5 reasons why CEOs must care about safeguarding nature


(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 Milestone

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

3 ways governments can address cybersecurity in the post-pandemic world

MEPs approve new CO2 emissions limits for trucks

Modern humanitarian aid at times of global crises

3 ways activists are being targeted by cyberattacks

World ‘not yet on track’ to ensure children a better future: UN rights chief

Scaling for success: SMEs, tech innovations and the ITU Telecom World Awards 2019, in association with The European Sting

Yemen: Committee brings warring parties to the table in Hudaydah, builds on ceasefire

Students & Allies Unite Globally To Launch #Students_Against_COVID

Iraq needs support to ‘leave violent past behind’, says UN envoy as Security Council extends UN mission for one year

The EU Parliament unanimously rejects Commission’s ideas about ‘seeds’

These airports are now opening their doors to non-fliers

The developing countries keep the world going

UN rights expert ‘strongly recommends’ probe by International Criminal Court into ‘decades of crimes’ in Myanmar

WEF Davos 2016 LIVE: Banking moguls continue brandishing financial Armageddon to intimidate us all but in Davos they worry about the very distant future

4 lessons on human cooperation from the fight against Ebola

Uganda’s Ebola preparedness ‘will go a long way’ says WHO chief

New rules for short-stay visas: EP and Council reach a deal

Africa’s future is innovation rather than industrialization

EU and African leaders to jointly tackle the migration crisis across the Mediterranean

President Michel’s MFF proposal not acceptable for Parliament

Ukraine pays the price for lying between Russia and the EU

Companies that put employees first perform better

Brexit may finally not really happen; The Brits have second thoughts

Indonesia’s imams are joining the fight against plastic bags

Why banks escape from competition rules but not pharmaceutical firms

Statelessness for terrorists’ families, never an acceptable option, urges UN rights chief

Landmark EU Parliament – ECB agreement on bank supervision

Link between conflict and hunger worldwide, ‘all too persistent and deadly’, says new UN report

State aid: Commission approves €300 million public support for the development of ultrafast broadband network in Greece

More capital and liquidity for the banks

‘By no means is this over’: WHO briefing

Why the minutes and the months matter most to young people during the COVID-19 crisis

3 ways to make the 2020s the decade we close the gender gap

International Women’s Day: Where does she belong?

State aid: Commission approves €790 million Croatian guarantee scheme for companies with export activities affected by coronavirus outbreak

On Grexit: Incompetence just launched the historic Ultimatum that could open “pandora’s box”

How the great COVID-19 reset can help firms build a sustainable future

Financing fossil fuels risks a repeat of the 2008 crash. Here’s why

From zero to one: a realist’s guide to overcoming hopelessness

Protests, violence in Haiti prompts international call for ‘realistic and lasting solutions’ to crisis

‘We can use this as an opportunity’ – Ngozi Okonjo-Iweala on how African nations can recover after COVID-19

The Amazon is burning and we’re all watching

Here are 4 ways investors can influence more secure and responsible innovation

EU fight against tax-evasion and money laundering blocked by Britain

The remote doctor, can it ever work?

EU Elections: new rules to prevent breaches of data used to influence elections

ILO and EIB join forces for more and better quality employment

New Iraqi Prime Minister-designate urged to act on reforms and accountability

From social entrepreneurship to systems entrepreneurship: how to create lasting change

UN working ‘intensively’ to stop Ebola in eastern DR Congo, following second case in major border town

Seaweed straws and loose-leaf tea: 6 ways to reduce plastic waste

3 steps to making multistakeholder partnerships a powerful force

Taxation: Commission refers Spain to the Court for imposing disproportionate sanctions for failure to report assets held abroad

Myanmar military target civilians in deadly helicopter attack, UN rights office issues war crimes warning

Commission steps up EU action to protect and restore the world’s forests

Three countries losing ground and one new prime minister

Humanitarian visas would reduce refugees’ death toll

Is Britain to sail alone in the high seas of trade wars?

New citizenship law in India ‘fundamentally discriminatory’: UN human rights office

Sustainable finance: Commission welcomes deal on an EU-wide classification system for sustainable investments (Taxonomy)

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