What’s New

Nature is in crisis. Around one million plant and animal species are now threatened with extinction–a loss that would destroy the critical ecosystem services that human life depends upon.

As the WEF notes: “Farming, overfishing, mining, and deforestation have now reached such a scale that they are reducing the resilience of the biosphere—the thin veil on the surface of Earth where life thrives.” One recent report by Chatham House and the UNEP also found that agriculture alone poses a threat to 24,000 of the 28,000 species at risk of extinction.

The need for urgent action to not only halt this assault on nature, but reverse it, is increasingly recognized. The WWF has described the pandemic-delayed UN Biodiversity Conference (COP15), part two of which is scheduled to take place in Kunming, China, later this year, as a “once-in-a-decade opportunity” to secure a global agreement to address nature loss. 88 heads of state have also signed the Leaders Pledge for Nature to reverse the loss of biodiversity by 2030.

Meanwhile, more than 700 businesses with combined revenues of US$4.3 trillion have called for world leaders to reverse the loss of nature in the same timeframe and commit to a nature equivalent of the 1.5°C climate target set out in the Paris Agreement.

New regulations and frameworks are adding to the momentum behind the nature positive movement. The Taskforce on Nature-related Financial Disclosures (TNFD) builds on a model developed by the Taskforce on Climate-related Financial Disclosures (TCFD) and aims to support a shift in global financial flows toward nature positive outcomes. Article 29 of the French law on Energy and Climate also requires financial institutions, such as banks, investors, and insurers, to disclose biodiversity and climate-related risks.

The Secretariat of the UN Convention on Biological Diversity (CBD) has also released a draft of a new global biodiversity framework, which will be presented for consideration during the second part of COP15. It aims to guide actions worldwide through 2030 to “preserve and protect nature and its essential services to people,” en route to “living in harmony with nature” by 2050.

The first iteration of the World Benchmarking Alliance (WBA)’s Nature Benchmark is also planned for publication in November 2022. It aims to incentivize companies to start taking action to understand where biodiversity risks are highest and act quickly to halt damaging trends. The aim is to incentivize companies to start taking action to understand where biodiversity risks are highest and act quickly to halt damaging trends.

Business will also need to take a holistic approach to their efforts to become nature positive—i.e., one that recognizes the interconnection between nature, climate change and human rights. As a report from a collaboration between the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) and the Intergovernmental Panel on Climate Change (IPCC) puts it: “Biodiversity loss and climate change are both driven by human economic activities and mutually reinforce each other. Neither will be successfully resolved unless both are tackled together.”

Regenerative agriculture, which can help to rebuild soil organic matter and restore degraded soil biodiversity, is one example of how this can be achieved. As the Regenerative Agriculture Initiative and The Carbon Underground state, this approach helps with both “water holding capacity and sequestering carbon at greater depths, thus drawing down climate-damaging levels of atmospheric CO2, and improving soil structure to reverse civilization-threatening human-caused soil loss.”

Ecosystems such as forests and peatlands also store large amounts of carbon. A promise from 30 of the world's biggest financial companies to end investment in activities linked to deforestation could therefore benefit both nature and the climate too. The same is true of a further pledge by 110 world leaders to end and reverse deforestation by 2030, which is backed by US$19.2 billion of public and private funds. A portion of those funds will assist developing countries in restoring damaged land, mitigating wildfires, and supporting indigenous communities, which have a tradition and wealth of knowledge on being the most effective stewards of their local lands.

Indeed, this knowledge is essential for successfully restoring and enhancing nature. “Save the Redwoods League,” a nonprofit organization committed to protecting and restoring California redwood trees, effectively made this point when it returned ownership of a 523-acre redwood forest to a group of 10 native tribes.

Although there are many other signs of a shift toward nature positive solutions, more financial investment still needs to be unlocked to scale efforts. The Paulson Institute, The Nature Conservancy, and the Cornell Atkinson Center for Sustainability put the biodiversity financing gap between US$598-824 billion per year by 2030, while the UNEP’s State of Finance for Nature report identified a US$4.1 trillion financing gap in nature by 2050.

Should this funding gap be closed, the WEC Future of Nature and Business report estimates that a nature postive economy could unlock US$10 trillion of business opportunities and create 395 million jobs by 2030 by transforming the three economic systems responsible for almost 80 percent of nature loss: food, infrastructure, and energy.

In other words, with more investment now, and greater commitment from business and government, nature positive approaches could eventually benefit bottom lines as well as ecosystems, people, and the planet.

Signals of Change

The Regenerative Production Landscape Collaborative, founded by Laudes Foundation, IDH, and WWF India, recently launched its public-private-community partnerships (Compacts) initiative. It brings together firms, such as Inditex, H&M Group, and Ikea, with government, farmers, and civil society to revitalize soil health, boost smallholder farmer incomes, improve access to water, enhance biodiversity, and address gender equity. The first Compact, which is being formed in Madhya Pradesh, India, aims to reach 20,000 farmers and bring 20,000 hectares under regenerative agricultural practices.

The L’Oréal Fund for Nature Regeneration has invested in The Real Wild Estates Company, a UK rewilding business. The “natural capital startup” sources and manages estates that are suitable for nature restoration, regenerative agriculture, and rewilding. It aims to restore up to 50,000 hectares of degraded landscapes across the UK and create approximately 1,000 jobs, while also generating a return for investors.

Germany has launched a new fund to halt global biodiversity loss. The Legacy Landscapes Fund aims to mobilize enough funding from private and public donors to provide 15 years of financial support for 30 biodiversity hotspots in Africa, Asia, and Latin America and was seeded with US$99 million from the German government and US$30 million from private investors. Funding will be used to pay park rangers, support local communities, fund surveillance and monitoring, and maintain infrastructure.

Implications for Sustainable Business

Businesses need to create strategies that will immediately reduce negative impacts on nature while actively working to regenerate and restore the landscapes where they directly (owned operations) or indirectly (in the supply chain) operate.

First, they will need to identify which nature-related issues are material to their business and then assess the key nature impacts and dependencies in their value chain related to these issues. Once these are properly understood, they can then start to collect the data and information needed to develop credible strategies that will address the biggest nature-related risks and opportunities for their company.

This is an increasingly urgent task. Regulators and investors are calling for more transparency around business impacts on nature. For example, the TNFD aims to integrate nature into financial and business decision-making, ultimately shifting global financial flows toward nature postive outcomes. The TNFD beta framework includes guidance for incorporating nature-related risk and opportunity assessments into overall business strategy and risk management processes. Tools such as WBA’s Nature Benchmark will also help businesses to assess how their nature positive strategy is progressing, and where there is room for improvement.

In addition, businesses should set measurable and credible targets directly related to their impacts on nature (e.g., land use, freshwater use, marine systems). The Science-Based Targets Network (SBTN) has developed interim guidance and targets that businesses can utilize to begin addressing impacts on nature, framed on the SBTN’s Action Framework: Avoid, Reduce and Regenerate, Restore, and Transform. SBTN’s Action Framework and interim guidance highlights that several types of action will be needed, including “avoiding and reducing the pressures on nature loss,” “restoring and regenerating so that the extent and integrity of nature can recover,” and “transforming underlying systems, at multiple levels, to address the drivers of nature loss.”

To become nature positive, companies may need to make profound changes to their operations and the resulting impacts they have on sourcing communities’ access to critical resources such as water, food, and culturally significant lands. For example, there is an urgent need for agriculture to adopt new technologies and significantly scale up scientifically proven practices such as crop rotation, no-till farming, agroforestry, and the use of cover crops that improve the soil. At the same time, practices that harm biodiversity—such as the application of certain fertilizers and pesticides—will need to change immediately across all landscapes.

As well as being intertwined with climate impacts, protecting, restoring, and regenerating nature is a human rights issue. Businesses currently engaged in philanthropic work subsidizing nature-based initiatives outside of their direct and indirect value chain should integrate strategies that benefit nature, address climate change, and support communities and livelihoods directly into their business models. They must also take accountability for their direct impacts on upstream communities.

Business impacts on nature have been linked to communities’ access to crucial resources such as food and water (more importantly, freshwater), for instance, as well as their economic stability. Along with addressing these impacts, businesses should seek to enable local communities to continue producing on the land. Jurisdictional approaches involving collaboration with local and regional governments, community groups, other businesses, and NGOs will be particularly important for advancing this goal and reducing negative impacts on the environment and local communities.

Although climate change mitigation efforts and nature positive strategies are generally mutually reinforcing, it’s possible that conflicts may arise in some industries and areas. Where applicable, businesses will need to identify such conflicts—and take steps to reduce or eliminate harms to nature—as they strive to become nature positive.

Ultimately, the nature positive concept needs to become a core component of company strategies and business models. Impacts on nature need to be fully embedded into decision-making processes, and efforts to restore and work in harmony with nature need to be measured, tracked, reported, and shared so that others can learn from them. At the same time, businesses should also advocate for greater action by governments and other organizations so that nature is on the path to recovery by 2030.