Ruth Murray, associate director of sustainable infrastructure at Gresham House outlines the importance of biodiversity on the journey to a net-zero future
All eyes are on net zero – from governments at COP27 to corporations making pledges. Climate change poses an existential threat. But this is only one half of the equation. Nature has subsidised our growth and prosperity to its serious detriment, creating another existential threat equal to that of climate change. It is imperative that biodiversity restoration is a key element of our race to Net zero; they are inherently linked. By restoring biodiversity levels, we build resilience to the effects of climate change and reduce carbon emissions.
Being net zero is not enough, we need to become ‘nature positive’. Biodiversity richness provides our food, clean air, and abundant water. It stores carbon, mitigates flood risk, maintains pollinator populations, and provides stability to natural ecosystems, providing resilience against future shocks. But one-fifth of these ecosystem services are on the verge of collapse. Globally, wildlife populations have declined by 69 per cent on average in the last 50 years. Within the UK, levels of species decline are at 60 per cent, making it one of the most nature-depleted countries in the world.
Over the past four centuries, the world’s natural capital has been ‘mined’ and depleted in exchange for economic growth. Agricultural intensification and rapacious development have dramatically altered the planet to the point where each year the global human population now consumes the annual output of three planets. It is imperative that we restore biodiversity through a systematic approach of putting back more into nature than we consume each year.
The economic futures of corporate business are inextricably linked to natural capital – 55% of global GDP relies on what nature provides so behaviours must change. Governments and corporates urgently need to adopt a Nature Positive regime for the natural environment to be restored at the scale and speed necessary to avert a collapse in the ecosystems and to futureproof their own business models.
We see good intentions articulated everywhere. The World Economic Forum proposes that all businesses should already be on a nature positive journey, to “Avoid, Reduce, Restore & Regenerate, Transform”. This is echoed by the UK government’s Dasgupta Review on the economics of biodiversity, which stressed the need to introduce legally binding government targets to reverse the decline in nature and natural capital by 2030, and to live in harmony with nature by 2050.
But we need more than intentions. We need to unlock the opportunity for private sector capital to invest in nature-based solutions to make the corporate market Nature Positive. The GFI Finance Gap report estimates that £56 billion in investment above current public sector commitments is needed to meet nature-related outcomes in the next ten years within the UK.
The need for clear and consistent policy and regulation which creates a level playing field across the nature-based solutions market and treats best outcomes for nature as a ‘north star’ is needed now. This will provide the framework to unlock private capital which is essential in funding high quality solutions at scale to this developing market.
Measurement, disclosure, accounting and reporting on impacts on nature are to become a mandatory requirement as part of financial reporting and the production of annual accounts, with the Taskforce for Nature-Related Financial Disclosure (TNFD) being the leading standard. This will affect companies at all levels impacting on availability of funding, insurance and consumer perception. Soon, the success of business operation will be determined by how a company addresses its impacts on natural capital.
The demand for nature-based solutions is visible – consumers are acutely aware of the significance of the threats from climate change and biodiversity loss. This awareness is driving behaviour change which in turn increases investor and regulatory pressure for changes to corporate accountability, reporting and action.
There is also a rapidly growing awareness of greenwashing; businesses must have transparency in their use and conservation of natural resources and the quality and auditability of nature positive investments they make. Companies that fail to adapt their business models towards being Nature Positive, risk irrelevance. Those that undertake full disclosure, reduce their effects on nature and go beyond mitigation of impacts, will win the corporate evolutionary race and maintain their licence to operate. They will future-proof their businesses and our futures by doing so.
Until there is parity of treatment for biodiversity and Net Zero, nature will always be playing catch-up. There needs to be the same sense of urgency, drive for regulation and corporate responsibility for both of us to achieve a sustainable and economically prosperous future for the planet.