Framework and guidance: Metrics & Targets
Metrics and Targets
Disclose the metrics and targets used to assess and manage relevant nature-related dependencies, impacts, risks and opportunities.
Investors and other stakeholders need to understand how an organisation measures and monitors its nature-related dependencies, impacts, risks and opportunities. Access to the metrics and targets used by an organisation allows investors and other stakeholders to better assess the organisation’s risk-adjusted returns, ability to meet financial obligations, general exposure to nature-related issues, and progress in managing or adapting to those issues. They also provide a basis on which investors and other stakeholders can compare organisations within a sector or industry.
The metrics and targets disclosures ask an organisation to report the metrics and targets used to identify, evaluate, assess and manage relevant nature-related dependencies, impacts, risks and opportunities.
A. Disclose the metrics used by the organisation to assess and manage material nature-related risks and opportunities in line with its strategy and risk management process.
Guidance for all sectors
An organisation should provide the indicators and metrics used to measure and manage nature-related risks and opportunities, and disclose any quantification undertaken, referring to the risk and opportunity categories outlined in Annex 2.
For risks and opportunities described in disclosure recommendation Strategy A, an organisation should provide indicators and metrics at the individual risk and opportunity level, referring to the global core and additional indicators and metrics listed in Annex 2.
Where relevant, an organisation should financially quantify the risks and opportunities. This could include the costs incurred from mitigating or adapting to nature-related risks, such as relocating operations or revenue from products and services that have positive impacts on nature.
Over time, indicators and metrics should be provided for historical periods to allow for trend analysis. Where appropriate, an organisation should provide forward-looking nature-related indicators and metrics, consistent with its business or strategic planning time horizons. In addition, an organisation should provide a description of the methodologies and assumptions used to calculate or estimate nature-related indicators and metrics, including any limitations.
Where nature-related issues are material, organisations should describe whether and how related performance metrics are incorporated into remuneration policies.
B. Disclose the metrics used by the organisation to assess and manage dependencies and impacts on nature.
Guidance for all sectors
An organisation should provide the key indicators and metrics used to measure and manage dependencies and impacts on nature, with reference to impact drivers, changes to the state of nature and changes to ecosystem services.
This should include the following:
- Material business impact drivers, connected to the priority locations identified in Strategy A and D where possible, and with reference to the relevant change to the state of nature. This should include quantification of the global core and additional impact and dependency disclosure metrics in Annex 1, and sector and biome-specific metrics in Annexes 4 and 5. An organisation should consider describing any interconnections between dependencies and impacts, such as where it has an impact on an ecosystem on which it also depends;
- External trends affecting the state of nature in ecosystems in priority locations that the organisation depends on, where feasible. Organisations could also consider quantifying external trends, referring to the indicators and metrics in Annex 1 and sector and biome-specific metrics in Annexes 4 and 5;
- Whether and how the organisation assesses the condition and extent of the ecosystems in priority locations, with reference to the tools, data platforms, indicators and metrics used, and the science-basis for the link to response to nature-related risks and opportunities. Where the organisation is not currently measuring changes to the state of nature, the organisation should explain why this is the case and whether and how this will change in future periods. Organisations should also consider quantifying changes to ecosystem condition and extent in priority locations, referring to the additional metrics in Annex 1 and sector and biome-specific metrics in Annexes 4 and 5;
- A description of the ecosystem services influenced by the organisation’s impact drivers in priority locations, including where changes to the ecosystem service may affect stakeholders;
- A description of the dependencies on ecosystem services in priority locations by type of ecosystem, highlighting where dependencies are connected to organisation’s impact drivers; and
- For ecosystem services that the organisation simultaneously has an impact on and depends on in priority locations, organisations should consider quantifying changes to the provision of the service, referring to the additional metrics in Annex 1 and sector and biome-specific metrics in Annexes 4 and 5.
Over time, metrics should be provided against historical baselines and reference states and/or industry averages for trend analysis. Where appropriate, an organisation should consider providing forward-looking nature-related indicators and metrics, consistent with its business or strategic planning time horizons.
In addition, where not apparent, an organisation should provide a description of the methodologies and assumptions used to calculate or estimate nature-related indicators and metrics, including any limitations. An organisation should also describe the scope of the value chain(s) covered by the nature-related indicators and metrics.
C. Describe the targets and goals used by the organisation to manage nature-related dependencies, impacts, risks and opportunities and its performance against these.
Guidance for all sectors
An organisation should describe the targets and goals established to manage nature-related dependencies, impacts, risks and opportunities, and disclose performance against these targets and goals.
Disclosures should include:
- The strategy or risk management objective the target seeks to address, including any anticipated regulatory requirements, market constraints, limitations or other contextual information relevant to understanding the target;
- The metric used to quantify the target and monitor performance;
- The targeted value of the metric;
- The baseline (year and level);
- Timeframe to achieve the target;
- Short and medium-term interim targets or trajectory;
- The methodology used to set the target, including any external, preferably science-based, standards;
- The reasoning behind this approach;
- The monitoring, reporting and reviewing process;
- Performance against the target on a historical and current year basis, updated annually; and estimated performance against targets for the following year, where appropriate;
- Explanation of why the organisation exceeded or fell short of the target trajectory, and any adjustment or resetting of targets from prior period; and
- whether and how targets and goals align with or support the targets and goals of the Kunming–Montreal Global Biodiversity Framework, the Paris Agreement on climate change, the Sustainable Development Goals, Planetary Boundaries and other global environmental treaties, policy goals and system-wide initiatives.
Targets in scope include:
- Targets for changes to impact drivers;
- Targets to improve or maintain the flow of ecosystem services;
- Targets to improve or maintain the state of nature;
- Targets for changes to business activities and processes correlated with dependencies and impacts;
- Enterprise-level targets directly or indirectly affecting nature-related dependencies, impacts, risks and opportunities. For example, business model changes that increase the circularity of the business or the traceable or certified share of the supply chain; and
- Other targets to address nature-related dependencies, impacts, risks or opportunities.
In all cases, targets should be specific and time-bound, quantified with metrics that can be suitably measured and relevant to the organisation’s strategy or risk management plans, including the pursuit of opportunities.
Organisations should consider reporting the following:
- Proportion of targets that address short-term, medium-term and long-term risks and opportunities;
- Proportion of targets and commitments with time commitments in place;
- Proportion of targets that are time-bound and quantifiable; and
- Proportion of geographical sites/priority locations that are covered by targets.
In preparing this disclosure, organisations may also refer to the TNFD’s additional guidance on target setting.