Over half of the world’s GDP—around $44 trillion—depends on nature, yet we’re losing natural ecosystems at an unprecedented rate, putting businesses and livelihoods at risk.1
Businesses have so far primarily been focused on carbon and net zero. While these remain important, it’s becoming clear that organisations rely on the health of forests, oceans, rivers, and biodiversity to produce goods and transport them worldwide. Yet, instead of protecting this natural asset globally, we continue to degrade it.
To quote Antonio Guterres, UN Secretary General:
“Humanity depends on land. Yet, all over the world, a toxic cocktail of pollution, climate chaos, and biodiversity decimation are turning healthy lands into deserts, and thriving ecosystems into dead zones…That means crops failing, water sources vanishing, economies weakened, and communities endangered – with the poorest hit hardest.”
Clearly, this is an important topic to discuss.
Gate One and Liberty Specialty Markets recently hosted a roundtable with sustainability leaders to discuss this very issue. With voices from organisations across construction, fast food, healthcare, higher education, hospitality and leisure, the public sector and retail, the conversation uncovered what challenges are stalling actions to protect and restore nature and how the role of institutions including regulators and the Government is increasingly important.
Each of the challenges highlighted by sustainability leaders can be tackled and here’s how.
Challenge 1: Regulation is a double-edged sword
Increasingly, companies are having to measure and report on their dependency and impact on nature (TNFD, CSRD, EUDR, etc.). While this can increase focus on the importance of nature within businesses, leaders feel it’s created a further overhead to comply and provide auditable disclosures. It’s also creating a focus on compliance rather than reducing nature loss outcomes.
Tip: Use regulation to accelerate change in the business. Focus on the outcomes when communicating internally. For example, complying with the EU’s deforestation regulation helps to protect remaining forests and habitats for biodiversity. This also helps protect the organisation’s reputation with customers, suppliers and investors.
Challenge 2: Economics are challenging
“Cost is king” is how one roundtable participant put it. Businesses are finding it hard to justify the cost of investing in protecting and restoring nature with senior leaders, unless it’s to avoid penalties from regulators or to comply with planning permission.
Tip: Collaborate with other organisations to lobby for creating commercial markets for nature capital, similar to carbon credits, which put a price on the benefit of protecting and help drive more inward investment in restoring nature.
Challenge 3: Nature-related risks are increasingly disrupting supply chains
Retailers are already feeling the supply chain impacts related to nature (for example, drought impacting yields, flooding, water levels in canals, etc.). If products are delayed from hitting the market, this leads to higher costs and potentially lower revenues.
Tip: Use these nature-related events to demonstrate the interconnection between protecting and restoring nature and the commercial performance of their business.
Challenge 4: Measuring impact and benefits is holding us back
There are significant benefits to businesses of protecting and restoring nature, including mitigating risks to supply chains such as flooding or drought, plus wider societal benefits of enabling communities to spend more time in nature. However, these are hard to measure and need more consistency across different organisations.
Tip: Join forces with other organisations to support the development of standards for benefits of nature initiatives, similar to the GHG protocol for carbon, to capture the wide array of benefits to businesses and society. This should encourage further inward investment in nature projects.
Challenge 5: Insurance to protect and restore nature is under-utilised
Some of the world’s most important ecological and natural assets are increasingly being protected through parametric insurance, including coral reefs and wetlands, where claims payments support restoration and mitigation against further problems. Insurers can also incentivise policy holders to protect and restore nature in return for more favourable premiums.
Tip: The insurance industry could do more to showcase the impact it can have through specialist insurance and innovative policies that support nature protection and restoration.
Embrace nature as a key business strategy
Regulators and organisations are starting to pay more attention to nature. But we need to keep this momentum going, focus on outcomes, and collaborate to create the conditions for more investment and attention to nature.
We are passionate about helping businesses tackle the big challenges and embrace change in a way that enables long term success.
