Scope and objectives

This report addresses corporate nature target-setting within the European Union (EU) framework provided by the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS). It aims to guide entities in implementing ESRS requirements, particularly ESRS E2 to E5, using WWF expertise and the Science Based Targets for Nature (SBTN). The report also evaluates the relevance of SBTN for EU non-financial corporate reporting, excluding transition plans explicitly.

Presentation of ESRS requirements for nature target reporting

The CSRD and ESRS establish mandatory disclosures for sustainability information, focusing on pollution (ESRS E2), water and marine resources (ESRS E3), biodiversity (ESRS E4), and circular economy (ESRS E5). Entities subject to CSRD must report impacts across their entire value chains, utilising double materiality analyses. Qualitative characteristics required by ESRS include relevance, faithful representation, comparability, verifiability, and understandability. Targets must be geographically specific, scientifically informed, and based on ecological thresholds, clearly differentiating between mandatory legislative targets and voluntary commitments.

WWF recommendations for nature target setting in the context of ESRS disclosures

Targets must fully cover entities’ activities and value chains as well as be specific sectors related

Targets should comprehensively include direct and indirect impacts across upstream and downstream activities, informed by a detailed location-based risk analysis using tools like WWF’s Risk Filter Suite. Sectors such as agriculture, energy production, construction, mining, and paper industries should prioritise nature-related risks.

Targets need to be related to ecosystem and nature pressures as well as geography-specific

Each ecosystem faces unique pressures including land use change, exploitation, climate change, pollution, and invasive species. Entities must tailor targets according to specific local ecosystem characteristics and integrate broader international objectives. Collective action involving stakeholders within local contexts is encouraged.

Targets should be scientifically based

Entities should leverage scientific methodologies, referencing critical thresholds highlighted by frameworks like Planetary Boundaries, integrating available scientific evidence to formulate credible, actionable targets. Collaboration with academic, governmental, indigenous groups and NGOs is recommended to enhance scientific validity. Where robust methodologies are unavailable, targets must reflect urgency to act.

Targets need to be time-bound and combine quantitative and qualitative data

Entities must define clear short-term (one year), medium-term (up to five years), and long-term (over five years) targets. Short-term targets address immediate material impacts; medium-term targets expand progressively as entity maturity grows; long-term targets ensure strategic coherence. Quantitative measures, such as hectares restored, must be complemented with qualitative evaluations of ecological health. Transparent reporting of target methodologies, assumptions, baseline conditions, and performance against these targets is essential.

Target hierarchy – analysis of target typology

WWF introduces a hierarchy of target types: science-based targets (SBTs), contextual targets, political and societal-informed targets, sectoral targets, and entity-specific targets. Entities should prioritise SBTs validated by SBTN, but contextual targets can bridge immediate gaps, considering local ecosystem realities. Political targets (e.g., EU Farm to Fork) offer alignment with broader regulations, while sectoral targets facilitate collective industry action. Transparent rationale is required regardless of target type chosen.

SBTN: A framework of reference for science-based nature target-setting

SBTN progress to date

SBTN offers a structured, scientifically robust framework for entities, aligned with international biodiversity goals. It includes five steps: Assess, Interpret and Prioritise, Measure, Set and Disclose, Act, and Track. The current methodology covers freshwater and terrestrial ecosystems, with marine ecosystems targeted for 2025.

Framework alignment between SBTN and the EU ESRS technical guidelines

ESRS explicitly references SBTN as a recommended approach for defining ecological thresholds, aiding compliance with multiple ESRS requirements. SBTN enables detailed responses on impact assessments, target boundary delineation, and stakeholder engagement.

A focus on the SBTN step 3 pilot entities

Pilot studies involving entities like Carrefour and H&M demonstrate SBTN’s effectiveness in guiding nature-related strategies, highlighting governance support, supplier engagement, and data traceability as critical success factors despite identified implementation challenges.