5 reasons why CEOs must care about safeguarding nature

.jpeg

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Akanksha Khatri, Head, Nature and Biodiversity Initiative, World Economic Forum


  • A new series – the New Nature Economy reports – is being launched to make the business case for safeguarding nature.
  • The first, Nature Risk Rising, explains why nature-related risks have direct relevance for business through their impact and dependency on nature.
  • Here are five key lessons from that first report.

At the World Economic Forum’s Annual Meeting in Davos in January this year, there was unprecedented interest in and commitment to fighting the climate and nature emergencies facing humanity. Although the world’s 7.6 billion people represent just 0.01% of all living things by weight, humanity has already caused the loss of 83% of all wild mammals and half of all plants. Supporting the concept of stakeholder capitalism, leading CEOs, government leaders and heads of civil society organizations came together in the Swiss Alps to galvanize support for an integrated nature action agenda across the issues of climate, biodiversity, forests, oceans and sustainable development.

Despite increasing attention on the topic of nature loss, there is still limited understanding on how nature loss can be material to businesses and what the private sector can do to address this challenge. The World Economic Forum is launching a series of New Nature Economy (NNE) reports in 2020, making a business and economic case for safeguarding nature. Nature Risk Rising, the first of the NNE series, aims to show how nature-related risks are material to business and why they must be urgently mainstreamed in risk-management strategies.

Here are the five key lessons from the Nature Risk Rising report:

1. Economic growth has come at a heavy cost to natural systems

The economic growth model of the 19th and 20th centuries has brought remarkable development and prosperity. Globally, we produce more food and energy than ever before. The human population has doubled, the global economy has expanded four-fold and more than a billion people have been lifted out of extreme poverty.

However, we have caused great harm to the planet. Three-quarters of ice-free land and 66% of the marine environment have been altered and 1 million species are at the risk of extinction in the coming decades, mostly due to human activities.

2. Five direct drivers are responsible for 90% of nature loss

Five direct drivers of change in nature have accounted for over 90% of nature loss in the past 50 years. Namely, land-and-sea-use change, natural resource exploitation, climate change, pollution and invasive alien species. These five drivers ultimately stem from a combination of production and consumption patterns, population dynamics and other human activities.

There is often a dissonance between economics and earth system science. While present economic frameworks see nature as an externality, nothing could be further from the truth. The global economy is embedded in Earth’s broader ecosystems and is dependent upon them.

When focused on measuring progress against the single indicator of gross domestic product (GDP), we risk failing to recognize and prevent the loss of our ecological foundations.

3. Nature loss is often hidden

Nature is often hidden or incorrectly priced in supply chains, blurring the link between nature loss and the bottom line. There are three ways in which the loss of nature creates risks for businesses:

i. Dependence of business on nature: Businesses depend directly on nature for their operations, supply chain performance, real estate asset values, physical security and business continuity. Our research shows that $44 trillion of economic value generation – over half the world’s total GDP – is moderately or highly dependent on nature and its services, and is therefore exposed to risks from nature loss. Together, the three largest sectors (construction, agriculture, and food and beverages) that are highly dependent on nature generate close to $8 trillion of gross value-added (GVA). This is roughly twice the size of the German economy.

ii. Fallout of business impacts on nature: The direct and indirect impacts of business activities on nature loss could trigger negative consequences, such as losing customers or entire markets, costly legal action and adverse regulatory changes. Consumers and investors are becoming increasingly aware of the environmental damage caused by industries and are demanding action. Companies that stay at the forefront of this shift in consumer consciousness and preferences stand to benefit.

iii. Impacts of nature loss on society: When nature loss aggravates the disruption of the society in which businesses operate, this can in turn create physical and market risks. For instance, the degradation and loss of natural systems can affect health outcomes. The onset of infectious diseases has been connected to ecosystem disturbances, including the strong links between deforestation and outbreaks of animal-transmitted diseases such as Ebola and the Zika virus.

Five direct drivers of nature loss have accelerated since 1970
Five direct drivers of nature loss have accelerated since 1970
Image: Nature Risk Rising report

4. A risks framework for nature

As the global community works towards transitioning to a nature-positive economy, an urgent reframing of the financial materiality of nature risks is required. The climate change agenda leveraged the Task Force on Climate-related Financial Disclosures (TCFD) framework to tackle this issue. Over 870 organizations – including companies with a combined market cap of over $9.2 trillion and financial institutions responsible for assets of nearly $118 trillion – have signed up to support the TCFD. A similar initiative – that draws lessons from the TCFD and which is backed by public and private stakeholders – is now needed for nature.

5. Business as champions for nature

As we are facing an unprecedented planetary emergency, businesses have an important role to innovate and advance solutions for a nature-positive economy and society. Some economies have shown how nature and business can work hand in hand. Costa Rica, for one, has in the last three decades stopped tropical deforestation, doubled its forest cover and reached near 100% renewable electric energy while GDP per capita has tripled. By realizing how nature-loss is material to their operations and growth models, businesses can and must be a key part of the solution. As the trend for greater transparency and accountability continues, costs are likely to rise for businesses which have not begun to include nature at the core of their enterprise operations. The World Economic Forum along with key partners and constituents will be furthering a business for nature mobilization to halt biodiversity loss and invest in nature over the coming years. The next steps are to identify the areas where strategic transformation of current business models can contribute most to halting and reversing nature loss, and the ways to finance this transition.

Please reach out to Alexia.Semov@weforum.org if you want to learn more about the New Nature Economy report series and engage in the process.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Here’s how tech can help governments fight corruption

Khashoggi trial in Saudi Arabia falls short of independent, international probe needed: UN rights chief

Mobile technology saving lives: Changing healthcare systems with simple technology solutions

Tuesday’s Daily Brief: Venezuela-Colombia baby breakthrough, Italy piles on rescue boat pressure, States must combat hate, Kashmir rights latest and a musical plea to combat CAR hunger

Climate change will force us to redefine economic growth

This AI can predict your personality just by looking at your eyes

Northern Ireland: Parliament wants to secure post-Brexit regional funding

UN launches Facebook Messenger-powered bot to take on climate change

Keeping cool in the face of climate change

‘Favour dialogue’ over violence, UN chief urges all parties following clashes in Mali’s capital

Building climate resilience and peace, go hand in hand for Africa’s Sahel – UN forum

Being blinded by labels stops social change. Art helps us see a better future

Here’s why upskilling is crucial to drive the post-COVID recovery

UN, African Union make significant joint commitment to global health

Protecting refugees in Europe: UNHCR calls for a ‘year of change’

Yemen: UN envoy asks Security Council for more support ‘to move back’ to the negotiating table

Is the EU denying its social character favouring a banking conglomerate?

UN rights chief Bachelet appeals for dialogue in Sudan amid reports ‘70 killed’ in demonstrations

How the US should react to the pandemic, according to Bill Gates

One million facing food shortages, nutrition crisis after Mozambique cyclones: UNICEF

4 ways Africa can prepare its youth for the digital economy

UN agencies launch emergency plan for millions of Venezuelan refugees and migrants

Do doctors need to know their patients’ sexual orientation and gender identity?

The next 48 hours may change the European Union

The UK referendum has already damaged Europe: even a ‘remain’ result is not without cost to Britain and the EU

Mali facing ‘alarming’ rise in rights violations, warns UN expert

A European Discovers China: 3 First Impressions

5 things to know about African migration

MWC 2016 LIVE: GTI shifts to phase two – 5G – after hitting milestones

If we want to solve climate change, water governance is our blueprint

Minsk “ceasefire” leaves more doubts than safety, with EU already planning steps further

Trade: First year of the EU-Japan Economic Partnership Agreement shows growth in EU exports

Electronic Cigarettes: Are they really as safe as we think?

UN and African Union in ‘common battle’ for development and climate change financing

Parallel downfalls of Merkel and Deutsche Bank threaten Germany and Europe

For video game addiction, now read official ‘gaming disorder’: World Health Organization

A new proposal breaks the stalemate over the Banking Union

To Brexit, or not to Brexit…rather not: 10 Downing Street, London

AI can be a game-changer for the world’s forests. Here’s how

What young people can teach world leaders about mental health in 2020

How can you or your organization support the Hour of Pride initiative?

Why do humanitarian crises disproportionately affect women?

Russia and the West to partition Ukraine?

Uzbekistan wins its long fight against malaria, as global rates continue to rise

Clean air is good for business

These are the world’s 20 most dynamic cities

Making the most of the Sustainable Development Goal 3: its overlooked role in medical education

Capital transaction tax on Ecofin table

International Women’s Day 2019: more equality, but change is too slow

An all-out fight for the EU budget

World Digital Media Awards winners announced at WNMC.19 in Glasgow, in association with The European Sting

Millennials (and Gen X) – Here are the steps you should take to secure your financial future

Forget GDP – for the 21st century we need a modern growth measure

David Attenborough’s worried about this ocean threat – and it’s not plastic

Is this the way to finally beat corruption?

80 adolescents a day will still die of AIDS by 2030, despite slowdown in epidemic

UN ceasefire monitoring chief tours Yemeni port of Hudaydah

DR Congo elections: ‘historic opportunity’ for ‘peaceful transfer of power’ says Security Council

Consumers’ rights against defective digital content agreed by EU lawmakers

Parliament mobilised to channel EU funds to those affected by Coronavirus pandemic

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s