As the northern hemisphere moves into spring, it is the time of the year to celebrate Earth and rejuvenation. Everyone has experienced the feeling of calm, relaxation and awe after spending some time in nature.
Each year, we celebrate Earth Month in April to raise environmental awareness and encourage solutions and transitions to a more sustainable way of living that is not extractive but regenerative.
Those of us working in corporate sustainability also keenly understand the inextricable linkage between nature, the economy, and society, illustrated in the figure below from the “Recommendations of the Taskforce for Nature-related Financial Disclosures“.
Ecosystem services include a large number of benefits we rely on from nature, including the water cycle that generates rain and snow and provides fresh water for our lakes and rivers; pollination for agriculture and all plant-based products we use; wood, honey, and coffee; and natural landscapes and wildlife that we can all enjoy and that are essential for our well-being.
In this article, we examine corporations’ role in preserving nature and the business benefits from this undertaking.
Five Drivers of Nature Change
Climate Change: The warming of the planet, rising sea levels, and changing weather patterns disrupt growing cycles, alter habitats, change migration patterns, and can lead to biodiversity loss. Greenhouse gas emissions are the primary contributors to climate change, and emission reduction and removal are the tools available to mitigate climate change.
Land/freshwater/ocean use change: Human activities like agriculture, urbanization, and deforestation are deteriorating natural landscapes and making them unable to regenerate. This leads to habitat loss, biodiversity challenges, and disruption of ecological processes that provide ecosystem services that benefit society. Urban planning, reforestation, regenerative agriculture, rewilding, conservation, and restoration are some pathways available to reverse the degradation of these resources.
Resource use / Replenishment: Overconsumption of natural resources through overfishing, depleting mineral resources, and deforestation through overlogging are destroying ecosystems faster than they can regenerate. Reducing consumption and using circularity principles can mitigate waste generation and resource depletion.
Pollution: Chemical runoffs from agricultural and manufacturing nonbiodegradable waste, such as plastic, contaminate land and water and degrade habitats. Recycling, reusing, and proper waste treatment mechanisms can help reduce pollution and restore ecosystems.
Invasive species: The introduction of non-native species, intentionally or accidentally, disrupts ecosystems and reduces ecosystem resilience. Being aware of native species intentional about growing natural species, and avoiding invasive species can prevent ecosystem disruption.
Taskforce for Nature-related Financial Disclosures (TNFD)
Whether it is explicitly recognized or not, nature-risks are sitting in the cashflows, balance sheets and capital portfolios of organizations across sectors and geographies today. The TNFD endeavors to provide guidelines and recommendations for companies and financial institutions to measure and report these risks and implement cost-affective action to mitigate these risks.
Because TNFD follows a similar structure as the Taskforce for Climate-related Financial Disclosures (TCFD), companies can take an integrated approach to assessing and reporting on climate and nature related risks. The four pillars of TNFD disclosures are:
- Governance: Disclose the organization’s governance of nature-related dependencies, impacts, risks and opportunities.
- Strategy: Disclose the effects of material nature-related impacts, risks, and opportunities on the organization’s business model, strategy and financial planning.
- Risk and Impact Management: Describe the processes used by the organization to identify, assess, prioritize, and monitor nature-relate dependencies, impacts, risks and opportunities.
- Metrics and Targets: Disclose the metrics and targets used to assess and manage material nature-related dependencies, impacts, risks and opportunities.
Making a business case for nature
Understanding the following issues will help make the business case for nature:
- The economic and financial value of nature;
- Risk management and mitigation needs;
- Commercial opportunities driven by innovation and increased resilience; and
- The long term viability of business models.
The LEAP Approach (Locate, Evaluate, Assess and Prepare)
TNFD provides a four-phase approach to implementing the framework:
- Locate: The Locate phase of LEAP encourages organizations to filter and prioritize potential nature-related issues using three filters: sector, value chain and geography.
- Evaluate: During the “Evaluate” phase, the organization develops an understanding of the organization’s potential material dependencies and impacts on nature, including a list of environmental assets and ecosystem services.
- Assess: In this phase, the goal is to identify and prioritize risks and opportunities from the assets and ecosystem services identified in the previous phases and integrating these risks into business strategy and planning.
- Prepare: In this final stage, the learnings from the previous phases are used to set targets and plan actions and are shared with stakeholders.
The Local and Immediate Context of Nature Change
While climate change is a global issue, land, water and ocean use change, resource use and replenishment, pollution and biodiversity changes are local issues and felt directly and immediately by the local population. This provides drivers that are more immediate and dear to people.
In today’s world, motivating and uniting people and inspiring action to preserve nature is more straightforward than combatting climate change. People can see and are aware of water shortages, pollution, and the loss of green spaces and their impact on our daily lives. These immediate challenges create a sense of urgency that climate change, with its long-term and often abstract nature, sometimes struggles to evoke. By focusing on the preservation of nature, we can tap into the natural concern people have for their immediate surroundings, motivating them to take action now for a healthier future.
