All businesses depend on nature, and nature can be considered a natural capital asset. The rapid loss of biodiversity puts business resilience at risk, creating a business case to develop plans to take action to halt nature loss. In 2019, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) published a landmark global assessment on biodiversity and ecosystem services, the first major assessment in almost 15 years. It conveyed unprecedented decline around the world of ecosystems on which people and economies depend for goods, services and quality of life. In 2020, the Dasgupta Review on the Economics of Biodiversity revealed the extent to which nature as an asset is not properly managed, necessitating a reconfiguration of how natural assets are valued and managed.
As the 15th Conference of the Parties (COP15) to the Convention on Biological Diversity (CBD) convenes, ambitious and urgent action is needed to protect and restore ecosystems, which are also essential to achieving climate goals. Nature-based solutions designed to ensure biodiversity co-benefits are essential to meeting climate goals.
Business reliance on natural assets requires a risk mitigation framework similar to that required for climate, and in preparation for the COP15 outcome, the Global Biodiversity Framework (GBF) is expected to mandate corporate responses, from materiality assessments to disclosure. There are promising solutions and guidance for businesses to take action.
WBCSD is working with 60 leading companies and partners to develop business guidance on corporate actions to assess, commit, transform and disclose their companies' dependencies and impacts on nature. By taking action now to understand their key impacts and dependencies on nature and start addressing nature loss, companies can reduce risks, strengthen resilience and identify strategic opportunities.
How business impacts nature
Nature and biodiversity are rapidly degrading, with 70% of the world's ice-free land and 66% of marine environments significantly altered by human activities and species populations declining by almost 70% since 1970. More than half of the world's GDP, or US$44 trillion, is at risk of nature loss by 2030.
Three socio-economic systems have the greatest impact on biodiversity loss:
- Food, land and ocean use systems (affecting 72% of species at risk of extinction*) through both agriculture and forestry are leading to deforestation, freshwater depletion, water and soil pollution and habitat destruction.
- In infrastructure and built environment systems (29% of species at risk of extinction), activities are driving degradation of land and seabed, increasing flood risk, and polluting water and soil.
- Finally, in extractive and energy systems (18% of species at risk of extinction), mining and oil and gas activities contribute to habitat destruction, landscape alteration, freshwater depletion and pollution.
Mobilizing for change
Similar to responding to the climate emergency, global systems are mobilizing to protect and restore nature and biodiversity. Global accountability systems for nature include the UN Post-2020 Global Biodiversity Framework, Science-Based Nature Targets (SBTN), Task Force on Nature-related Financial Disclosures (TNFD) and the Global Reporting Initiative (GRI). More information is available in the CEO Briefing. “Measuring the positive impact of business activities on nature”.
Pressures from regulations and reporting obligations, as well as changing investor, customer and consumer sentiment, require companies to act urgently. Yet CDP's 2022 Climate Change Questionnaire found that only around 25% of companies surveyed said they were taking action on nature- and biodiversity-related issues, and only 15% had assessed their impacts.
A recent study by Bain & Company and the World Wildlife Fund (WWF) found three main barriers preventing companies from taking action.
- First, companies are not aware of their impacts and risks: around 60% of companies claim that they have no impact on nature and biodiversity, and more than 50% do not perceive biodiversity loss as a significant business threat.
- Second, companies find it difficult to derive tangible value from their work on nature and biodiversity: for example, only around a quarter of companies say they see business opportunities linked to biodiversity.
- Third, the nature and biodiversity issue is still immature, with a lack of consistent definitions, reporting standards and indicators to guide progress, slowing corporate action.
Yet pioneers have shown that companies that take action can reverse the negative impacts on nature and generate business benefits. The potential economic benefits for companies are now estimated to reach US$10 trillion per year by 2030.
Finding a solution
WBCSD is developing a roadmap for positively impacting nature across three critical systems, using a powerful approach to planning and guiding change to drive transformation deep down value chains.
This structured approach is designed to enable companies to define the role of nature and biodiversity on their corporate agenda and begin taking action on the issues that matter. Four steps – Assess, Commit, Transform and Disclose – enable companies to progress along the maturity curve using data sources, indicators, tools and resources. Value chain-specific guidance has been developed to support implementation based on industry, business and geography, including the identification of significant impacts and dependencies, which will form the basis for commitments and actions and associated disclosures.
What's more, a solution set already exists for big nature breakthroughs that also support other priorities like business success and climate change. Bain highlighted five in separate research:
- Regenerative Agriculture: Transforming agricultural practices to improve both yields and ecosystem benefits.
- A product compatible with nature: Design products and services that avoid raw materials and ingredients that damage nature and limit overconsumption.
- System design that affirms natureIncorporating nature-consciousness into infrastructure and facilities to protect ecosystems.
- Circular material flows and business modelsReduce the impact of extraction by addressing the amount of new resources needed to meet growth.
- High Quality Nature-Based Solutions: Restoring and conserving ecosystems to protect nature and biodiversity while addressing emissions.
The extent to which a given company can adopt these solutions will depend on the socio-economic system and industry in which it operates.
In 2023, WBCSD will work with its members and partners to publish more detailed sectoral action roadmaps incorporating the SBTN and TNFD recommendations. Companies will need to determine how to incorporate these measures into their own strategic decisions and commercial strategies, so that actions that have a positive impact on nature are also good for business.
Integrative and collaborative action for a positive view of nature
The convergence of climate and biodiversity challenges will drive corporate alignment on target setting and reporting as companies assess risks and prioritize actions that support nature-positive, net-zero outcomes. The five solution sets outlined here, if adopted at scale, will contribute to the systems change we need to see and call for investment strategies that integrate climate and biodiversity needs.
Just as accountability was a key theme at the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27), it is expected to be central to discussions at COP15. WBCSD has engaged key member companies in developing a business delivery agenda for COP27. Climate resilience business: Accelerating accountability, ambition and actionThe Agenda will set out interventions to accelerate global decarbonization for businesses and, working closely with governments, will support business leaders to strengthen accountability, raise ambition and take rapid and large-scale action. COP15 will establish that we need to work together, even for nature.
But as with climate issues, business leaders are not simply waiting for government action on biodiversity. Led by WBCSD and developed in collaboration with businesses and key partners such as Capitals Coalition and Business for Nature, the Business Guidance and Nature Conservation Roadmaps provide business ways to accelerate action to restore the natural assets we all depend on. These roadmaps build on existing frameworks such as the Natural Capital Protocol (NCP) and incorporate the use of the SBTN and TNFD. As a first step, businesses can already access the Nature Conservation Roadmap for the forest sector.
During COP15, WBCSD will launch a consultation draft of guidance developed in collaboration with 60 leading companies and partners to complement its series of sector roadmaps: “A Nature-Positive Roadmap: Guidelines to drive corporate accountability, ambition and action towards a nature-positive future.” Interested parties should contact Nadine McCormick, Nature Activities Manager at WBCSD.
Several leading companies have begun to show the way, and now there are promising solutions and guidance to help more businesses follow suit. By working together, businesses can halt and reverse nature loss by 2030 and take action toward a nature-friendly future.
*Note: There is some overlap in species affected by the three systems, so the percentages of species affected by all systems do not add up to 100%. Source: World Economic Forum
