AMPLIFY  VOL. 38, NO. 2
  

The EU’s Corporate Sustainability Reporting Directive (CSRD) requires companies to disclose information on their impact, risks, and opportunities concerning environmental, social, and governance (ESG) issues (see Figure 1¹). It entered into force in 2023, and companies had to apply the new rules for the first time in the 2024 financial year. (Although the disclosure requirements of CSRD are outlined in the European Sustainability Reporting Standards [ESRS], in this article, we refer to the CSRD throughout for consistency and to avoid confusion.)

Beatrice Boarolo, consultant at sustainability consultancy ERM, explains its significance:

CSRD represents a significant advancement of corporate sustainability reporting, setting a new standard for corporate transparency and accountability on ESG topics. The ambition is to provide standardized, consistent, and reliable sustainability reporting with respect to existing regulatory frameworks worldwide.

Science-Based Targets for Nature & CSRD

Science-based targets (SBTs) for nature equip companies to address their environmental impacts by taking measurable, place-based action based on ecological and social thresholds.² They are developed by the Science Based Targets Network (SBTN), a voluntary civil society-led initiative (see sidebar “SBTs for Nature Basics”).

Both CSRD and SBTs for nature support transitions to more sustainable corporate practices. They are complementary yet distinct:

• Type. SBTs for nature are developed by SBTN, a voluntary, civil society-led initiative; CSRD is a mandatory EU legislation, although it has some voluntary components.

• Purpose. CSRD is designed to increase corporate transparency and provide decision-useful information to stakeholders through disclosures; it does not prescribe sustainability actions or performance beyond disclosures.³ SBTN’s methods focus on setting SBTs and are prescriptive about which targets are set and how this is done.

• Scope. SBTs for nature are aimed at corporate end users across the world; CSRD is aimed at companies based in the EU or with significant operations there.⁴ CSRD encompasses a broader set of ESG topics than SBTN and more fully accounts for the downstream value chain.^5,6

• Focus. CSRD requires disclosures based on impact and financial materiality, including a company’s material dependencies on nature. Financial materiality and dependencies are both considered in SBTN’s methods in the prioritization step (2C), although the explicit focus of the methods is on impact materiality.

This article discusses how CSRD and SBTs for nature can complement each other.⁷ We explore this through three possible use cases for setting SBTs for nature in the context of CSRD:

1. To inform disclosures

2. To go beyond disclosures

3. To create long-term value

Although setting SBTs for nature can help companies meet some of their CSRD requirements to a high standard, it does not guarantee compliance, as CSRD is broader and necessarily has specific requirements.

Inform Disclosures

SBTs for nature offer a rigorous, prescriptive approach that generates data and insights that can inform companies’ CSRD disclosures.

For example, CSRD requires that companies conduct a materiality assessment but does not prescribe how it should be undertaken.⁸ Each company must decide how to conduct its materiality assessment, which can have a significant impact on what is included in the disclosures. This flexibility is welcome for some companies, but it leaves others with concerns about whether its stakeholders will approve of its methods.

WWF explains this clearly in its “Corporate Nature Targets” report:⁹

While some guidance on methodology is given (notably by recommending the use of initiatives like TNFD or SBTN), it’s crucial to understand that the main emphasis of the CSRD is on the disclosure of these elements (or a rationale for their omission if the entity deems them not material), rather than on the quality of the information provided (i.e., corporate practices).

In contrast, SBTN’s methods are prescriptive, requiring companies to assess and prioritize their impacts, set clear thresholds for materiality, and account for state-of-nature variables. Christopher Rannou of WWF is clear on the usefulness of SBTs for nature for the companies WWF works with:

Many companies do not know how to generate some insights needed to inform their disclosure requirements because CSRD is not prescriptive about the methodologies or tools that should be used. SBTN brings clarity by providing these.

Peter McCann, a consultant at Biodiversify, echoes this, explaining the benefits of a rigorous approach:

If you use SBTN methods as a basis for parts of CSRD, your methods will stand up to stakeholder scrutiny. Using an independent set of methods shows that you haven’t just cherry-picked the methods.

SBTN is referenced in CSRD as a resource to help companies set targets, including setting environmental thresholds. SBTN’s methods provide clear guidance on how these thresholds can be established and how responsibility for them can be allocated.

Companies disclosing through CSRD have also found value in following SBTN’s methods when sourcing state-of-nature variables (Step 1B), prioritizing impacts (Step 2), and conducting stakeholder consultations. Companies have reported using SBTN’s materiality screening tool and High Impact Commodity List to inform their CSRD reporting. Broad uptake of SBTN methods would help ensure consistency in approaches to assessing impacts, which would help improve comparability between companies.

French multinational Carrefour attests to the usefulness of SBTs for CSRD:

By applying the SBTN approach, we are more prepared to meet the requirements of the CSRD, thanks to a highly thorough method.

This will only increase over time as SBTN expands methods and guidance, for example, on ocean targets, enablers, taking action (Step 4), and validating results (Step 5).

Go Beyond Disclosures

CSRD focuses on disclosures; SBTN goes a step further by empowering companies to actively address their impacts, showing how much action to take, where to take it, and when to take it, based on what nature needs.

McCann explains why this integrated approach is valuable:

If you do the bare minimum for CSRD, you might meet the regulatory requirements, but you may not be able to use it to inform business decisions. For a rigorous analysis that can inform business decisions, set SBTs for nature.

WWF concurs, stating that “Nature targets are essential to set the ambition for entities’ nature transition planning,” and that SBTN’s methods “represent the gold standard framework for setting nature targets.”¹⁰ This perspective is shared by the companies that piloted this approach, with one reporting:

We believe in the power of the output and that is what makes it worth embarking on the journey… SBTN’s assessment helped in conversations about capital allocation and procurement, and there is benefit in that.

For example, companies piloting SBTs for nature have uncovered risks within their value chains, prompting them to take action where it really matters. One SBTN pilot company says:

After getting Steps 1 and 2 results, we took quick actions to mitigate risk for some sourcing locations.

Going beyond disclosures helps prove to investors and other stakeholders that the company is committed to addressing its impacts and risks. Carly Sibilia of ERM explains:

With CSRD, it’s clear when companies have done the bare minimum, especially where their assessment of nature-related impacts is disconnected from the ecological context.

For example, in CSRD, a company must disclose whether it has set pollution targets, and if so, what these are, but it does not have to actually set them. Where it has set targets, it is optional whether the company takes ecological thresholds into account. Investors and other stakeholders are able to see this, and they may question the usefulness of any targets that have not taken ecological thresholds into account. So, while CSRD does not require that targets be set, it points to a best practice of setting SBTs for nature that use ecological thresholds.

Sam Sinclair of Biodiversify says companies will have to go beyond the bare minimum eventually:

Standards and frameworks such as CSRD and TNFD are like nesting dolls because sooner or later you have to get to grips with the impacts of your supply chain, and SBTN is trying to do this in earnest.

Create Long-Term Value

In the context of an increasingly ambitious regulatory landscape, setting SBTs for nature helps companies build the capacity and resilience needed to adapt to emerging trends and stay ahead of future requirements, creating enduring value for the business.

CSRD may also anticipate similar regulations in other jurisdictions. Even where this does not happen, it may shift stakeholders’ expectations on sustainability reporting. Following SBTN’s methods gives companies a way to preempt future requirements and expectations by engaging with more exacting requirements now.

According to Boarolo:

CSRD requirements will be expanded in the coming years, with sectoral and SME standards in development. By aligning to SBTN’s prescriptive approach now, companies will be better able to anticipate future regulatory requests and other nature-related transition risks.

Setting SBTs for nature can provide other long-term benefits, such as building institutional knowledge and capacity in nature, securing internal buy-in and funding, and developing impactful relationships with stakeholders. For example, Holcim, a global sustainable building solutions company, validated SBTs for nature as part of an SBTN pilot. Holcim set an SBT to reduce freshwater withdrawals in its direct operations in the Moctezuma basin (Mexico) by 39% by 2030. Holcim noted that SBTN helped raise ambition and rigor, including expanding freshwater targets to include the company’s upstream value chain. The company also said it benefitted from learning from companies across various sectors that were involved with the pilot.

Being part of the SBTN Corporate Engagement Program gives companies an opportunity to learn how other firms are approaching emerging challenges. Setting targets also secures the reputation of companies that decide to take early and decisive action on nature.

For some, this represents a different way of conceptualizing SBTs for nature. Sinclair explains:

There are lots of misconceptions about SBTs for nature. It is often seen as an endpoint or a box to tick, whereas in reality, it is a powerful tool for informing business decisions, building capacity, and generating value....

Conclusion

As a complement to CSRD, SBTN empowers companies to actively address their impacts and quantify their contributions to nature positive outcomes:

• Inform disclosures. SBTs for nature offer a rigorous, prescriptive approach that generates data and insights that can inform companies’ CSRD disclosures.

• Beyond disclosures. CSRD focuses on disclosures; SBTN goes a step further by empowering companies to actively address their impacts, showing how much action to take, where to take it, and when to take it, based on what nature needs.

• Long-term value. In the context of an increasingly ambitious regulatory landscape, setting SBTs for nature helps companies build the capacity and resilience needed to adapt to emerging trends and stay ahead of future requirements, creating enduring value for the business.

(Note: This article was researched and finalized before the publishing of the EU Omnibus packages in February 2025.)

Acknowledgment

The author is grateful to the following subject matter experts for their contributions: Sam Sinclair and Peter McCann from Biodiversify, Carly Sibilia and Beatrice Boarolo from ERM, Stefan Jimenez from Deloitte & Touche LLP, and Guillaume Wahl and Christopher Rannou from WWF.

References

¹ “Durable Finance.” Autorité des Marchés Financiers (AMF), December 2024.

² Thresholds refer to the level that pressures should be reduced to in order to safeguard ecological processes (informed by science and stakeholder engagement).

³ For example, CSRD requires disclosure on whether a company has set nature-related targets but does not require these to be set.

⁴ SBTN guidance is being developed for cities to set SBTs.

⁵ SBTN defines nature as the diversity of living organisms, including people, and their interactions with each other and their environment. This perspective emphasizes the deep connection between ecological and human well-being.

⁶ SBTN is exploring expanding guidance to more fully incorporate downstream impacts.

⁷ Thus, we did not include an exhaustive mapping of all possible data overlaps. For information on these overlaps, see: Wahl, Guillaume, Christopher Rannou, and Antoine Pugliese. “Corporates Nature Targets: Ensuring the Credibility of EU-Regulated Commitments.” WWF France, October 2024; and Lemarquis, Laure, et al. “Integrating Companies Within Planetary Boundaries: Appendix 1.” WWF France, September 2024.

⁸ Although the European Financial Reporting Advisory Group has issued non-authoritative guidance on the steps in a materiality assessment; see: “EFRAG IG 1: Materiality Assessment Implementation Guidance.” EFRAG, May 2024.

⁹ Wahl, Rannou, and Pugliese (see 7).

¹⁰ Wahl, Rannou, and Pugliese (see 7).

©2025 Rockefeller Philanthropy Advisors, Inc., on behalf of its fiscally sponsored project, SBTN