forthcoming Nature Benchmark aims to bring standardisation to other critically important—and sometimes more complex—topics like company impacts on biodiversity, ecosystems and the nexus between people and the environment.
The World Benchmarking Alliance (WBA) has published the Nature Benchmark Methodology (April 2022), the methodology for its forthcoming Nature Benchmark which will rate the performance of companies on addressing their impacts on nature, specifically biodiversity and ecosystems. This work builds on WBA’s systems transformation model, which puts people at the center of progress on climate action, urban development, technological innovation, food systems and circular economy.
Three key highlights:
· Incentivising action on protecting nature throughout the value chain, “with people at its heart”: There are gaps in existing standards related to business’s impact on the planet. Certain topics are already “relatively standardised and disclosed,” like greenhouse gas emissions, land use, deforestation and water: “On these more established topics, stakeholders’ expectations are also established and high: companies must demonstrate they are progressing towards a science-based target (for GHG emissions, for example), a net-zero deforestation objective or demonstrate how their water withdrawal efforts are particularly effective within water-scarce contexts.” However, this level of clarity and standardisation does not exist across all environmental topics, especially a complex issue like biodiversity. WBA says that this benchmark will serve as a “steppingstone” for companies to develop a strategic approach to biodiversity conservation. The methodology is action-oriented, “designed to incentivise companies to understand where biodiversity risks are highest and act quickly to halt damaging trends.” WBA also highlights the central “people” component of this benchmark, in line with its social transformation model: “A crucial topic that this methodology seeks to address is the nexus between nature, people and corporate behaviour. While this methodology is predominantly focused on non-human nature and biodiversity, human rights and dignity are the fundamental starting point.”
· Assessing the companies that contribute most to biodiversity gain and loss: WBA benchmarks focus on SDG2000 companies (those “with the greatest potential to positively or negatively impact the systems in which they operate”). The Nature Benchmark will assess half of those companies across 22 industries, in 2022 and 2023. Companies were selected based on WBA’s methodology to define its “SDG2000 ‘keystone companies’” based on five core principles: the company’s global production revenues and/or volumes within its sector; the company’s control over global segments of production or services; whether the company connects global ecosystems through its subsidiaries and supply chains; the company’s influence on global governance; and the size of the company’s global footprint, especially in developing countries. In addition, “WBA has also sought to include companies it identified as having a disproportionately positive or negative influence on nature and biodiversity loss specifically in developing countries.” In 2022, the benchmark will assess companies in 8 industries: apparel and footwear, chemicals, construction and engineering, construction materials and supplies, containers and packaging, metals and mining, pharmaceutical and biotechnology, and tires and rubber. In 2023, the benchmark will cover a further 14 sectors: agricultural products, automobiles and components, capital goods, conglomerates, electronics, food and beverage, IT software and services, logistics, oil and gas, paper and forest products, passenger transport, personal and household products, retail and utilities. See a full list of companies at this link.
· Which indicators companies will be benchmarked against: “There are 25 transformation indicators specific to the Nature Benchmark, in addition to 18 core social indicators.” Companies will be measured across three categories, each weighted differently. Governance and strategy (16%) includes 5 indicators: sustainability strategy; accountability for sustainability strategy; stakeholder engagement, lobbying and advocacy, circular and nature-positive transition. Ecosystems and biodiversity (51.2%) includes 16 indicators under 6 broad categories: state of nature, land and sea use change, direct exploitation of resources, pollution, climate change, invasive alien species. Social inclusion and community impact (32.8%) includes 4 nature-specific indicators (in addition to WBA’s 18 core social indicators): right to a safe, clean, healthy and sustainable environment, indigenous peoples’ rights, land rights, water and sanitation. The benchmark’s 25 indicators will be “industry-agnostic,” given the wide variety of sectors covered in the benchmark (recognising that this approach “has its limits,” WBA notes that companies will have the opportunity to justify why a certain indicator is not relevant to their business).
