P2: Target setting & performance management

Guiding Question: How will we set targets and define and measure progress?

Reporting metrics and targets associated with nature-related risks and opportunities

The TNFD draft disclosure recommendations, like those recommended for climate-related risks and opportunities by the TCFD, requires organisations to:

“Disclose the metrics used by the organisation to assess nature-related risks and opportunities in line with its strategy and risk management process” (Metrics & Targets A)

And

“Describe the targets used by the organisation to manage nature-related risks and opportunities and performance against those targets” (Metrics & Targets B).

The TNFD recognises that reporting metrics and targets associated with nature-related risks and opportunities are at an embryonic stage of development, even for the most advanced organisations with several years of experience reporting nature-related risks. Encouragingly, this space is attracting significant attention from organisations such as SBTN, UNEP-WCMC, IUCN, CDP, GRI, IFRS, a range of large market data providers, and intermediaries such as Bloomberg, the London Stock Exchange Group (LSEG), S&P and Moodys. It has also spawned a dynamic community of nature-related data and metrics entrepreneurial startups. The data, metrics and targets landscape is moving quickly and the TNFD will continue to evaluate and participate in this space, which could provide accessible, scalable solutions for a wide-range of market participants.

The TNFD has produced a discussion paper on data as part of this beta release of the framework and welcomes feedback from market participants.

Target setting approaches

Additional guidance is provided below on existing market approaches to developing a performance management framework for nature-related risks and opportunities. The TNFD will be working closely with a range of partners over the course of 2022 and 2023 to continue to support the development of a robust, scalable and accessible approach to nature-related metrics and targets.

Data & metrics for analysis and performance reporting

To support market participants in their pilot testing of the TNFD Framework, including the LEAP approach and reporting against the TNFD’s draft disclosure recommendations, we intend to signpost to reputable online sources of data, metrics and targets across a range of natural capital dimensions (environmental assets, ecosystem services, impact drivers and industry sectors). This will be supplemented with additional guidance by sector, and potentially by biome, to support market participants in their efforts to find and use high-quality data and contextualise it, with the aim of moving towards reporting that is comparable at an industry level.

Links to data sources will be updated throughout 2022 and 2023 through subsequent updates to the TNFD Framework (currently expected in June 2022, October 2022 and March 2023).

The TNFD is particularly interested to learn from current market practice in finding, using and reporting against nature-related metrics and targets.

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