Why should businesses aim for a nature positive and net-zero economy?
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Companies' net zero targets surged more than 40% between 2022 and 2023, which means that, based on Net Zero Tracker's latest analysis, 66% of the annual revenue of the world’s largest 2000 companies are now committed to net zero goals.
Since it has become inevitable for businesses to set climate agendas, most sustainability strategies and finance are driven by a climate-first approach, sidelining other important areas, such as biodiversity.
“There is a need to emphasise that climate change and loss of nature are inextricably linked since both drive each other, and neither can be solved in isolation,”
says Thomas Ball, Director of Nature and Land Use at KPMG’s Sustainable Futures.
The concept of creating a nature positive economy is gaining momentum in the business, policy, and finance sectors and becoming more recognised as a way to address global ecological and societal challenges.
Based on the definition promoted by the global Nature Positive Initiative, it practically means that we ‘halt and reverse nature loss by 2030 on a 2020 baseline and achieve full recovery by 2050’, also known as the Global Goal for Nature.
As Thomas explains, nature positive is " a world where nature - species and ecosystems - is being restored and is regenerating rather than declining.”
This initiative is directly linked to the Global Biodiversity Framework (GBF), signed by 190 countries at the COP 15 UN Biodiversity Conference in 2022.
“Target 15 under the GBF is particularly important for businesses: `Businesses Assess, Disclose and Reduce Biodiversity-Related Risks and Negative Impacts`.
However, it is still challenging to translate these global goals and definitions into tangible actions,” adds Thomas, noting that this will happen sooner rather than later.
Although it is tempting to say that my business is unrelated to nature, very few companies can function in complete isolation from ecosystems, and it is becoming more expensive to keep problems away and pay off rather than address root issues.
He highlights that forward-thinking businesses are already integrating nature and climate strategies and that ready-to-use resources are available to help companies design meaningful plans and outline required steps.
A practical tool he recommends is the LEAP framework, a four-step practical process set out by the Taskforce on Nature-related Financial Disclosures, which stands for Locate, Evaluate, Assess and Prepare.
It starts by locating the company`s direct and indirect interface with nature and biodiversity, then evaluates nature-related impacts and dependencies from the business model and activities, assesses related risks and opportunities, and concludes by disclosing the findings in a report.
The next phase is to develop an integrated climate and nature transition plan with clear, actionable steps to achieve science-based targets in order to build resilience and contribute to a more sustainable economy.
Although it might all seem very logical, it is far from being the business-as-usual practice.
“Nature, in some quarters, continues to play second-order priority to climate change and other ESG topics, but in the main, it is rapidly rising on the agenda,”
shares Thomas.
He adds that "in general, leaders are familiar with nature-related issues but it is a challenge for them to prioritise, make it tangible and divert funding towards this area as it doesn`t seem to have the same urgency as addressing the climate crisis.”
“If you don`t consider nature in your decarbonisation process and take the services it provides for granted, you are missing something vital.”
He explains that driving finance into nature protection and restoration is critical.
"Investors should look for co-benefits for nature, climate and people. For example, it's important to plant the right trees in the right place to restore biodiversity, sequester carbon and provide amenity value to communities. This requires a landscape-scale approach and engaging local stakeholders in decision making is critical to that process."
It is also a question of positioning nature-related investments and business strategies to identify new potential growth areas.
Changing the optics on how acceptable it is to exploit or sideline nature could also spark change.
“You would not hear a company disclosing that modern slavery is just an inevitable consequence of running their business - they would know this is unacceptable and needed to be tackled immediately.
We need the same to happen for nature so a company knows that it is unacceptable for their business to be associated with deforestation in the Amazon or in biodiversity rich regions such as Borneo."
However, he notes that “The list of requirements and challenges for businesses is immense, and so many don’t have the capacity or personnel to take on what is regarded as a separate or less important issue.”
Education and collaboration are the key components Thomas thinks will be critical to making the necessary changes, especially in the field of connecting the finance sector with environmental conservationists, as they are generally very different communities.
Despite the challenges, some encouraging progress has been made in Ireland, such as the recent Citizen’s Assembly on Biodiversity Loss or the publication of the 4th National Biodiversity Action Plan in Ireland.
“The tone and scope of the conversation have changed, and there is more openness and willingness to learn and consider the importance of the topic. This has yet to translate into any radical shifts in how we do business in Ireland or globally, but we are starting to see some positive signs.”
We need to build up the skillset that allows people in various roles to understand business and nature alike so they can connect the dots and drive projects that integrate both.
A great example is building the Peatland Finance Ireland initiative that offers an innovative model for funding and rewarding peatland restoration while engaging multiple stakeholders in aligning the carbon, water and biodiversity agendas with opportunities for communities and regional development.
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