Steps to disclosure

Board directors may find it useful to consider four steps leading to successful climate and nature disclosure. These steps are part of a transition planning process, one step informing the following, which culminates in reporting material natural capital-related information. It also is an iterative process that evolves with the organisation’s ambition and business plan.
 

Figure 3. The climate and nature disclosure cycle.

1.  Measure baseline

Determining a climate and nature baseline is essential for any organisation before setting targets and devising a plan to achieve them. Establishing the climate baseline entails calculating the organisation’s GHG emissions profile, also referred to as its carbon footprint. The nature baseline includes various metrics related to the interactions between the organisation and nature (e.g., relating to biodiversity, water use, pollution and waste generation, or water/land-use change). This step also determines the highest priority metrics prior to the target-setting process. Establishing the baseline should follow an evidence-based approach, provided by a recognised global framework, such as:

Figure 4. Global frameworks that help establish the climate and nature baseline of an organisation. 

2.  Set ambition and targets 

In this stage, the organisation sets appropriate goals by adopting a credible transition plan towards a net-zero and nature-positive business. Setting science-based targets provides organisations with actionable and time-bound goals aligned with the latest scientific evidence and global policy, such as the Paris Agreement and the Global Biodiversity Framework. To ensure targets are credible and science-based, organisations can follow SBTi and SBTN guidance, which can help protect against reputational risks. Businesses could also decide to validate their targets through those organisations or join recognised target-setting coalitions such as the Race to Zero campaign.  

Figure 5. Organisations providing evidence-based support to set climate and nature targets. 

3.  Implement plan and monitor 

Once targets are set, it is important to establish a credible implementation pathway or plan to achieve them and integrate that pathway with the broader business strategy. Developing a step-by-step plan to attain net-zero and nature-positive goals gives organisations credibility and ensures accountability. It is also important to assess and manage the progress and shortfalls in achieving the targets, and to undertake improvements as needed.  Below are the internationally accepted guidance and frameworks on how to establish pathways to achieve sustainability targets: 

Figure 6. Guidance and frameworks which support organisations to develop implementation plans to achieve the organisation's climate and nature ambitions. 

4.  Report and disclose material information 

Finally, reporting and disclosing the climate and nature information developed in the previous steps completes the cycle. It is important to stress that this is an iterative process towards consistent and robust disclosure that should evolve with the organisation’s ambition and business plan.  

At a global level, many evidence-based frameworks and standards exist to support organisations in different aspects of climate and nature disclosure. These standards and frameworks guide organisations in disclosing material information, relevant to their stakeholders. Following recognised standards is important to ensure credibility of the information disclosed and prevent reputational risk from greenwashing. Whilst the global disclosure landscape is complex, efforts are underway to ensure harmonisation. The diagram below shows the relationship between different standards, frameworks and the standard-setting bodies leading the way to corporate climate and nature disclosure.

Figure 7. Climate and nature disclosure landscape at the global level.