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1、Goldman Sachs does and seeks to do business with companies covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making thei

2、r investment decision.For Reg AC certification and other important disclosures,see the Disclosure Appendix,or go to employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.The Goldman Sachs Group,Inc.For the full list of authors,see inside.Madeline Meyer

3、+44 20 7774-Goldman Sachs InternationalShubham Jain+1(332)245-Goldman Sachs India SPLEvan Tylenda,CFA+44 20 7774-Goldman Sachs InternationalRachit Aggarwal+1(212)934-Goldman Sachs India SPLEQUITYRESEARCH|August 29,2024|3:58 AM BSTNature&BiodiversityAnalysing risks and opportunities through a new Nat

4、ure Data ToolAs more companies focus on Biodiversity and Nature to both meet corporate sustainability strategies and manage business risks,we see rising interest by corporates and Sustainable investors to quantify Nature-related performance,risk and enablement.With this report we introduce the GS SU

5、STAIN Nature Framework,a new dataset that looks to better quantify 1)corporate exposure and relevance,2)transparency and strategy,and 3)performance on four different drivers influencing nature outcomes.As Nature and Biodiversity is early in its emergence as a theme investors are looking to quantify

6、at the company-specific level,we would hesitate to draw strong conclusions about Natures current impact on equity valuation,though we may see greater divergence over time.We do,however,find that companies with stronger relative Nature Performance(based on our Nature Framework)trade at modest premium

7、s to laggard peers,while more Transparent companies tend to trade at discounted valuation vs less transparent peers.We believe this supports the view that the market may be more willing to reward favourable performance-driven outcomes from companies,rather than just disclosure alone,consistent with

8、our views on broad ESG integration and Climate Transition.NoteNote:The following is a redacted version of the original report published August 29,2024 73 pgs.Madeline Meyer+44(20)7774-Goldman Sachs InternationalCONTRIBUTING AUTHORSEvan Tylenda,CFA+44(20)7774-Goldman Sachs InternationalShubham Jain+1

9、(332)245-Goldman Sachs India SPLRachit Aggarwal+1(212)934-Goldman Sachs India SPLGrace Chen+44(20)7774-Goldman Sachs InternationalBrian Singer,CFA+1(212)902-Goldman Sachs&Co.LLCDerek R.Bingham+1(415)249-Goldman Sachs&Co.LLCBrendan Corbett+1(415)249-Goldman Sachs&Co.LLCEmma Jones+61(2)9320-Goldman Sa

10、chs Australia Pty LtdExecutive Summary 3 The GS SUSTAI N Nature Tool:Measuring Biodiversity&Nature Adopters 9 Moving beyond managing risk:I dentifying Biodiversity&Nature Enabl ers 23 What sustainabl e investors may l ook to assess but where discl osure remains l imited 28 Frameworks and Catal ysts

11、to Change Future Data Avail abil ity Landscape 33 Discl osure Appendix 39 19 Sept ember 2024 2Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yTable of Cont ent s The following is a redacted version of Goldman Sachs Researchs report“GS SUSTAIN:Nature&Biodiversity:Analysing risks and opportunities throug

12、h a new Nature Data Tool”originally published Aug.29,2024(73pgs).All company references in this note are for illustrative purposes only and should not be interpreted as investment recommendations.Execut ive Summary Nature continues to gain momentum as a focus area for corporate sustainabil ity strat

13、egies,sustainabl e investors,and other stakehol ders.We bel ieve there are five catal ysts for this to continue:Recognition by corporates of the need for Nature-based sol utions to address1.decarbonization efforts,particul arl y as technol ogy-based sol utions continue toscal e.Push by companies tow

14、ards greater efficiencies via use of l and resources,by2.governments to advance economic objectives and by corporates/governments toadvance sustainabl e ambitions.Physical and financial risks of biodiversity l oss and associated impacts to corporate3.operations,suppl y chains and material s sourcing

15、.The need to address biodiversity in the permitting process for corporate projects4.requiring l and devel opment,where insufficient risk management of potentialimpacts coul d l ead to significant del ays or in some cases proj ect cancel l ations.Country-l evel responses to the recentl y-signed Gl ob

16、al Biodiversity Framework,5.which highl ighted the importance of environmental issues outside of cl imate changeto gl obal sustainabl e devel opment.But rising demand to incorporate Nature into sustainabl e investment strategies has,in many cases,outpaced the abil ity of 1)the market to coal esce ar

17、ound a reporting framework,2)organizations to devel op methodol ogies for understanding the financial and physical risks associated with biodiversity l oss,3)companies to measure and discl ose their impacts to nature,and 4)third party data vendors to offer sol utions for investors.We introduce our G

18、S SUSTAIN Nature Tool to measure corporate transparency and performance on four different drivers influencing Biodiversity and Nature outcomes.This represents a starting point ahead of what we expect wil l be increased corporate focus and discl osure.Our anal ysis suggests that whil e nuance is requ

19、ired to understand the symbiotic rel ationships between different drivers of nature change and optimize opportunities for positive impact,significant progress has been made making quantitative anal ysis of corporate nature-rel ated pl ans and performance possibl e today.19 Sept ember 2024 3Goldman S

20、achsGS SUSTAIN:Nat ure&Biodiversit yWhy t his mat t ers for invest ors With a rising gl obal focus on nature and biodiversity,we bel ieve sustainabl e investors wil l l ook to assess companies biodiversity impacts as an indicator of improved business resil ience and reduced risk.We bel ieve the diff

21、erences to risk,earnings and return on capital from heal thy ecosystems vs.disrupted ones is l ikel y to become increasingl y rel evant for companies and investors.We see two areas of increased focus at a minimum for sustainabl e investors but potential l y more broadl y:Physical and financial risks

22、 of potential ecosystem services l osses to corporatenoperations and material s sourcing;andRegul atory,l itigation and cost of capital risks associated with not addressingnnegative impacts of operations,products and services to nature and biodiversity.Measuring corporat e Biodiversit y t ransparenc

23、y and performance In this report,we introduce a framework to hel p measure those risks and anal yse how company strategies,commitments,and environmental performance may increase or decrease those risks and external ities.We frame the assessment of company impacts to nature through five key steps:Sit

24、e/Setting1.Nature importance,state and condition2.Activities of business operations3.Pl an and Transparency to address impacts4.Performance of business impacts to the drivers of nature change(l and-use change,5.cl imate change,pol l ution,and natural resource use and expl oitation).We introduce the

25、GS SUSTAIN Nature Tool to measure steps 3-5.The GS SUSTAIN Nature Tool is a new dataset for investors to assess company exposure to,transparency on,and footprint and performance rel ated to biodiversity and the drivers of nature l oss.This framework incorporates company-reported data,revenue al ignm

26、ent and GS proprietary data.The GS SUSTAIN Nature Tool can hel p provide information on the rel evance of companies business activities to nature through material ity assessments,and on companies biodiversity-rel ated footprints,assessing transparency,performance and pl ans.This can act as a startin

27、g point for investor due dil igence on SNAPP steps 3-5.Where data gaps exist,we highl ight key areas of devel opment,al ternative sol utions and catal ysts for improvement in data avail abil ity moving forward.19 Sept ember 2024 4Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yKey t akeaways from our a

28、nalysis Nature data is scarce,however,where avail abl e it can serve as a useful tool for1.providing context to company anal ysis.Whil e avail abil ity of data is currentl yl imited to measure some drivers of nature change today,weve been abl e to useexisting data to find where companies are earl y

29、l eaders in considering biodiversity inrisk management processes and discl osing exposures.Our GS SUSTAI N Nature toolal so highl ights chal l enges in biodiversity anal ysis,as very few companies havesector-l eading pl ans and performance on rel evant numeric indicators and metricsacross drivers of

30、 nature change.Most companies that rank wel l in the SUSTAI NNature Headl ine Performance and Pl an ranks are thus not sector-rel ative l eaders onall drivers of nature change and instead have areas of strength and other areas forfuture focus to reduce potential negative impacts.We anticipate the da

31、ta for biodiversity to significantl y improve in the years2.ahead driven by pushes for greater l and and material efficiencies,impl ementation ofdecarbonization strategies,biodiversity l oss impacts to material s sourcing,increasedscrutiny on l and devel opment proj ects,and responses to the Gl obal

32、 BiodiversityFramework.Establ ishing a quantitative science-based framework forinvestment and risk management strategies today can provide first moveradvantages to measuring and devel oping product,in our view.As Nature and Biodiversity emerge as a new theme,consensus around3.l eadership remains inc

33、onsistent.Thus,we woul d hesitate to draw strongconcl usions about Natures impact on company val uation,though we may seegreater divergence over time.We do,however,see companies with strongerrel ative Nature Performance for material sectors trade at a modest premium tol aggard peers on 12m fwd EV/EB

34、ITDA,whil e Nature Pl an/Transparency l eaderstrade at a discount to l aggards.We bel ieve this supports the view that the marketis wil l ing to reward favourabl e performance-driven nature outcomes from companiesvs.j ust discl osure al one.On stock performance,Nature Performance l eaders have under

35、performed4.l aggard peers and the MSCI ACWI since the beginning of 2022,with cumul ativeunderperformance of 14%pts and 8%pts respectivel y.This,in our view coul dindicate the potential for discovery val ue for companies with strongperformance-driven outcomes.Leaders in the GS SUSTAIN NaturePl an/Tra

36、nsparency Rank have performed simil arl y vs l aggard peers over thesame period and outperformed the MSCI ACWI,offering sl ightl y higher downsideprotection in 2022 to both Q5 and the ACWI.Whil e we are abl e to anal yse adopters of nature risk management,further5.work is required to systematical l

37、y eval uate Nature Enabl ers,Sol utionsProviders and Revenue Beneficiaries.Water resil iency,l and&agricul turemanagement,the circul ar economy,infrastructure efficiency,technol ogy sol utions,and environmental remediation companies wil l be key to address nature-rel ateddependencies and resul ting

38、risk from ecosystem service disruptions.We profil e 36companies across these themes as revenue beneficiaries and nature enabl ers.19 Sept ember 2024 5Goldman SachsGS SUSTAIN:Nat ure&Biodiversit y19 Sept ember 2024 6Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yWhere invest ors will likely focus,and c

39、ompanies t hat st and out favorably Nat ure&Biodiversit y Adopt ers We bel ieve investors wil l initial l y focus on sectors where potential negative impacts to biodiversity are very high.These incl ude sectors l ike Food&Beverage and Metal s&Mining where there may be concerns regarding deforestatio

40、n,soil and water pol l ution,habitat fragmentation and natural resource consumption.Nat ure&Biodiversit y Enablers Disruption of ecosystem services as a resul t of nature and biodiversity l oss wil l become increasingl y rel evant for companies and investors,in our view.As there is greater focus by

41、both investors and corporates on business resil iency/rel iabil ity,we see increasing focus on the depl oyment of adaptive measures to mitigate both nature and cl imate physical and financial risks.We see potential for investors to reward issuers with increased resil ience pl ans and performance,and

42、 those that are providing adaptive sol utions.We bel ieve water resil iency,l and&agricul ture management,the circul ar economy,infrastructure efficiency,technol ogy sol utions,and environmental remediation companies wil l be key to addressing nature-rel ated dependencies and resul ting risk from ec

43、osystem service disruptions.19 Sept ember 2024 7Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yGS SUSTAIN Nat ure Framework and Relat ive Valuat ion As Nature and Biodiversity emerge as a new theme,consensus around l eadership remains inconsistent.Thus,we woul d hesitate to draw strong concl usions ab

44、out Natures impact on company val uation,though we may expect to see greater divergence over time.Today,modest positive val uation signal s are apparent for our SUSTAIN Nature Performance headl ine rank,with an EV/EBI TDA average premium of 9%for Nature Performance Q1 vs.Q5 between January 2021 and

45、August 2024 and a more modest 3%premium for Nature Performance Q1 vs constituents of the MSCI ACWI with Moderate,High or Very High Nature material ity.Pl an/Transparency,however,shows consistent underperformance for l eaders vs.l aggards in the GS SUSTAI N Nature Pl an headl ine rank,with an average

46、 discount of-29%Q1 vs.Q5 between Jan 2021 and August 2024 and-17%Q1 vs.the MSCI ACWI.Consistent with our views on broader ESG integration and cl imate transition,we bel ieve this supports the view that the market is more wil l ing to reward favorabl e performance-driven outcomes from companies,rathe

47、r than j ust discl osure al one.Why dat a for Nat ure is in earlier st ages vs.Decarbonizat ion A gl obal l imit target for biodiversity l oss has not been widel y recognized and agreed upon,in contrast to the 1.5C warming l imit for climat e change targeted by the Paris Agreement.Simil arl y,a sing

48、ul ar metric through which progress against a gl obal l imit target can be measured is l acking for biodiversity l oss,in contrast to CO2e emissions for climat e change.Progress has been made in the few years through the Gl obal Biodiversity Framework,the Taskforce on Nature-rel ated Financial Discl

49、 osures and other initiatives,but in many cases Sustainabl e investors and companies are l ooking for sol utions whil e stil l working with l ess information about their exposures and potential impl ications than with cl imate.This offers an opportunity for nuance in approaches and strategies for in

50、vestors that can quantify evidence of a science-based approach to understanding and investing in nature,in our view.Exhibit 1:Nat ure Performance leaders consist ent ly t rade at a premium t o laggard peers,and at a slight premium t o MSCI ACWI sect or peers.12m fwd EV/EBITDA&relat ive premium(t rim

51、med mean),Q1-Q5 GS SUSTAIN Nat ure Framework Performance Ranks(for sect ors wit h Moderat e,High or Very High mat erialit y),MSCI ACWI Exhibit 2:.While t he mult iple spread bet ween Nat ure Plan leaders and laggards has been consist ent ly negat ive,wit h Nat ure Plan leaders t rading at a discount

52、 t o bot h laggards and t he MSCI ACWI.12m fwd EV/EBITDA&relat ive premium(t rimmed mean),Q1-Q5 GS SUSTAIN Nat ure Framework Plan Ranks(for sect ors wit h Moderat e,High or Very High mat erialit y),MSCI ACWI rfPe5Qrf Pe4Qrf Pe3Qrf2 PeQrfPe1QWIAC)naemdemmrit%0(1DA TEV/EBIdwfwm21f4-2l uJ4-2yaM4r-2aM4-

53、2naJ3-2vNo3-2pSe3-2l uJ3-2yaM3r-2aM3-2naJ2-2vNo2-2pSe2-2l uJ2-2yaM2r-2aM2-2naJ1-2vNo1-2pSe1-2l uJ1-2yaM1r-2aM1-2naJx61x51x41x31x21x11x019x8x7x naPl5QnaPlQ4 na Pl3Qna Pl2QnaPl1QIACW)naemdemmrit%0(1DA TEV/EBIdwfwm21f4-2l uJ4-2ayM4r-2aM4-2naJ3-2vNo3-2pSe3-2l uJ3-2ayM3r-2aM3-2naJ2-2vNo2-2pSe2-2l uJ2-2ya

54、M2r-2aM2-2naJ1-2vNo1-2pSe1-2l uJ1-2ayM1r-2aM1-2naJx61x51x41x31x21x11x019x8x7xSource:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment ResearchSource:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment Research19 Sept ember 2024 8Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yThe GS SUSTAIN Nat

55、 ure Tool:Measuring Biodiversit y&Nat ure Adopt ers Commentary from companies,conversations with investors,increased offerings from ESG data providers and recentl y defined Biodiversity frameworks point to rising demand to incorporate Biodiversity impact into investment strategies.Whil e we expect t

56、ool s that quantify impact wil l continue to evol ve,investors have opportunities today to gain exposure to biodiversity and nature improvement through identifying companies with robust strategies in pl ace to manage and mitigate risks rel ated to biodiversity impacts.In this section we offer our vi

57、ew of how to eval uate companies risk management strategies and their effectiveness,introduce a data tool to answer some of these questions,and wal k through the current data l andscape for questions where cl ear,concise,comparabl e and easil y accessibl e data does not exist today.Evaluat ing compa

58、nies risk management of biodiversit y impact s In order to assess biodiversity impacts of issuers,we see five SNAPP questions emerging as key to anal ysis:Site l ocation:Where are business activities taking pl ace?1.Nature importance,state and condition:What is the importance of biodiversity2.and na

59、ture in a given l ocation,what species are present,and in what condition is theecosystem vs.pre-human intervention?19 Sept ember 2024 9Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yActivities:I n which business activities is an issuer engaged?How material are each3.of these activities to the issuers

60、revenue?Pl an and Transparency:What pol icies and targets are in pl ace to manage and4.reduce risk for those activities?Does the issuer discl ose data that can hel p measureprogress towards those goal s or demonstrate compl iance with pol icies?Performance:What is the environmental footprint of oper

61、ations for those activities?5.How does an issuer perform on a sector-rel ative basis,especial l y regarding l and use,emissions,pol l ution and resource use?We introduce a new dataset focused on three of these five questions for investors to assess company exposure to,transparency on,and footprint a

62、nd performance rel ated to biodiversity and the drivers of nature l oss.Our framework covers the second part of SNAPP steps for impact assessment,covering:Activities:Material ity assessment of business activities,business sector,and1.revenue where avail abl ePl an:Transparency and Discl osure of qua

63、ntitative metrics,Pol icies and Targets2.rel ated to the drivers of nature l oss or state of naturePerformance:Biodiversity footprint for quantifiabl e data rel ated to the drivers of3.nature l oss(l and use change,cl imate change,pol l ution and resourceuse/expl oitation)al ong with any information

64、 avail abl e on the state of nature,thoughwe note this is particul arl y l imited.The SNAPP framing can hel p quantify impact,but gaps remain today.For the site and setting of business activities,data avail abil ity at an asset or activity l evel is difficul t today,as no companies report geol ocati

65、on data of al l activities and assets throughout the val ue chain and are unl ikel y to do so in the short or medium term,in our view.Conducting anal ysis on the importance,state or condition of nature and biodiversity can be done through ground-up data identifying which and how many species are or

66、have been present somewhere.However,investors need to rel y on third party data for this information,which today is general l y not set up for investor consumption.As a resul t,we do not incl ude these steps in our tool today.The GS SUSTAIN Nature Tool incorporates company-reported data,revenue al i

67、gnment and GS proprietary data.The tool can hel p provide information on the rel evance of companies business activities to nature through impact and dependency material ity assessments,and on companys biodiversity-rel ated footprints,assessing transparency,performance and pl ans.Takeaways from t he

68、 GS SUSTAIN Nat ure Tool As Nature and Biodiversity emerge as a new theme,consensus around l eadership remains inconsistent.Thus,we woul d hesitate to draw strong concl usions about Natures impact on company val uation,though we may expect to see greater divergence over time.Today,modest positive va

69、l uation signal s are apparent for our SUSTAIN Nature Performance headl ine rank,with an EV/EBI TDA average premium of 9%for Nature Performance Q1 vs.Q5 between January 2021 and August 19 Sept ember 2024 10Goldman SachsGS SUSTAIN:Nat ure&Biodiversit y2024 and a modest 3%premium for Nature Performanc

70、e Q1 vs the MSCI ACWI (onl y Moderate,High and Very High material sector constituents)(Exhibit 3).Pl an/Transparency,however,show consistent discounted val uation for l eaders vs.l aggards in the GS SUSTAI N Nature Pl an headl ine rank,with an average discount of-29%Q1 vs.Q5 between Jan 2021 and Aug

71、ust 2024 and-17%Q1 vs.the MSCI ACWI.(Exhibit 4,Exhibit 5).Consistent with our views on broader ESG integration and cl imatetransition,we bel ieve this supports the view that the market is more wil l ing to rewardfavourabl e performance-driven outcomes from companies,rather than j ust discl osureal o

72、ne.Whil e Nature Performance l eaders trade at a premium to l aggards and the ACWI,we note that 1st Quintil e performance companies trade at a sl ight discount to Q3(average performance).This may indicate that l eading performance is not yet being ful l y recognised or rewarded by the market,but rat

73、her that underperformance may be punished.Exhibit 3:Nat ure Performance leaders consist ent ly t rade at a premium t o laggard peers,and at a slight premium t o t he MSCI ACWI.12m fwd EV/EBITDA&relat ive premium(t rimmed mean),Q1-Q5 GS SUSTAIN Nat ure Framework Performance Ranks(for sect ors wit h M

74、oderat e,High or Very High mat erialit y),MSCI ACWI Exhibit 4:.while t he mult iple spread bet ween Nat ure Plan leaders and laggards has been consist ent ly negat ive,wit h Nat ure Plan leaders t rading at a discount t o bot h laggards and t he MSCI ACWI.12m fwd EV/EBITDA&relat ive premium(t rimmed

75、 mean),Q1-Q5 GS SUSTAIN Nat ure Framework Plan Ranks(for sect ors wit h Moderat e,High or Very High mat erialit y),MSCI ACWI rfPe5Qrf Pe4Qrf Pe3Qrf2 PeQrfPe1QWIAC)naemdemmrit%0(1DA TEV/EBIdwfwm21f4-2l uJ4-2yaM4r-2aM4-2naJ3-2vNo3-2pSe3-2l uJ3-2yaM3r-2aM3-2naJ2-2vNo2-2pSe2-2l uJ2-2yaM2r-2aM2-2naJ1-2vN

76、o1-2pSe1-2l uJ1-2yaM1r-2aM1-2naJx61x51x41x31x21x11x019x8x7x naPl5QnaPlQ4 na Pl3Qna Pl2QnaPl1QIACW)naemdemmrit%0(1DA TEV/EBIdwfwm21f4-2l uJ4-2ayM4r-2aM4-2naJ3-2vNo3-2pSe3-2l uJ3-2ayM3r-2aM3-2naJ2-2vNo2-2pSe2-2l uJ2-2yaM2r-2aM2-2naJ1-2vNo1-2pSe1-2l uJ1-2ayM1r-2aM1-2naJx61x51x41x31x21x11x019x8x7xSource

77、:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment ResearchSource:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment Research19 Sept ember 2024 11Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yLooking at stock price performance,however,Nature Performance l eaders have underperformed l aggards

78、 and the MSCI ACWI.Q1 performs worst of Nature Performance quintil es between January 2022 and August 2024,with cumul ative returns of 0%over that time(vs.14%for the 5th quintil e and 8%for the MSCI ACWI).This may reflect difficul ty in identifying l eaders,and coul d offer potential discovery val u

79、e for companies with strong performance-driven outcomes and risk management strategies.For Nature Pl an/Transparency l eaders,l eaders and l aggards have seen simil ar stock price performance over the l ast few years,with l eaders offering sl ightl y more downside protection in 2022 but seeing l imi

80、ted upside in 2023 and 2024 YTD compared to l aggards.Q1 has seen an indexed return difference of 1.5%pts outperformance vs.Q5 between January 2022 and Aug 2024 within sectors with Moderate,High or Very High Nature I mpact material ity.Both Nature Pl an l eaders and l aggards(Q1 and Q5)outperformed

81、MSCI ACWI constituents within those same sectors over the same time period(by 4.8%and 3.3%respectivel y).Exhibit 5:Nat ure Performance leaders t end t o t rade at a premium vs laggards while t he opposit e is t rue of Nat ure Plan/Transparency 12m fwd PE relat ive premium(t rimmed mean),Q1 vs.Q5 SUS

82、TAIN Nat ure Headline Rank,and Q1 vs.MSCI ACWI ACWIs v1 QecnarmrfoPe5 Qs v1 QecnarmrfoPeWI ACs v1 QnaPl5Qsv1QnaPl)eanmed mmtri%(10A Dd EV/EBITfw12m4-2l uJ4-2yaM4ar-2M4-2naJ3-2voN3-2pSe-23l uJ3-2yaM3r-2aM3n-2aJ2-2voN2-2pSe2-2l uJ2-2yaM2r-2aM2-2naJ1-2voN1-2pSe1-2l uJ1-2yaM1r-2aM1-2naJ%02%010%0-1%0-2%-

83、30%0-4Source:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment Research19 Sept ember 2024 12Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yWe see a cl ear preference by ESG investors for greater ownership in companies that tend to perform wel l on our SUSTAIN Nature Performance Rank,with a l ess

84、cl ear rel ationship between ESG ownership and Transparency,for companies with Moderate,High and Very High Material ity(Exhibit 8).Companies scoring in the top Quintil e on our Nature Performance/Pl an ranks on average are+120%/+49%overweight in ESG funds versus their benchmark weighting,respectivel

85、 y vs.-17%underweight and+35%overweight for Q5,respectivel y.Companies that tend to perform wel l on our SUSTAI N Nature Framework al so tend to be sl ightl y l arger than l aggards(Exhibit 9).GS SUSTAIN Nat ure Tool Met hodology:Met rics included The GS SUSTAIN Nature Framework creates two Headline

86、 Nature Ranks:Plan and Performance.These are based on companies nature pl ans(strategy&transparency)and nature performance(corporate footprints on rel evant indicators).The Pl an score is in pl ace due to l ow corporate discl osure on many metrics,where companies today cannot Exhibit 6:Companies sco

87、ring best on Nat ure Performance have underperformed laggard peers and MSCI ACWI const it uent s wit hin similar sect ors over t he last couple years Indexed st ock price performance,SUSTAIN Nat ure Performance(t rimmed mean quint iles),vs MSCI ACWI sect or-peers Exhibit 7:While Nat ure Plan/Transpa

88、rency leaders have performed inconsist ent ly vs laggards,and bot h Performance leaders and laggards have out performed t he MSCI ACWI Indexed st ock price performance,SUSTAIN Nat ure Performance(t rimmed mean quint iles),vs MSCI ACWI sect or-peers 13%:CWIA17%:5Q8%8%:1 1QsnrQR tRetuD DT TY Y246%:ICW

89、A6%Q5:5%Q1:rnsuRet6%-:ICWA4%-:5Q8%-:1QrnsuRetWIACecnarmofoPeQ5 rfecnarmofoPe4Qrfecnarmorf Pe3QecnarmofoPeQ2 rfecnarmofoPe1Qrfsrntu redexedIn031521021511011501001959085803%2022 2023 13%13%:I ICWCWA18%:5QA14%14%:1 1QrnsQuRetR tD DT TY Y24246%:ICWA8%:5Q7%:1QrnsuRet6%-WI:CA5%-:5Q4%-:1QnsrRetu22IACWnaPl5

90、QnaPl4Qna Pl3Qna Pl2Qna Pl1QsrnutredexednI52102151101150100195908580%202023 Source:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment ResearchSource:FactSet,Bloomberg,LSEG,Goldman Sachs Global Investment ResearchExhibit 8:ESG invest ors are more overweight Nat ure Performance leaders,while owner

91、ship is less consist ent on Nat ure Plan Average global ESG fund relat ive weight ing of companies wit hin each respect ive ranking Quint ile,MSCI ACWI universe Exhibit 9:Top quint ile companies t end t o be slight ly larger,t hough t his bias is more subdued for Performance rankings Average market

92、cap(USD$bn)of companies wit hin each respect ing ranking Quint ile(Q1 best),MSCI ACWI universe )172N=rf(Pe)53=2Nn(Pla)14=2Nrf(Pe)44=2Nn(Pla)04N=2rf(Pe1)N=24n(Pla43)=2N(Perf)44N=2n(Pla)24=2Nrf(Pe)55=2Nn(Plak RanencarmPerfon RankPlasdnufESGn i thg i eWev i ta lReQ5Q4Q3Q2Q1%0210%10%08%06%04%020%-20%-40

93、 71)=2N(Perf)3 35 5N=2N=2n na a(Pl)14N=2rf(Pe(Pl44)44)=2=2N Nn na a(Pl40)=2N(Perf(Pl)1 14 4N=2N=2n na a(Pl)34N=2rf(Pe(Pl44)44)=2=2N Nn na a(Pl)24N=2rf(Pe(Pl)5 55 5=2=2N N(PlanknRaecnarmorfPeknRanaPlsdn fuESGn i t hg i eWevtia l eRQ5Q4Q3Q2Q1403530252015105N0(PlanSource:Morningstar,LSEG,Goldman Sachs

94、Global Investment ResearchSource:LSEG,Goldman Sachs Global Investment Research19 Sept ember 2024 13Goldman SachsGS SUSTAIN:Nat ure&Biodiversit ybe sufficientl y assessed on comparabl e performance vs sector peers.This l ed us to reward earl y-movers on discl osure where we typical l y woul d l ook t

95、o assess numeric,quantifiabl e data and reward outperformance.The framework establ ishes the infrastructure for assessment so that increases in discl osure can l ead to new data being immediatel y incorporated into the Performance score as that data becomes avail abl e.For both Pl an and Performance

96、 ranks,five sector-relative sub-scores are created for every company:1)Land Use,2)Cl imate Change,3)Pol l ution,4)Resource Use and 5)Other:State of Nature.Each of these sub-scores are then weighted based on materiality to the sector in order to create Headl ine Nature Pl an and Nature Performance se

97、ctor-rel ative rankings.Bel ow,we outl ine every metric that is incl uded in the Driver Sub-Scores,al ong with outl ining potential points associated with each metric.19 Sept ember 2024 14Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yExhibit 10:The GS SUSTAIN Nat ure Tool aims t o ident ify companies

98、 engaged on addressing nat ure-relat ed risks and impact s Met rics and met hodology for our GS SUSTAIN Nat ure Tool DriverGS SUSTAIN Framework MetricsPlanPerformance1)Land Disturbed0 or 1-2 to 22)Land Restored0 or 1-2 to 23)%Land Restored0 or 1-2 to 24)Exposure to Environmentally Sensitive Areas0 o

99、r 1-2 to 25)Land Protected or Conserved0 or 1-2 to 26)Third-Party Certified Forestland0 or 1-2 to 27)Zero deforestation or no conversion/degradation policy-1,0,18)Deforestation-free supply chain target with target year0 to 19)Impact reduction policy for land-0.5 to.5GS SUSTAIN Land Use Change RanksM

100、ax pts possible:8.5Max pts achieved:4Max pts possible:12Max pts achieved:61)Ambition0 to+0.52)Targets0 to+13)Emissions Performance-0.5 to+0.5 for financials-3 to+3 for non-financials;-5 to+5 for financials4)Emissions Data Disclosure&Validation0 to+2.55)Decarbonisation Strategy0 to+26)Capital Allocat

101、ion Alignment0 to+17)Climate Policy Engagement-1 to+18)Climate Governance0 to+1.59)Climate risk and accounts0 to+2.510)Just Transition-0.5 to+.5GS SUSTAIN Climate Change RanksMax pts possible:10Max pts achieved:8Max pts possible:8Max pts achieved:51)Air Pollutants:SOx&NOx,VOC,PM emissions0 to 3-6 to

102、+62)Air Pollutants:SOx&NOx,VOC Emissions reduction policies-1 to+13)Soil Pollutants:Organic waste disclosure0 or 14)Soil Pollutants:Nitrogen,phosphorous discharges0 to 2-4 to+45)Waste:Total waste,waste recycling,hazardous waste,spills0 to 4-8 to+86)Waste:Toxic chemicals reduction policy-0.5 to 0.57)

103、Water Pollutants:Water discharged,discharges to water0 to 2-4 to+48)Water Pollutants:Wastewater management policy-0.5 to 0.5GS SUSTAIN Pollution RanksMax pts possible:14Max pts achieved:12Max pts possible:22Max pts achieved:161)Water:Withdrawal,recycling,freshwater use,%stress exposure0 to 4-8 to+82

104、)Water Efficiency Targets-0.5 to 0.53)Fossil Fuels and Energy:purchased biomass,fossil fuels0 to 24)Fossil Fuels and Energy:Energy usage0 or 1-2 to+25)Commodity and Materials sourcing:sustainable commodities0 to 66)Raw materials sustainably sourced or certified0 or 1-2 to+27)Supply chain auditing0 o

105、r 1-2 to+28)Materials sourcing policy-0.5 to 0.59)ESG risks discussed in materials sourcing-0.5 to 0.510)Environmental criteria used in supplier selection or termination-1 to+1GS SUSTAIN Resource Use RanksMax pts possible:17.5Max pts achieved:13Max pts possible:14Max pts achieved:101)No net loss or

106、net nature positive commitment,or NDPE policy-0.5 to+0.52)NDPE policy-0.5 to+0.53)Biodiversity Impact reduction policy-0.5 to+0.54)Indicators to measure biodiversity impact-0.5 to+0.55)Project E&S Assessment-0.5 to+0.56)TNFD Early Adopter0,0.5 or 17)Number of IUCN Red List Species affected by operat

107、ions0 to+1GS SUSTAIN Other State of Nature RankMax pts possible:4.5Max pts achieved:3.5GS SUSTAIN Nature Performance ScoreTakes each of the five sub-score percentile ranks for Performance,multiplies the values by their respective materiality score(between 0 and 1),and sums the result.The potential r

108、ange is thus dependent on the different materiality values and varies by sector.We then percentile rank the companys headline score against sector peers in the MSCI ACWI.1)Land Use Change2)Climate Change:See GS Climate Transition Tool3)Pollution4)Resource Use5)State of NatureGS SUSTAIN Nature Plan/T

109、ransparency ScoreTakes each of the five sub-score percentile ranks for Plan/Transparency,multiplies the values by their respective materiality score(between 0 and 1),and sums the result.The potential range is thus dependent on the different materiality values and varies by sector.We then percentile

110、rank the companys headline score against sector peers in the MSCI ACWI.Note:Scores are calculated at a Driver level,with a Headline score weighted based on impact materiality of each driver,so the points value is not consistent across sectors in the Headline Nature Scores Source:Bloomberg,Refinitiv

111、Eikon,TNFD,Goldman Sachs Global Investment Research19 Sept ember 2024 15Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yWe pr esent t his dat aset as a st ar t ing point for invest or due diligence and,as such,it should not be consider ed a final view on t he over all qualit y of a companys r isk manag

112、ement of or posit ive cont r ibut ions t o biodiver sit y and nat ur e.The GS SUSTAIN Nat ur e Tool is t her efor e pr esent ed as an init ial scr een for fur t her invest or engagement and bot t om-up analysis.Dat a availabilit y for biodiver sit y and nat ur e is immat ur e and not as r obust or s

113、t andar dized as car bon emissions or ot her climat e dat a,so limit at ions in cover age may exist.The tool hel ps provide for context for why biodiversity impact anal ysis is difficul t today,as very few companies are both transparent and have sector-l eading performance on rel evant numeric indic

114、ators and metrics.A screen that l ooks at companies in the top 50%il e(sector-rel ative)for overal l Nature Pl an and Nature Performance whil e fil tering out companies that are in the bottom quintil e on any singl e driver of nature l oss(Pl an and Performance)yiel ds onl y 6 companies(out of a uni

115、verse of 4,602 companies with greater than“Very Low”material ity).I f we excl ude requiring a Land Use Performance rank,that number of companies increases to 110,but remains l ow compared to the universe.Most companies that rank wel l in our overal l Nature Headl ine Performance and Pl an ranks are

116、thus not sector-rel ative l eaders on al l drivers of nature change and instead have areas of Exhibit 11:Summary of how our Plan and Performance final percent iles are calculat ed St epped t hrough t heoret ical example for a Paper&Packaging company,t ranslat ing from point s t o percent ile,incorpo

117、rat ing mat erialit y weight ings t o find final ranking percent ile Source:Goldman Sachs Global Investment Research19 Sept ember 2024 16Goldman SachsGS SUSTAIN:Nat ure&Biodiversit ystrength and other areas for future focus to reduce potential negative impacts.Bel ow we wal k through each step of th

118、e Nature Framework in greater detail,highl ighting the importance for incl usion,how we l ook at quantification,and takeaways or concl usions we can draw at a step-l evel.Act ivit ies:Which business act ivit ies have t he highest risks associat ed wit h pot ent ial negat ive impact s t o biodiversit

119、 y and nat ure?How mat erial are t hese act ivit ies t o an issuers revenue?Material ity hel ps determine the l evel of potential exposure to risk,the l evel of real economy impact changes to operational and business practices can have,and the importance for incl usion of a ful l biodiversity risk a

120、ssessment when anal ysing companies in a portfol io.For nature,a number of sources have identified key sectors with outsized impacts to nature,incl uding Food&Agricul ture;Oil&Gas;Metal s&Mining;Chemical s;Biotechnol ogy&Pharmaceutical s;Forestry&Paper;El ectric Util ities&Power Generators;Aquacul t

121、ure;and Financial Institutions.For each of these sectors,TNFD has rel eased additional sector-specific guidance towards discl osure to ensure impacts can be better assessed by investors and other stakehol ders.We offer our view on material ity bel ow,using median and mean company-reported data,TNFDs

122、 sector-specific guidance,the EUs Deforestation-free regul ation(EUDR),the Sustainabil ity Accounting Standards Board(SASB),suppl y chain mapping and ENCORE as guidance.See the Appendix for additional detail behind determining exposure l evel s.In our new Nature dataset,we use materiality at a secto

123、r-level to determine which companies are assessed and which metrics are used to assess a companys strategy,disclosures and performance on biodiversity impact.Exhibit 12:Mat erialit y map:pot ent ial sect or exposure t o drivers of nat ure change Darker blue indicat es higher pot ent ial impact s Lan

124、d Use ChangeClimate ChangePollutionResource UseLand Use ChangeClimate ChangePollutionResource UseOil&Gas Producers1111Real Estate1000Mining&Metals1011Restaurants0000Steel0111Retail-Staples0000Construction Materials1111Hospitality0000Paper&Packaging1011Healthcare Services0000Chemicals1011Gaming0000Oi

125、l Refiners0011Retail-Multiline&Specialty0000Utilities-Multi1111Brands1001Utilities-Electric1110Aerospace&Defense0010Utilities-Gas0011Pharma&Biotech0010Utilities-Water0001Semiconductors0000Tech Hardware0000Food,Beverage,Agriculture1011Med Tech0000Alcohol&Tobacco1001Capital Goods0010Insurance0000Autom

126、obile Manufacturers0010Banks0000Auto Parts0011Diversified Financials0000Household&Personal Care0000Financial Exchanges&Data0000Consumer Durables0000Asset Management0000Oil&Gas Midstream0111Telecom Services0000Marine Shipping0110Distributors0000Engineering&Construction1011E-Commerce0000Airlines0110Me

127、dia0000Transport Infrastructure0010Professional Services0000Logistics&Shipping0000Internet0000Multi-industry Services0010IT Services0000Oil Services0010Software0000Basic ResourcesUtilitiesFinancialsBusiness&Consumer Services Real Estate CentricIP&DesignManufac-turingIndustrial Services*indicates sec

128、tors we view as having potential material impacts on nature and biodiversity Source:Goldman Sachs Global Investment Research,Bloomberg,Refinitiv Eikon,ENCORE,TNFD,SASB,EUDR19 Sept ember 2024 17Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yOut of 52 sectors,we view 36 as having potential material impa

129、cts on biodiversity based on exposure to l and use change,cl imate change,pol l ution and natural resource use.Sectors with the highest potential risk exposures overal l incl ude:Food,Beverage&Agricul ture,Paper&Packaging,Construction Material s,Oil&Gas,Mining&Metal s,Steel and Mul ti-Util ities.We

130、view financial institutions separatel y,with few direct impacts but exposure based on financing activities of other industries.Due to l imited data avail abil ity,we do not assess financial institutions today.Within focus sectors,detail ed revenue segmentation can hel p investors understand business

131、 exposure to specific activities with varying l evel s of risk exposure.For exampl e,soy and cattl e may have higher exposure to deforestation vs.other crops and agricul tural activity such as corn or poul try.Simil arl y,copper mining in Chil e faces different exposures to environmental and social

132、risks compared to cobal t in the Democratic Republ ic of the Congo.We consider detail ed revenue mapping in our Resource Use Material ity assessment,but we use the company-l evel resul ts to determine an overal l sector-l evel resource use material ity score,rather than company-l evel in order to re

133、main consistent between material ity cal cul ations for different drivers of nature change.This is an area for potential future focus as granul ar revenue segmentation and data for material ity mapping increase in avail abil ity.Plan:What policies and t arget s are in place t o manage and reduce ris

134、k of business act ivit y impact s on nat ure,and how t ransparent is t he company t owards measuring impact and progress against t arget s?Here we introduce the GS SUSTAIN Nature Pl an Rank,one el ement incl uded in the new Nature Framework dataset.Companies that perform wel l on Nature Pl an repres

135、ent earl y movers in incorporating biodiversity into strategy and reporting.Discl osure rates are exceptional l y l ow for many biodiversity-rel ated metrics,so transparency on metrics is currentl y differentiating.Overal l discl osure rates of metrics for the MSCI ACWI shows sharp contrast in discl

136、 osure rates for different drivers of nature l oss,with higher discl osure for cl imate change,pol l ution and water&energy within resource use.Discl osure gaps are most meaningful for l and use and resource use outside of water and energy.19 Sept ember 2024 18Goldman SachsGS SUSTAIN:Nat ure&Biodive

137、rsit yExhibit 13:Disclosure rat es for different drivers of nat ure change reveal companies are more t ransparent on met rics relat ed t o CO2 emissions,wast e,energy and wat er while t hey are not as t ransparent on land use,air and soil pollut ant s,commodit y consumpt ion and met rics relat ed t

138、o species Disclosure rat es of numeric met rics,policies and t arget s for biodiversit y-relat ed met rics,MSCI ACWI Source:Bloomberg,LSEG,TNFD,Goldman Sachs Global Investment Research19 Sept ember 2024 19Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yThis score considers discl osure of rel evant nume

139、ric metrics,the existence of pol icies for improvement,and commitments(no net l oss,zero deforestation,TNFD earl y adopters,etc.)A detail ed breakdown of metrics and associated points can be found above(Exhibit 10).A Pl an/Transparency score is cal cul ated for each driver of nature change,and to ge

140、t to an overal l score,a material ity mul tipl e is appl ied(from 0 to 1)depending on impact material ity l evel s from very l ow to very high.The final%il e rank is cal cul ated at a sector-rel ative l evel.For more detail,see Exhibit 11.19 Sept ember 2024 20Goldman SachsGS SUSTAIN:Nat ure&Biodiver

141、sit yPerformance:What is t he environment al foot print of operat ions of business act ivit ies?How does t he issuer perform vs.peers on met rics relat ed t o biodiversit y and nat ure and drivers of nat ure loss?Outside of understanding company discl osure,pl ans and commitments,anal ysing the envi

142、ronmental footprint of business operations is important to determine whether companies are meaningful l y making progress towards commitments rel ated to nature.The GS SUSTAIN Nature introduces a Performance Score to act as one step to hel p anal yse company exposure to biodiversity risk management

143、and contributions.We pr esent t his dat a set as a st ar t ing point for invest or due diligence and,as such,it should not be consider ed a final view on t he over all qualit y of a companys impact s on biodiver sit y.The GS SUSTAIN Nat ur e Fr amewor k is pr esent ed as an init ial scr een for fur

144、t her invest or engagement and bot t om-up analysis.Dat a availabilit y for t he Biodiver sit y is not as r obust nor as st andar dised as car bon emissions dat a,so limit at ions in cover age may exist.This score considers performance against rel evant numeric metrics for l and use change,cl imate

145、change,pol l ution and resource use.I t al so incorporates overal l biodiversity commitments incl uding TNFD adoption,reporting I UCN Red List species,net nature positive commitments,etc.A detail ed breakdown of metrics and associated points can be found above(Exhibit 10).The Performance score is ca

146、l cul ated for each driver of nature change,after which a material ity mul tipl e is appl ied(from 0 to 1)depending on impact material l evel s from very l ow to very high in order to determine an overal l headl ine score.The final%il e rank is cal cul ated at a sector-rel ative l evel,with an envir

147、onmental controversies adj ustment to the final score where rel evant.For more detail,see Exhibit 11.19 Sept ember 2024 21Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yNat ure posit ive:What is it?Nature positive is a gl obal goal to hal t and reverse biodiversity l oss by 2030 to a 2020 basel ine,fo

148、l l owed by continued recovery in order to achieve ful l recovery of nature by 2050.Nature positive by 2030 seeks to provide paral l el guidel ines for biodiversity that have been l ong-establ ished for cl imate:achieving net zero and a 1.5 scenario.The Nature Positive I nitiative draws on expertise

149、 from 28 core stewardship group organizations to create common l anguage for measuring contributions and progress towards the nature-positive goal.This can be organized into three categories:1)species,2)ecosystems and 3)natural processes,which each have sub-indicators to frame measurement and perfor

150、mance.Business activities can be exposed to al l of these indicators,so contributing to gl obal nature-positive goal s or targeting nature positive as an organization requires performance metrics that address al l material el ements.Ful l guidance is stil l in devel opment,and there are no initiativ

151、es that currentl y verify company cl aims or targets to be nature positive.I n the absence of a singul ar,science-backed l ist of reporting metrics,corporates and investors can report material metrics that contribute to these indicators,with increased transparency required into methodol ogy,process

152、and discl osure to increase credibil ity and reduce risk of cl aims of greenwashing.Nature positive is al ready incorporated into regul ation in some areas,with the UK requiring a 10%net gain in biodiversity for devel opment proj ects,based on the governments biodiversity metric tool and standardize

153、d biodiversity units for three categories(area units,hedgerow and watercourse)which use size,type,condition,distinctiveness,strategic significance,difficul ty of creation or enhancement,and distance from habitat l oss,amongst others,to determine the number of units for a proj ect.To assess ecosystem

154、 condition,the UK has condition assessment criteria for 25 different types of habitats to be assessed by a competent ecol ogist.These criteria l ook at extent,abundance and diversity of flora species and ecosystems,and material natural processes for most ecosystem types.Exhibit 14:Framing nat ure po

155、sit ive SpeciesEcosystemsNatural ProcessesExtent and abundance of speciesExtent of habitatHydrological integrityExtinction risk of speciesEcological integrity of the habitatSediment transport and integrity of estuariesGenetic diversityFunction of species in their ecosystemsMigration patternsCarbon s

156、equestration and storageIntegrity of tidal zonesNatural fire regimesVegetative cover that supports rainfall patternsSource:Nature Positive Initiative19 Sept ember 2024 22Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yMoving beyond managing risk:Ident ifying Biodiversit y&Nat ure Enablers Disruption of

157、 ecosystem services as a resul t of nature and biodiversity l oss wil l become increasingl y rel evant for companies and investors in our view,even under various scenarios of pol icy ambition/action to protect and conserve nature.As there is greater focus by both investors and corporates on business

158、 resil iency/rel iabil ity,we see increasing focus on the depl oyment of adaptive measures to mitigate both nature and cl imate physical and financial risks.We see potential for investors to reward issuers with increased resil ience pl ans and performance,and those that are providing adaptive sol ut

159、ions.The GS SUSTAIN Nature data tool attempts to begin quantifying biodiversity impact risk management.This is separate from resil iency strategies that address operating under various scenarios of biodiversity l oss and from companies that are providing adaptation sol utions.Thus,in this section we

160、 expl ore areas where data is l ess avail abl e and sophisticated,and l ook at identifying business model s manual l y.Adapt at ion and resiliency solut ions:Helping reduce risks associat ed wit h ecosyst em degradat ion and nat ure loss Humans depend on nature and its services to a moderate or high

161、 degree for more than hal f of the worl ds GDP($44-$58 tril l ion),according to the Worl d Economic Forum.Changes to biodiversity thus impact sustainabl e devel opment capacity.We see a growing recognition that the l oss of biodiversity and ecosystem services presents systemic risks to human wel l-b

162、eing,sustainabil ity goal s,and economic growth and stabil ity.We bel ieve investors and companies may pay increased attention to nature-rel ated risks that impact their own resil iency or the resil iency of their portfol ios.I n order to understand,quantify and address business rel iance on natures

163、 services,we bel ieve investors may begin to reward companies that buil d increased resil ience and companies that hel p provide resil iency sol utions.19 Sept ember 2024 23Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yOutside of seeking to be rewarded by sustainabl e investors for nature-rel ated in

164、itiatives,we bel ieve companies wil l increasingl y l ook at the return on investment of conservation projects to ensure nature-rel ated sustainabil ity strategies are rel evant and additive to overal l business strategy.This was reflected in a survey l ooking at drivers behind natural capital inves

165、tment,where over 40%of respondents cited l ong-term profit opportunities as a main driver of current and future investment in natural capital,second onl y to resil ience against cl imate change(Exhibit 18).Whil e cost-benefit ratios of biodiversity proj ects can vary widel y,based on a number of l o

166、cation-specific factors,each dol l ar invested in biodiversity may yiel d up to$30 in net societal benefits(Camel o et al.,2017)(Exhibit 17).I n addition,when l ooking at profitabil ity and more direct return on investment,some conservation efforts in agricul ture have yiel ded positive resul ts on

167、gross and net return(Exhibit 19).Exhibit 15:Ecosyst em services provided by nat ure and biodiversit y can be direct ly linked t o financial value,which is at risk in a scenario of severe ecosyst em degradat ion Nat ure Value at Risk for 5 ecosyst em services across six sect ors(agricult ure,manufact

168、 uring,services,elect ricit y and ut ilit ies,mining,t ransport),95t h percent ile(5%annual probabilit y)and 99t h percent ile(1%annual probabilit y)for direct operat ions Exhibit 16:Biodiversit y int act ness is likely t o cont inue t o decline under a business as usual scenario,and even ambit ious

169、 climat e and nat ure policy forecast ed scenarios may not achieve t he Rio Convent ion t arget t o ret urn biodiversit y t o 1970 levels Biodiversit y Int act ness under different pot ent ial scenarios(assesses abundance of nat ive species present vs.expect at ions wit hout human int ervent ion)ns

170、bREUnt,eevr0 yn 21 irDPG%,tnever y001n i1PDGf o%t,never y0 2n i1rfksritaDP G%snbEUR,ksRitaeu lVareutNatyi l aur QetWay t liAir Quano i tan i l lPorte WaecrfaSur watednuroG%81%61%41%21%018%6%4%2%0%0009000800070006000500040003000200010 l aususassen i sBuryot ce j trayc i l ot psacreForeutan+orianecsyc

171、 i l opt sacreoForianec sdeng i l-atsergtao iRs l eve ly t irsev i do i b0002s l eve ltyirsev i do i b07910502540204023520030252020202510201025002002040.80.8069.7029.7088.7048.70Two baseline distributions are used:for agriculture this is calibrated on agriculture output variability across all countr

172、ies,for non-ag,this is calibrated on averages of industry and services output variability Source:Network of Central Banks and Supervisors for Greening the Financial System(NGFS)Source:The Natural History Museum,PRI,UN Environment Programme,Global Canopy,The Economics of Land DegradationExhibit 17:Be

173、nefit-cost rat ios of biodiversit y conservat ion and rest orat ion project s vary dramat ically,depending on local considerat ions,but many show benefit s exceeding cost s Benefit/cost rat ios ident ified in a variet y of conservat ion and rest orat ion st udies o i ranecsetartnuocisdl iacoswo l,s

174、t serofdedargedahmn053ginrot seRgvaerveseRsuonigednIergaL&t sreFouyacarabMingt cennocrsod irroCesl im6,nai l oarChtorNn ioniatortesrrianripaorfo i trat soc/t i fneeBtesorfedadgrdeofesart che0mn g 35inortesRrya/h/onto 1 try/ha/sont17touabomr festaronioserSUngiortesRlesim2,inalroaChrtoNin no i traot s

175、ernriaaripr ofio trat soc/it feneBrioanecsionsnapxesareAt cetorPerinaMervesrePott cetroPioranecsno i snapxesaerAdet cetorPineraM dnapxeotysaEsodgoicblpuofuealvngdilucex,s tesorfd deagrdeha0mn g 35inortesRiornaecn sionspaexsearAedtotecre PinarMe tgai ito MttotecrPiasenodnI,met sysoEcresueLn iiosranec

176、siontat serofedsviontavresnoC302520151050Source:Beukering et al.(2003),Brander et al.(2020),Naja et al.(2017),Holmes et al.(2004),Pimental et al.(1995),Naidoo and Ricketts(2006),Camelo et al.(2017),Data compiled by Goldman Sachs Global Investment Research19 Sept ember 2024 24Goldman SachsGS SUSTAIN:

177、Nat ure&Biodiversit yOutside of direct nature conservation and remediation projects,we al so see room for increased focus on investment in adaptation sol utions for infrastructure,rel iabil ity and resil iency,consumption efficiency,heal th and education.I nvestment needed to protect and conserve bi

178、odiversity and counteract the impacts of nature l oss is$0.7-$1.0 tril l ion annual l y,according to the Paul son I nstitute.Current funding comes predominantl y from governments,but we expect this to change over the next decade,as corporations and investors recognize the intrinsic l inks between bi

179、odiversity protection,cl imate change and other environmental obj ectives required for sustainabl e growth.With private biodiversity financing today sitting at around$35 bil l ion,significant opportunity exists to real ign capital flows towards nature sol utions,remediation and conservation efforts

180、where cost-effective.We see paral l el s between the investment and measures taken to address impacts of rising temperature and those taken to address impacts of disrupted ecosystem services.For more on adaptation rel ated to cl imate risk,see GS SUSTAIN:Adapt at ion:Physical r isk,Financial r isk,O

181、ppor t unit y.Exhibit 18:Resilience against climat e change and long-t erm profit opport unit ies are key drivers of invest ment in nat ure and biodiversit y%of survey respondent s t hat ident ified drivers of current and fut ure invest ment in nat ural capit al by asset owners and managers Exhibit

182、19:Profit abilit y of on-farm conservat ion varies based on crops and conservat ion pract ices Tot al ROI per acre(gross and net expenses and fees)for 10 farms employing conservat ion pract ices over four years vs.benchmark farms enghace tami l ct sinagaecnliei seR)merg tonl(esi t iunt rpoopt iofrPd

183、anmdeteni lCy tiliibsnopseRliaocSeatorporCno i tatupeRegatnavdarevom-lyraEsniotlaugergintaipictnAerhtO)mrett rohs(esi t iunt rpoopt iofrP%06%05%04%03%02%010%re)c/a($sectiacprn o iatervson cthwi.s varkmhcnbe,rntureNet)rec/a($escticra pontiaervnso chwit.s varkhmncbe,urnt resrosnaGbySoega l lSirnoen ir

184、aCGrnCoaf l afAl%052%002%051%001%050%-500%-100%-15GSource:The Nature Conservancy,Environmental FinanceConservation practices include contour strip cropping,cover crops,filter strips,grassed waterways and sediment control basins Source:Headwaters Agriculture Sustainability Partnership,Goldman Sachs G

185、lobal Investment Research19 Sept ember 2024 25Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yWe bel ieve water resil iency,l and&agricul ture management,the circul ar economy,infrastructure efficiency,technol ogy sol utions,and environmental remediation companies wil l be key to address nature-rel ate

186、d dependencies and resul ting risk from ecosystem service disruptions.Water Resil iency:Ensuring a sustainabl e suppl y of avail abl e freshwater is important for human heal th and devel opment outcomes,and avail abil ity of water has been l inked to vegetation resil ience,improving biodiversity out

187、comes.Sol utions incl ude water use efficiency,water resource management,sustainabl e urban water management,water storage,water transport,l eakage mitigation infrastructure,l iquid purification,fil tration equipment/agents,water util ities and wastewater treatment.We bel ieve efforts to restore and

188、 conserve nature wil l drive investments and investment opportunity in the Water Transition as governments,corporates and consumers add infrastructure,storage,modernization and procurement and sanitation sol utions to ensure water rel iabil ity/qual ity and mitigate the risks of excess water from fl

189、oods and insufficient water from droughts.Land&Agricul ture Management:I mproved cropl and management,efficient l ivestock systems,regenerative agricul ture practices and other practices that increase l and use efficiency hel p improve growing conditions through improved soil heal th and pol l inati

190、on,reduced need for insecticides,pesticides and fertil izers that can disrupt l ocal water systems,and improved efficiency to reduce agricul tural l and use change associated with deforestation.Circul ar Economy:A circul ar economy with increased material efficiency and reduced virgin resource extra

191、ction is imperative to achieve net zero decarbonization and biodiversity goal s.Circul ar sol utions across the 10 Rs(Refuse,Rethink,Reduce,Reuse,Exhibit 20:There is a significant gap bet ween global biodiversit y financing t oday and what is needed,but t he gap pales in comparison t o net-zero fund

192、ing needs or exist ing funding t owards subsidies t hat can pot ent ially damage t he environment Global biodiversit y financing t oday,what is needed t o achieve nat ure posit ive goals,what is needed t o achieve net-zero,vs what is spent t oday on subsidies t hat may harm t he environment,USD$bns

193、Fuelsl i ssFotrysFore:cPublis l atrisudInseti i l tiUsalriateMyrgeEntetaEsl aeRremusnoChc+tearethcleaH:ateivPtn.56tn.76tn1-.70bn6 16-s tes f ffoy t irsev i doBiferut crut srafn i lrautNas t cudropl a i cnan i fnGreeyc i l o pax tnd asetdgbuc i tesDoms terkamnorbacdnasno i tu l osdesa-breutNasn i ahc

194、y l ppuse l ban i at sSusONGn o iatervson cnd ayphrotanl iPhrmoforeyd i sbSuPrsnb$USD gndinfuse i d i sbusl ufrmah.vEnsdee ngn i dnfuroet-zeNsednegn i dnufy t irsev i do i bl abGlogn i cnan i fy t i srev i do i bl abGlo0007000600050040003000200001reth0sessecropl euf l iessorewtyi l i boF FMPosOf$120

195、$Source:BloombergNEF,Paulson Institute,United Nations Environment Programme,Data compiled by Goldman Sachs Global Investment Research19 Sept ember 2024 26Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yRepair,Refurbish,Remanufacture,Repurpose,Recycl e,Recover)can hel p reduce primary demand for critica

196、l material s that may face a forthcoming crunch driven by the combined depl oyment of material-intensive,l ow-carbon technol ogies,and anticipated suppl y shortfal l s over the coming decade.Infrastructure and Material Efficiency:I mproved material efficiency reduces l and use change and resource ex

197、pl oitation associated with virgin resource extraction.Biosol utions and Efficiency Sol utions:Nature-based enzymes and microbes can repl ace fossil-based or synthetic chemical s in some circumstances,resul ting in reduced emissions in industry and food systems,increased material efficiency and redu

198、ced pol l ution.Technol ogy Sol utions:Technol ogy sol utions for earth observation can hel p track deforestation in real time to understand where increased focus is required to prevent l and use change.These sol utions hel p enabl e companies to better understand their suppl y chain exposures.Envir

199、onmental Remediation:Direct environmental remediation can improve ecosystem heal th by carrying out nature positive action pl ans that rehabil itate ecosystems and improve their functioning.19 Sept ember 2024 27Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yWhat sust ainable invest ors may look t o as

200、sess but where disclosure remains limit ed Amongst the five SNAPP steps emerging as key to nature impact anal ysis(Site l ocation,Nature importance,state and condition,Activities,Pl an,and Performance),gaps remain.Answering each of the SNAPP questions requires different data,each of which have varyi

201、ng l evel s of avail abil ity and usabil ity today.Anal ysis requires:Data on business activities,where currentl y there is the best avail abil ity throughndetail ed revenue segmentation(though revenue breakdown may not perfectl yreflect business activity,depending on pricing).Detail ed geol ocation

202、 data of business activities(either shapes on a map or l atitudenand l ongitude coordinates),which is not avail abl e through company-reported datatoday and in most cases rel ies on a number of assumptions and estimates.Detail ed assessments of nature in various l ocations,where data from academicna

203、nd scientific sources continues to improve and become more accessibl e;Company-reported data on operational footprint rel ated to the dive drivers ofnnature change,pol icies and targets,which are l argel y avail abl e from third-party datavendors but has general l y l ow discl osure rates by compani

204、es;Detail ed suppl y chain data from companies,which is not robust today but whichnshoul d improve upon the impl ementation of the EUs Deforestation-free Regul ation(EUDR).Gaps remain for many of these different data today.For the site and setting of business activities,data avail abil ity at an ass

205、et or activity l evel is difficul t today,as no companies report geol ocation data of al l activities and assets throughout the val ue chain and are unl ikel y to do so in the short or medium term,in our view.Conducting anal ysis on the importance,state or condition of nature and biodiversity can be

206、 done through ground-up data identifying which and how many species are or have been present somewhere.However,investors need to rel y on third party data for this information,which today is general l y not set up for investor consumption.We do not incl ude Site or Nature importance,state and condit

207、ion in our tool today,but bel ow we wal k through the importance of these steps in a compl ete anal ysis of company impact to nature and biodiversity,l ook at the data l andscape today,and highl ight potential catal ysts for increased data avail abil ity moving forward.Sit e Locat ion:Biodiversit y

208、is uniquely locat ion-specific In comparing gl obal goal s and measurement of progress towards goal s of cl imate vs.biodiversity,one key difference is the l ocation-specificity required to understand biodiversity.Removing one metric tonne of CO2 from the atmosphere in one l ocation has the same ove

209、ral l impact towards gl obal l evel s of CO2 as removing the same amount from a different l ocation.Nature and biodiversity,however,differ 19 Sept ember 2024 28Goldman SachsGS SUSTAIN:Nat ure&Biodiversit ydrastical l y by l ocation,with ecosystems in the Amazon functioning independentl y to and prov

210、iding different services than a pristine desert ecosystem,or grassl ands vs.mountainous upl and forests.These different ecosystems have different natural l y occurring species which interact with each other in different ways,provide different services and respond differentl y to human disruptions.As

211、 a resul t,ful l anal ysis of biodiversity dependencies and impacts requires a deeper understanding of where business activities are taking pl ace.Data avail abil ity at an asset or activity l evel is difficul t today,as no companies report the geol ocation data of al l activities and assets through

212、out the val ue chain today.I n some cases,companies may report the addresses of al l buil dings under direct operations,or provide an address for first tier suppl iers,but for sectors with potential l inks to deforestation and negative impacts,a singul ar point does not capture how much l and is bei

213、ng impacted and where there are exact overl aps with areas of high importance,protected areas,etc.We bel ieve this is an area that wil l see additional focus from companies,data providers and investors in the next few years,though we note that ful l discl osure of business activity l ocations by com

214、panies is unl ikel y in the short to medium term,in our view.Stakehol ders are al ready attempting to answer questions about offsetting impacts in different l ocations through a vol untary biodiversity offsets market,the impl ications of operating in different ecosystems and l ocations,and about sca

215、l ing anal ysis when the interconnectedness of species and ecosystems means that compromises wil l have to be made to sol ve for specific el ements of biodiversity that may damage others(i.e.pl anting trees for carbon capture can reduce water avail abil ity and have unintended impacts on l ocal faun

216、a).Various data providers have begun working to cl ose gaps in mapping issuers assets,activities and suppl y chains to specific geographic footprints,such as Bl oombergs Suppl y Chain l ocation data,Factsets map of Oil&Gas wel l s,S&P Gl obal s Nature&Biodiversity Risk dataset,and more.For now,this

217、is not incl uded in our new tool.Nat ure Import ance,St at e,and Condit ion in specified locat ion:Location data is ul timatel y important because the qual ity,state and status of nature in different l ocations and subsequentl y the impacts of business activities on nature and ecosystems can vary dr

218、astical l y.The Gl obal Biodiversity Framework,agreed on at COP 15 for Biodiversity in 2022,incl udes targets to conserve 30%of l and,waters and seas,to restore 30%of al l degraded ecosystems and to pl an and manage al l areas to reduce biodiversity l oss by 2030.As companies seek to further underst

219、and the impacts of business activities on biodiversity and nature,risk mitigation strategies that proactivel y address improving ecosystem conditions to facil itate increased species resil ience and richness,particul arl y in areas of high biol ogical integrity and diversity,can hel p the private se

220、ctor positivel y contribute to gl obal goal s.Nature Importance:Understanding the importance of nature through its ecosystem services provided,exceptional diversity,rarity or abundance,or contributions to sustainabl e growth can hel p contextual ize impacts of potential changes from business 19 Sept

221、 ember 2024 29Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yactivities or restoration efforts.With a key gl obal goal to protect 30%of l and by 2030,understanding key biodiversity areas can hel p prioritize areas of l and to expand conservation and remediation efforts,whil e ensuring l and rights of

222、l ocal communities and I ndigenous Peopl es are protected.Today,around 17%of l and is under some form of protection,and using stricter standards,onl y 3.37%of the EU is under strict protection and onl y Luxembourg and Sweden have more than 10%of l and strictl y protected.Data can provide context for

223、 the importance of a given area,with data sources such as maps of:Protected and Conserved Areas(i.e.Exhibit 21),nKey Biodiversity Areas,nPol l ination Support and Capacity,nEcosystem Regul ating Services(preventing or reducing impacts of l andsl ides,fires,nextreme heat,diseases,etc.),Ecosystem Typo

224、l ogy,nForest Productivity,nContributions to Peopl e and Cul tural Services,andnNatural Commodities and Resources,Critical Natural AssetsnNature State:I dentifying which and how many species are or have been present somewhere,al ong with changes over time or risk factors,can be done from ground up s

225、urveying,using environmental DNA(Nature Metrics),bioacoustics(to sonical l y identify species),or satel l ite imagery and drone footage(Sattel igence,SarVision,Pl anet Labs,etc.)I n addition,tracking species often requires model ing and estimation to some degree.Understanding what species are presen

226、t and risk l evel s of species and assets in a given area can al so hel p contextual ize the impacts of potential changes as a resul t of business activities,with data sources such as maps of:Exhibit 21:Prot ect ed and conservat ion areas can t ake a wide variet y of forms,some of which cont ribut e

227、 t o t he global goal of prot ect ing 30%of land by 2030,and t he EUs goal of st rict ly prot ect ing 10%of EU land by 2030 Prot ect ed areas in Europe Source:Esri,HERE,Garmin,FAO,NOAA,USGS,European Environment Agency19 Sept ember 2024 30Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yI UCN Red List Sp

228、ecies and Extinction Risk,nSpecies Threat Abatement and Restoration(STAR),nSpecies Richness,nSpecies and Resources Scarcity and Rarity,nWater Risk and Scarcity,andnMean Species AbundancenNature Condition:The condition of nature seeks to measure how wel l an ecosystem functions vs.a basel ine of the

229、natural l and without any human intervention.Because different species,resources and assets are natural l y occurring in different geographic l ocations,responses to human activity can take many different directions.Different scientists approach measuring these responses in sl ightl y different ways

230、,seeking to understand not onl y the composition of species present but to al so consider species habitat,connectivity,function,structure,the interactions between ecosystem components and other ecol ogical processes through data sources such as:Biodiversity I ntactness,nEcosystem condition(or condit

231、ion of natural assets within an ecosystem such as air,nwater,soil),Land use change,deforestation,tree cover l oss,nEcosystem I ntegrity,nEnvironmental Performance,nHuman impacts at a granul ar l evel,incl uding l ight pol l ution,l evel s of fish catches,nwater pol l ution,water depl etion,etc.Human

232、 Modification,andnEcoregion I ntactnessnBuil ding data around the importance,state or condition of nature can be done through ground-up data gathering of present species,identifying which and how many species are or have been present somewhere using environmental DNA(Nature Metrics),bioacoustics(to

233、sonical l y identify species),or satel l ite imagery and drone footage(Sattel igence,SarVision,Pl anet Labs,etc.).We do not currentl y incl ude this in our tool.19 Sept ember 2024 31Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yExhibit 22:One indicat or of ecosyst em condit ion looks at st ress level

234、s from human modificat ion of ecosyst ems,wit h highest levels of st ress in India,China and t hroughout Europe Global Human Modificat ion of Terrest rial Syst ems Source:Kennedy CM.JR Oakleaf.DM Theobald.S Baruch-Mordo and J Kiesecker.2020.Global Human Modification of Terrestrial Systems.Palisades

235、NY:NASA Socioeconomic Data and Applications Center(SEDAC).https:/doi.org/10.7927/edbc-3z60.Accessed 21 May 2024.19 Sept ember 2024 32Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yFrameworks and Cat alyst s t o Change Fut ure Dat a Availabilit y Landscape Recent focus on understanding biodiversity imp

236、acts and dependencies was catal yzed by COP 15 for nature in December 2022,where the Kunming-Montreal Gl obal Biodiversity Framework was signed by 188 governments.COP 15 set four overarching nature-rel ated goal s and 23 targets for governments to achieve at a gl obal l evel.As with cl imate,a numbe

237、r of frameworks have been introduced to try to create cohesive,consistent and comparabl e data to hel p understand companies and investors impact on biodiversity and contributions towards gl obal goal s.These incl ude the Taskforce for Nature-rel ated Financial Discl osures(TNFD),GRI s 2024 Update t

238、o its Biodiversity Topic Standards,the Science Based Targets Networks Science Based Targets for Land draft,I UCNs draft on Measuring Nature-Positive,and more(Exhibit 24).Each propose sl ightl y different discl osures to measure total impact,but most consider the five drivers of biodiversity l oss,as

239、 identified by the I ntergovernmental Science-Pol icy Pl atform on Biodiversity and Ecosystem Services(I PBES)(Exhibit 23).We outl ine key highl ights where investors may find useful information and roadmaps that coul d l ead to improved data avail abil ity for systematic anal ysis in the future.The

240、 Taskforce on Nature-rel ated Financial Discl osures(TNFD)was l aunched in June 2021,and on September 18,2023 publ ished corporate reporting recommendations on nature with the support of many governments,companies and financial institutions.TNFD offers 1)a methodol ogy for identifying and understand

241、ing nature exposures and reporting rel ated to governance,strategy,risk&impact management,and metrics&targets;2)prescriptive discl osure recommendations for specific numeric indicators that a)al l companies with exposure to any biodiversity risks shoul d measure and report andb)sector-specific and b

242、iome-specific additional indicators where outsized risks andexposures may be present;and 3)practical guidance for impl ementation by companiesand financial institutions.We focus on the prescriptive core and sector-specificExhibit 23:IPBESs Five Drivers of Biodiversit y Loss Climate ChangeChanges in

243、climate impacting how ecosystems function,or potential migration of species or full ecosystemsPollutionPollutants release into water,soil and air slowing microbial growth,leading to eutrophication,and reducing biodiversityNatural Resource Use and ExploitationUnsustainable hunting,harvesting,mining a

244、nd other anthropogenic exploitation leading to biodiversity loss and extinctionsInvasive SpeciesNon-native species introduced to ecosystems,disrupting ecological function of natural systems and native speciesLand-Use ChangeConversion of land cover,changes in land management,changes in spatial config

245、uration of landscapesSource:IPBESExhibit 24:Biodiversit y disclosure landscape:t o det ermine organizat ion-level posit ive and negat ive cont ribut ions t o t he Global Biodiversit y Frameworks t arget s and sub-t arget s Source:GRI,Goldman Sachs Global Investment Research19 Sept ember 2024 33Goldm

246、an SachsGS SUSTAIN:Nat ure&Biodiversit yquantifiabl e discl osure metrics,as we bel ieve this data wil l provide investors a systematic way to begin eval uations of biodiversity impacts at a company l evel.GRIs revision to its 2016 Biodiversity standards and rel ease of GRI 101:Biodiversity 2024 inc

247、orporates updated best practices and seeks to better al ign with devel opments in biodiversity targets and frameworks.I t focuses on material ity rather than previousl y recommending discl osures on al l impacts regardl ess of significance,and it emphasizes the importance of l ocation-specific data

248、for nature and biodiversity.I t al so considers both the five drivers of nature change in addition to l ooking at changes to the state of biodiversity.The discl osure guidance final l y incl udes updated reporting recommendations across the val ue chain rather than j ust direct operations.Guidance f

249、or reporting draws from TNFDs LEAP approach,SBTNs Material ity Screening Tool,ENCORE,WWFs Biodiversity Risk fil ter,EFRAGs ESRS standards for biodiversity and more,demonstrating the inter-connectedness of the various frameworks and tool s avail abl e to investors today.That said,each piece of guidan

250、ce offers sl ightl y different requirements and interpretation:Reporting under TNFD woul d meet some but not al l el ements of GRI 101-2,101-5,101-6 and 101-7,in particul ar missing the site-specific nature of GRI s requirements.Simil arl y,reporting under GRI woul d cover most el ements of l and-an

251、d sea-use change TNFD-recommended metrics but miss specific el ements of cl imate change,pol l ution,and high-risk commodity sourcing recommended discl osures.The updated guidance is required to be used for any organization cl aiming to report in accordance with the GRI Standards from January 1,2026

252、.Reporting under these standards wil l require detail ed site-l evel assessment of al l areas of operation to determine whether each l ocation owned,managed or where business activities take pl ace coul d have significant impacts on biodiversity.For each l ocation,discl osures are required rel ated

253、to the five drivers of biodiversity l oss,in addition to information on the state of nature and subsequent changes and ecosystem Exhibit 25:TNFDs recommended disclosures map t o t he five drivers of nat ure change TNFD core global indicat ors and met rics for nat ure Exhibit 26:Nort h America lags E

254、urope and Asia,while financial inst it ut ions far out pace any ot her indust ry in early adopt ion commit ment s TNFD early adopt ers dist ribut ion,by region and indust ry no i taecreR&y t i l at ispoHs l aristudnIr ehtOsaG&l iOsdooGl at i paCs lcaemihCrtsporanTneMarirecaht l aeHscr.iDr mesunoCr e

255、htOsdnBrarsreuctafaunMa&s rtPaotAufreaCl anrsoPe&d l ohseuoHa i dMe,mm.oC,cheTr ehtOTI&reawt ftSofscerviSem coe l eT4%areardwHch Te3%saletM&ngniiM4%n iagackP&er apP5%e eatstEleaR?satM.onC,oniuctrstonC,.gnE8%esi t i l i8%t%11%ccobaTo,olcohlAv,eB,dooF31%salncinaFistaEe l ddMiehtdnaac i r fAcaerimAn i

256、tLaericamAhortNc i faciPa siAuropeE3%43%43%42%6%6%3ngnU Ut*placeholder indicators where further work is intended Source:TNFDSource:TNFD,Goldman Sachs Global Investment Research19 Sept ember 2024 34Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yservice impacts.Bel ow we l ist some(but not al l)of the r

257、eporting requirements for GRI,focusing on metrics and indicators that are prescriptive in nature,where reporting by companies coul d provide investors and other stakehol ders with comparabl e data.GRI reports that the new Biodiversity Standards wil l be used by at l east 2,000 organizations(out of t

258、he 10,000+that report using GRI Standards in general).This woul d be a meaningful increase in data avail abil ity,with al most no organizations reporting detail ed information on a site-by-site basis today.Exhibit 27:GRIs 2024 Biodiversit y updat e requires t he ident ificat ion of sit es wit h pot

259、ent ial for significant impact s on biodiversit y,wit h indicat ors and met rics t o be report ed for each sit e Select element s of GRIs Biodiversit y Report ing St andard,for met rics t hat are prescript ive in nat ure or wit h direct ly comparable,quant it at ive out put s For each site with sign

260、ificant impacts on biodiversity,the size in hectares of area under restoration or rehabilitationFor each site with significant impacts on biodiversity,the size in hectares of area restored or rehabilitatedLocation and size of sites with most significant impacts on biodiversity,and activities that ta

261、ke place in each siteFor each site,report if these are areas of biodiversity importance,high ecosystem integrity,rapid decline in ecosystem integrity,high water risks,or important for delivery of ecosystem service benefits to indigenous peoples or local communitiesProducts and services in the supply

262、 chain with the most significant impacts on biodiversity,and countries or jurisdictions where those supply chain activities take placeFor sites in 101-5,the size of natural ecosystem converted(with baseline date),and type of ecosystem before and after conversionFor sites in 101-5,the size of land an

263、d sea converted from one modified ecosystem to another(during reporting period),and type of ecosystem before and after conversionFor sites in 101-5,the quantity,type and extinction risk of each wild species harvestedFor sites in 101-5,water withdrawal and water consumption in megalitersFor sites in

264、101-5,the quantity and type of each pollutant generatedFor each product and service in its supply chain,repeat all steps in 101-6For sites in 101-5,the ecosystem type for the base yearFor sites in 101-5,the ecosystem size in hectares for the base yearFor sites in 101-5,the ecosystem condition for th

265、e base year and current reporting period101-8 Ecosystem servicesFor sites in 101-5,list ecosystem services and beneficiaries affected or potentially affected101-5 Locations with biodiversity impacts101-2 Management of biodiversity impacts101-6 Direct drivers of biodiversity loss101-7 Changes to the

266、state of biodiversityGRI 2024 Biodiversity Standards:Select reporting metrics of specific measurable indicators,numeric data,prescriptive informationSource:GRI,Goldman Sachs Global Investment Research19 Sept ember 2024 35Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yThe Science Based Targets Network(

267、SBTN)has rel eased new guidance for corporate nature targets,which offers decision tree guidance,material ity screening and guidance for setting targets al igned to freshwater,l and,ocean,cl imate and biodiversity goal s,with a focus on outcomes for species,ecosystems and natures contributions to pe

268、opl e.SBTN pl ans to further devel op guidance to expand biodiversity coverage through improved sel ection of biodiversity indicators,new metrics and safeguards around species expl oitation and invasive species,embedding biodiversity threshol ds in l and target processes,and introducing direct resou

269、rce expl oitation as a pressure category,among others.SBTNs framework for nature consists of five key steps for target-setters:Assess:Material ity screening and val ue chain assessment;this incl udes col l ecting1.data on:For operations and val ue chain:I mpacts to l and use change,l and use,watera.

270、use,GHG emissions,soil pol l ution and water pol l ution.For direct operations:I mpacts on freshwater and marine ecosystem use andb.change,and other resource use(mineral s,animal species,etc.).Prioritize:Target boundary del ineation,interpretation&ranking,and prioritization.2.Set targets:I ncl udes

271、freshwater targets(water use and freshwater pol l ution),l and3.targets(towards no conversion of natural ecosystems,l and footprint reduction,andl andscape engagement),ocean targets(stil l in progress,wil l focus on pressuresrel ated to commercial fishing and aquacul ture),biodiversity targets(integ

272、ratedthroughout target-setting process for other pressure-based targets but not separateprocesses and does not cover genetic diversity)and cl imate targets(SBTi).Threesteps:1)val idate targets,2)set interim targets and 3)discl ose targets;Act:The response options database acts as a prel iminary effo

273、rt for guidance around4.taking action towards achieving targets,but detail ed guidance on targetimpl ementation is stil l in devel opment.Track:Stil l in devel opment,and wil l focus on measuring,reporting and verification5.(MRV)activities to establ ish an MRV system and formal ize reporting require

274、ments.Companies and investors can begin to engage in this process,but verification through SBTN is not yet avail abl e.Ot her init iat ives,inst rument s,report ing frameworks,and disclosure st andards:The Kunming-Montreal Gl obal Biodiversity Framework sets four overarchingngl obal goal s to rebuil

275、 d and restore nature,al ong with 23 gl obal sub-targets forbiodiversity,incl uding corporate discl osures of biodiversity risks.Companies cancontribute to sub-targets and discl ose performance against rel evant metrics.Formore information,see GS SUSTAIN:Biodiver sit y:Next st eps post COP 15.19 Sep

276、t ember 2024 36Goldman SachsGS SUSTAIN:Nat ure&Biodiversit yThe International Sustainabil ity Standards Board(ISSB)on April 23,2024,nagreed to begin a research and standard-setting proj ect for sustainabil ity-rel atedrisks and opportunities associated with biodiversity,ecosystems and ecosystemservi

277、ces.I SSB indicated these standards woul d be informed by existing work on theSASB Standards and TNFD.The SASB Standards offer specific accounting recommended discl osureometrics for ecol ogical impacts(i.e.%mine sites where acid rock drainage ispredicted to occur,activel y mitigated and under treat

278、ment or remediation forMetal s&Mining,or Terrestrial acreage disturbed,%of impacted arearestored for Construction Material s)by sector based on their material ityassessment.The IUCN is devel oping Measuring Nature-Positive functional ity,through whichncompanies can quantify and discl ose biodiversit

279、y impacts and contributions.I naddition,a scoring system is being devel oped for investors and other stakehol dersto assess progress towards nature-positive al ignment.They present a draftframework for company assessment on the pathways towards nature-positivecontributions and the quantification of

280、contributions to nature-positive at a site l evel.PRI(Principl es for Responsibl e I nvestment)recentl y l aunched Spring,a stewardshipninitiative for nature for investors.The Spring nature assessment framework is stil lunder devel opment,but the overal l engagement approach covers forest l oss andl

281、 and degradation,pol icy al ignment to decoupl e economic activity from deforestation,and responsibl e pol itical engagement in pol icies that influence l and use.The I nvestorWorking Group wil l be announced in June 2024 to focus on engaging with 40companies.Nature Action 100 is an investor-l ed in

282、itiative to engage corporates to hel p reversenbiodiversity l oss in order to reduce l ong-term financial risks associated with the l ossof nature and its services.The Nature Action 100 framework incl udes indicators,sub-indicators and metrics investors can use to assess company ambition,companyasse

283、ssment of nature-rel ated dependencies,impacts,risks and opportunities,nature-rel ated targets,impl ementation pl ans,governance and company engagementExhibit 28:Global Biodiversit y Framework Target s 1 Plan and manage all areas to reduce biodiversity loss2 Restore 30%of degraded ecosystems globall

284、y3 Conserve 30%of land,waters and seas by 20304 Halt species extinction,protect genetic diversity,manage human-wildlife conflicts5 Ensure sustainable,safe and legal harvesting and trade of wild species6 Reduce the introduction of invasive alien species by 50%,minimize their impact7 Reduce pollution

285、to levels not harmful to biodiversity8 Minimize impacts of climate change on biodiversity,increase resilience9 Manage wild species sustainably to benefit people10 Ensure biodiversity and sustainability in agriculture,aquaculture,fisheries,forestry11 Restore,maintain,enhance natures contribution to p

286、eople12 Enhance green spaces and urban planning for human wellbeing and biodiversity13 Increase benefits-sharing from genetic resources and traditional knowledge14 Integrate biodiversity into decision-making across all levels of government15 Businesses assess,disclose and reduce biodiversity-related

287、 risks and impacts16 Enable sustainable consumption to reduce waste and overconsumption17 Strengthen biosafety and distribute benefits of biotechnology18 Reduce harmful incentives/subsidies by$500bn+/year,scale up positive19 Mobilize$200bn/year for biodiversity,including$30bn through international f

288、inance20 Strengthen capacity-building,tech transfer,and scientific cooperation21 Ensure knowledge is available and accessible to guide action22 Ensure inclusive representation by indigenous peoples in decision-making23 Ensure gender equality in implementation of other targetsSource:CBD19 Sept ember

289、2024 37Goldman SachsGS SUSTAIN:Nat ure&Biodiversit ywith trade associations,pol icy-makers and other stakehol ders.Exhibit 29:Nat ure Act ion 100 benchmark indicat ors AmbitionCommitment to avoid and reduce drivers of nature loss and/or restore ecosystems throughout value chainDiscloses location of

290、assets/activities in operations/value chain in or next to ecologically sensitive areasDiscloses material dependencies and impacts on nature in operations and throughout value chainDiscloses risks and opportunities stemming from material dependencies and impacts on natureComprehensible,measurable tar

291、gets to reduce and avoid drivers of nature loss and restore ecosystemsTargets pertain to nature impacts/dependencies,validated by third party,and are integrated with climateDiscloses progress toward targets on an annual basisDiscloses strategy for achieving nature targetsCompany respects and upholds

292、 the rights of Indigenous Peoples and local communitiesFiscal policies are aligned with achievement of nature-related targetsBoard has oversight over nature dependencies,impacts,risks and opportunitiesBoard has sufficient expertise to oversee issues related to natureResponsibility for managing natur

293、e issues is assigned at executive level,and executive remuneration incorporates nature targets performanceCompany engages with its value chain to help achieve its nature targetsDiscloses lobbying activities and expectations for its associations not aligned with the Biodiversity PlanIdentifies and en

294、gages with key stakeholders on nature-related issues and incorporates this into strategyGrievance and redress mechanism for individuals/communities to raise complaints/concerns about natureEngagementGovernanceImplementationTargetsAssessmentSource:Nature Action 10019 Sept ember 2024 38Goldman SachsGS

295、 SUSTAIN:Nat ure&Biodiversit yDisclosure Appendix Reg AC We,Madeline Meyer,Brian Singer,CFA,Evan Tylenda,CFA,Derek R.Bingham,Brendan Corbett,Emma Jones,Shubham Jain,Rachit Aggarwal and Grace Chen,hereby certify that all of the views expressed in this report accurately reflect our personal views abou

296、t the subject company or companies and its or their securities.We also certify that no part of our compensation was,is or will be,directly or indirectly,related to the specific recommendations or views expressed in this report.Unless otherwise stated,the individuals listed on the cover page of this

297、report are analysts in Goldman Sachs Global I nvestment Research division.GS Factor Profile The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market(i.e.our coverage universe)and its sector peers.The four key attributes depicted are:Growth,Fi

298、nancial Returns,Multiple(e.g.valuation)and I ntegrated(a composite of Growth,Financial Returns and Multiple).Growth,Financial Returns and Multiple are calculated by using normalized ranks for specific metrics for each stock.The normalized ranks for the metrics are then averaged and converted into pe

299、rcentiles for the relevant attribute.The precise calculation of each metric may vary depending on the fiscal year,industry and region,but the standard approach is as follows:Growth is based on a stocks forward-looking sales growth,EBI TDA growth and EPS growth(for financial stocks,only EPS and sales

300、 growth),with a higher percentile indicating a higher growth company.Financial Returns is based on a stocks forward-looking ROE,ROCE and CROCI (for financial stocks,only ROE),with a higher percentile indicating a company with higher financial returns.Multiple is based on a stocks forward-looking P/E

301、,P/B,price/dividend(P/D),EV/EBI TDA,EV/FCF and EV/Debt Adjusted Cash Flow(DACF)(for financial stocks,only P/E,P/B and P/D),with a higher percentile indicating a stock trading at a higher multiple.The Integrated percentile is calculated as the average of the Growth percentile,Financial Returns percen

302、tile and(100%-Multiple percentile).Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future.Growth uses inputs for the fiscal year at least seven quarters in the future compared with the year at least three quarters in the fu

303、ture(on a per-share basis for all metrics).For a more detailed description of how we calculate the GS Factor Profile,please contact your GS representative.M&A Rank Across our global coverage,we examine stocks using an M&A framework,considering both qualitative factors and quantitative factors(which

304、may vary across sectors and regions)to incorporate the potential that certain companies could be acquired.We then assign a M&A rank as a means of scoring companies under our rated coverage from 1 to 3,with 1 representing high(30%-50%)probability of the company becoming an acquisition target,2 repres

305、enting medium(15%-30%)probability and 3 representing low(0%-15%)probability.For companies ranked 1 or 2,in line with our standard departmental guidelines we incorporate an M&A component into our target price.M&A rank of 3 is considered immaterial and therefore does not factor into our price target,a

306、nd may or may not be discussed in research.Quantum Quantum is Goldman Sachs proprietary database providing access to detailed financial statement histories,forecasts and ratios.I t can be used for in-depth analysis of a single company,or to make comparisons between companies in dif f erent sectors a

307、nd markets.Disclosures Logo disclosure Please note:Third party brands used in this report are the property of their respective owners,and are used here for informational purposes only.The use of such brands should not be viewed as an endorsement,af filiation or sponsorship by or for Goldman Sachs or

308、 any of its products/services.Pricing information Pr i ces as of the cl ose of Aug 27,2024 ANA Holdings(2,922),AZEK Company I nc.($42.51),Airbus(140.86),Antero Resources Corp.($26.58),Ashtead Group(5,228p),Bridgestone(5,702),Bunge($100.32),CMOC Group(A)(Rmb7.43),CMOC Group(H)(HK$6.44),CNH I ndustria

309、l($10.14),Centrica(127.55p),ConocoPhillips($112.43),DSM-Firmenich(118.95),Daifuku Co.(2,772),Darling I ngredients I nc.($41.46),Dassault Systemes(34.31),Deere&Co.($375.98),Denso(2,249),Dubai Electricity and Water Authority(AED2.42),EQT Corp.($32.75),Empresas CMPC SA(Ch$1,515),Enel SpA(6.77),Engie(15

310、.66),Flex($32.22),GFL Environmental(C$56.74),GFL Environmental($42.23),I berdrola SA(12.69),I ndustrie De Nora SpA(9.81),Kinder Morgan I nc.($21.39),Kingspan(77.85),Kurita Water I ndustries(5,856),Lennox I nternational I nc.($578.16),Makita(4,755),Mercedes-Benz Group AG(62.56),Mondelez I nternationa

311、l I nc.($71.25),National Grid Plc(993.2p),Norsk Hydro(Nkr60.40),Novo Nordisk(Dkr904.10),Novo Nordisk(ADR)($135.18),Novonesis(Dkr455.00),Planet Labs($2.58),Porsche AG(69.86),Repsol(12.64),SMC(66,390),SSE Plc(1,875p),Siemens AG(167.12),Sumitomo Metal Mining(4,108),Trex Company I nc.($65.08),Trimble I

312、nc.($56.60),Ultratech Cement(Rs11,229.85),Veolia Environnement(29.34),Veralto Corp.($111.15),Weyerhaeuser Co.($30.60)and Xylem I nc.($135.42)Distribution of ratings/investment banking relationships Goldman Sachs I nvestment Research global Equity coverage universe As of July 1,2024,Goldman Sachs Glo

313、bal I nvestment Research had investment ratings on 2,925 equity securities.Goldman Sachs assigns stocks as Buys and Sells on various regional I nvestment Lists;stocks not so assigned are deemed Neutral.Such assignments equate to Buy,Hold and Sell for the purposes of the above disclosure required by

314、the FI NRA Rules.See Ratings,Coverage universe and related definitions below.The I nvestment Banking Relationships chart reflects the percentage of subject companies within each rating category for whom Goldman Sachs has provided investment banking services within the previous twelve months.Rating D

315、istributionInvestment Banking RelationshipsBuyHoldSellBuyHoldSellGlobal48%35%17%64%57%41%29 August 2024 39Goldman SachsGS SUSTAIN:Nature&BiodiversityRegulatory disclosures Disclosures required by United States laws and regulations See company-specific regulatory disclosures above for any of the foll

316、owing disclosures required as to companies ref erred to in this report:manager or co-manager in a pending transaction;1%or other ownership;compensation for certain services;types of client relationships;managed/co-managed public of f erings in prior periods;directorships;for equity securities,market

317、 making and/or specialist role.Goldman Sachs trades or may trade as a principal in debt securities(or in related derivatives)of issuers discussed in this report.The following are additional required disclosures:Ownership and material conflicts of interest:Goldman Sachs policy prohibits its analysts,

318、prof essionals reporting to analysts and members of their households from owning securities of any company in the analysts area of coverage.Analyst compensation:Analysts are paid in part based on the profitability of Goldman Sachs,which includes investment banking revenues.Analyst as officer or dire

319、ctor:Goldman Sachs policy generally prohibits its analysts,persons reporting to analysts or members of their households from serving as an of ficer,director or advisor of any company in the analysts area of coverage.Non-U.S.Analysts:Non-U.S.analysts may not be associated persons of Goldman Sachs&Co.

320、LLC and therefore may not be subject to FI NRA Rule 2241 or FI NRA Rule 2242 restrictions on communications with subject company,public appearances and trading securities held by the analysts.Distribution of ratings:See the distribution of ratings disclosure above.Price chart:See the price chart,wit

321、h changes of ratings and price targets in prior periods,above,or,if electronic format or if with respect to multiple companies which are the subject of this report,on the Goldman Sachs website at https:/ disclosures required under the laws and regulations of jurisdictions other than the United State

322、s The following disclosures are those required by the jurisdiction indicated,except to the extent already made above pursuant to United States laws and regulations.Australia:Goldman Sachs Australia Pty Ltd and its af filiates are not authorised deposit-taking institutions(as that term is defined in

323、the Banking Act 1959(Cth)in Australia and do not provide banking services,nor carry on a banking business,in Australia.This research,and any access to it,is intended only for“wholesale clients”within the meaning of the Australian Corporations Act,unless otherwise agreed by Goldman Sachs.I n producin

324、g research reports,members of Global I nvestment Research of Goldman Sachs Australia may attend site visits and other meetings hosted by the companies and other entities which are the subject of its research reports.I n some instances the costs of such site visits or meetings may be met in part or i

325、n whole by the issuers concerned if Goldman Sachs Australia considers it is appropriate and reasonable in the specific circumstances relating to the site visit or meeting.To the extent that the contents of this document contains any financial product advice,it is general advice only and has been pre

326、pared by Goldman Sachs without taking into account a clients objectives,financial situation or needs.A client should,before acting on any such advice,consider the appropriateness of the advice having regard to the clients own objectives,financial situation and needs.A copy of certain Goldman Sachs A

327、ustralia and New Zealand disclosure of interests and a copy of Goldman Sachs Australian Sell-Side Research I ndependence Policy Statement are available at:https:/ information in relation to CVM Resolution n.20 is available at https:/ applicable,the Brazil-registered analyst primarily responsible for

328、 the content of this research report,as defined in Article 20 of CVM Resolution n.20,is the first author named at the beginning of this report,unless indicated otherwise at the end of the text.Canada:This information is being provided to you for information purposes only and is not,and under no circ

329、umstances should be construed as,an advertisement,of f ering or solicitation by Goldman Sachs&Co.LLC for purchasers of securities in Canada to trade in any Canadian security.Goldman Sachs&Co.LLC is not registered as a dealer in any jurisdiction in Canada under applicable Canadian securities laws and

330、 generally is not permitted to trade in Canadian securities and may be prohibited from selling certain securities and products in certain jurisdictions in Canada.I f you wish to trade in any Canadian securities or other products in Canada please contact Goldman Sachs Canada I nc.,an af filiate of Th

331、e Goldman Sachs Group I nc.,or another registered Canadian dealer.Hong Kong:Further information on the securities of covered companies ref erred to in this research may be obtained on request from Goldman Sachs(Asia)L.L.C.India:Further information on the subject company or companies ref erred to in

332、this research may be obtained from Goldman Sachs(I ndia)Securities Private Limited,Research Analyst-SEBI Registration Number I NH000001493,951-A,Rational House,Appasaheb Marathe Marg,Prabhadevi,Mumbai 400 025,I ndia,Corporate I dentity Number U74140MH2006FTC160634,Phone+91 22 6616 9000,Fax+91 22 661

333、6 9001.Goldman Sachs may beneficially own 1%or more of the securities(as such term is defined in clause 2(h)the I ndian Securities Contracts(Regulation)Act,1956)of the subject company or companies ref erred to in this research report.I nvestment in securities market are subject to market risks.Read all the related documents carefully before investing.Registration granted by SEBI and certification