While the big picture is clear – we must move towards creating a nature-positive economy as a society – how to incorporate this thinking into individual company action is opaque for most companies. This leaves boards unsure how to proceed and the upshot is that action is far too slow at a time of urgency.
It’s likely that specific sectoral pathways will be needed alongside broader routes to getting nature into business strategy, into narrative reporting and ultimately onto the balance sheet – as we have argued in our recent report: ‘National Nature Positive Pathways to Guide Policy and Private Sector Action’. We must think about the detail while also being mindful of the big picture.
How to shift the dial
Firstly, these specific sectoral pathways for nature should be developed through collaboration between government and the private sector if clear guidance, support and expectations are to be set. Existing global initiatives for developing sectoral roadmaps have been an inspiration but, so far, they do not specify the level of ambition required from business to deliver the nature goals that governments have agreed (for example those set out in the Global Biodiversity Framework – progress against which is being reviewed in this week’s Biodiversity Summit in Colombia).
Secondly, to give them legitimacy, these pathways must be based on robust science and a good governance framework (involving academic modelling and research) to ensure they really do deliver the required level of change to ensure the targets are met – not just sticking a finger in the air.
Thirdly we need to see policy being put in place to incentivise and support the delivery of these pathways.
Fourthly, companies must be encouraged to set their own nature-related goals and manage their impacts and risks, using nature-positive pathways, alongside frameworks like TNFD.
And then we need to see the integration of nature-related considerations into companies' transition plans – both in terms of how they can manage any nature-related risks from their climate actions, and how they use nature-based solutions to deliver their climate targets; but also in terms of how they can contribute to the delivery of these nature-positive pathways and make progress towards the delivery of their own nature-related goals.
The transition plan is where climate and nature can sit together – one tool where a company’s integrated thinking is set out and actions formulated. The climate journey has provided a clear architecture for guiding private sector action, and we should use it to support action on nature too.
We must get beyond the sentiment on boards that their companies are isolated with existential problems to solve but not enough guidance on how to take action, resulting in nervousness and retrenchment. This is a time to not only build capacity but also confidence.
Challenges in integrating nature into strategy
To date there has been a dearth of understanding – and indeed language – around the economic impacts of business on nature. But there is a clear role for economists in delivering change. We have already seen how accountants have become central to the integration of nature-related impacts into boardroom discussions and financial statements. And economists are vital to the debate too.
We know that nature loss is not going to be resolved by leaving things to the market – because nature is an externality. And environmental externalities are a central tenet of economics. Let’s listen to the economists and hear what they have to say about nature and markets.
Increasingly, we’re seeing nature risks affect business – that is a company’s own profit margins – but these risks are also affecting other people’s businesses, livelihoods and health; and these impacts are rarely accounted for by the businesses that are causing these risks.
It will take global and national policy shifts to reshape the incentives in our economic system to protect what is left of our planet’s natural resources and drive transition – something that was discussed in WWF’s recent publication: A Global Roadmap for a Nature Positive Economy.
And we have a model for this. In the UK, we have seen the commitment to becoming a net zero-aligned financial centre, which implies we must prioritise achievement of these environmental goals ahead of short-run profit-maximisation. Now we need to include nature-positive goals alongside net zero in that commitment.
It all takes leadership and optimism
We have witnessed climate and nature leadership, but there is not enough if we are going to make those strides that protect the planet going forwards.
In the same way as there is business opportunity in net zero, so too is there the potential for innovative and profitable business around a nature-positive transition. We need to see investment in more nature-friendly technologies, like precision agriculture techniques, bio-based fertilisers, vertical farming and alternative proteins. These are all exciting investment opportunities and new technological innovations that have the potential to underpin further growth.
And I have seen with my own eyes how companies have invested in the capacity to think about a nature-friendly future. Resources are being allocated to grappling with these issues and working out how to manage them. But not enough is being done at any level – company, sector, national or global.
