The economic imperative for a healthy planet is becoming increasingly evident. The World Economic Forum believes a nature-positive economy can unlock an estimated $10 trillion of business opportunities by transforming the three systems that are responsible for 80% of nature loss (food, infrastructure and energy), and could create 395 million jobs by 2030.
But business leaders and governments need to scale and speed up efforts if we are to have any chance of reaping these rewards, along with reversing biodiversity loss and mitigating climate change. Businesses must act now, and there are four steps they should take:
1. Companies must assess their most material impacts and dependencies on nature, climate, natural capital and people across their production and consumption value chain. Tools such as the Natural Capital Toolkit are available to support the assessment and to help business leaders understand and manage the risks and opportunities identified.
More widely, companies need to strengthen accountability systems to avoid “greenwashing”, and to ensure that businesses measure their performance not just in terms of the financials but also their social and environmental contributions. The newly established Taskforce on Nature-related Financial Disclosures, a market-led initiative, will help direct investments towards a nature-positive future.
2. Companies should commit to setting measurable, science-based targets for how much they will contribute to restoring natural ecosystems, including forests, soils, freshwater systems, and marine environments. They should further ensure that these targets are ambitious, made public, and are backed up with clear timelines.
For example, a government-endorsed global goal to halt and reverse nature loss by 2030 will give business the confidence to act. It also aligns with the widespread net-zero emissions goal. But it’s important that companies monitor, report and improve on progress towards these targets.
3. Increase investment to protect, restore and sustainably use nature. Immediate action is required to eliminate or reduce the impact on nature entirely, and regenerate and restore natural ecosystems. This requires transforming business models to become nature-positive across the value chain by giving back more than we take.
For instance, firms could invest in circular business models and products, such as buildings that absorb pollutants, or investments in restored mangroves that act as insurance against flood damage. Moreover, companies should divest from assets that over-exploit nature and redirect resources towards sustainable projects. We need to mainstream green finance and make all investments sustainable by default.
The wider finance sector has a critical role to play in resource mobilization, large-scale investments and adaptations. The United Nations is calling for investments in nature-based solutions to triple by 2030 and increase to $536 billion by 2050, if the world is to meet biodiversity, climate change and land degradation targets. There is still much further to go. Current investments amount to $133 billion, most of which comes from public sources.
An obvious move would be for governments to make nature action core to the economic recovery from the pandemic in order to catalyze private-sector investment. Another step would be to eliminate harmful subsidies or redirect them towards protecting nature. The OECD estimates that governments in developed and emerging economies hand out $345 billion of potentially harmful agriculture subsidies each year.
4. Companies need to advocate for more ambitious policies on nature, such as mandatory nature-related disclosures and green taxes that incentivize companies to act positively. This would create a stable operating environment and a level playing field for business. I have observed a recent groundswell of interest from business and finance, but voluntary action alone is not enough. To rapidly scale current efforts, governments need to create a more integrated climate-nature policy framework.