Only business unusual can save us now.
Cristianne Close, WWF Markets Leader, Delfin Ganapin, WWF Governance Leader, and Margaret Kuhlow, WWF Finance Leader, take stock of what the new IPBES Global Assessment on Biodiversity and Ecosystem Services means for business and finance, and propose a reform agenda designed to ensure prosperity and well-being for all.
Red alert for nature
Some of the world’s top scientists have spoken — again. But IPBES’ first Global Assessment on Biodiversity and Ecosystem Services is more than just another warning. It is a siren call that Earth’s natural systems are in the red and that all that we hold dear is threatened.
How we feed, fuel and finance ourselves is pushing nature to the brink. We’re using resources faster than natural systems can replenish them, and the natural capital that sustains our enterprise and prosperity is in severe decline, posing an existential threat.
Agricultural expansion, over-exploitation of forests and fisheries, invasive species, climate change, urbanization, energy use, mining and pollution, are all driving habitat loss, species extinction, and land and marine degradation at unprecedented rates.
Nature loss and climate change are the greatest systemic risks to our global economy, and natural disasters caused by human ecosystem disruption and climate change already cost more than $300 billion per year.
A little less conversation, a little more action
Last month, in fireside chats with financial chiefs at the IMF and the World Bank, the respected broadcaster Sir David Attenborough warned that while it’s obviously ‘silly’ to eat into financial capital, that’s precisely what we’re doing with our natural capital.
And the Governors of the Bank of England and the Banque de France, Mark Carney and François Villeroy de Galhau, called on the financial community to manage the risks of transition to a low-carbon economy and for a ‘massive reallocation of capital’ to prevent global warming above the 2°C maximum set by the Paris climate agreement.
Yet while governments, business and financial institutions are waking up to the macro-economic risks posed by climate change and nature loss, as Einstein allegedly said, insanity is doing the same thing over and over again and expecting different results.
Without action and a dramatic shift beyond business as usual, the pursuit of short-term rewards, and narrow definitions of progress, the natural systems upon which humanity depends will collapse. We need to transform our economic and financial systems, and fast, investing in and restoring rather than using up our natural capital.
Goods and services from our oceans alone are worth about $2.5 trillion. Pollinators contribute at least $235 billion to global food production. And industries such as seafood, forestry, agriculture and insurance could benefit from investing in nature.
For an annual cost of $5–10 billion, conserving marine stocks could increase annual seafood industry profits by more than $50 billion; and protecting coastal wetlands could save the insurance industry $52 billion annually through reducing flood damage loss.
Compared with business as usual, climate-smart growth could deliver at least $26 trillion in economic benefits cumulatively through to 2030, while a shift to more sustainable agriculture, combined with forest protection, could deliver over $2 trillion per year.
And pursuing the Sustainable Development Goals (SDGs) could generate economic opportunities in food and agriculture, energy and materials, cities, and health and well-being worth at least $12 trillion by 2030.
Commit, act and advocate for nature
Individual businesses investing in nature stand to benefit in various ways — from reduced operating costs and improving access to finance, to competitive advantage and future-proofing in a low-carbon resource-constrained global economy.
A threefold approach can help companies step up to the challenge.
First, companies can commit to reversing nature loss and restoring natural systems. While science-based targets for nature are under development, companies can already set greenhouse gas emission reduction targets in line with climate science, conduct risk assessments to manage and respond to increasing water-related risks, and adopt a ‘no regrets’ approach to nature, assessing natural capital impacts and dependencies.
In addition, banks, insurers and investors can adopt policies to protect natural World Heritage sites, employ the new ENCORE Tool to assess and integrate natural capital risks, and implement the recommendations of the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures.
Second, companies can take action for nature, investing in key production landscapes, collaborating for sustainability with peers and regional, national and local authorities, and helping develop scalable ‘solutions’ to nature loss and restoration.
And third, companies can help co-design policy proposals and advocate with WWF and others to shape a New Deal for Nature and People that incentivizes and rewards meaningful investment in natural systems.
For this last, there is a unique opportunity ahead. In 2020, world leaders will take key decisions on the environment, climate, and sustainable development that will set the agenda for the next decade.
And just as a strong business voice helped secure a climate deal in Paris, it could now shape the politics of biodiversity and supercharge global efforts to reverse nature loss and support community development.
A New Deal for Nature and People could create a thriving ‘nature economy’ in scalable, bankable nature-based solutions, driven by a dynamic public-private approach.
Just add system change
As IPBES also makes clear, we need to accelerate ongoing reform of our current economic and financial systems. Ensuring they deliver sustainable and inclusive development, and future-proof enterprise and finance, requires government, business and civil society to prioritize four things.
We must recognize the value of nature and the costs of its degradation, systematically factoring it into our economic and policy decision-making, including adopting measures of progress that go beyond GDP, promoting sustainable production and consumption, and incentivizing circular and regenerative economies.
We must work collectively to reshape the global economy so that it delivers long-term inclusive well-being and prosperity consistent with the SDGs, rather than maximizing short-term income growth and accelerating social inequality.
We must scale business models that build long-term shared value for society, and improve corporate governance so that it strengthens corporate responsibility to customers, clients, employees and communities, as well as to shareholders.
And we must redirect financial and market incentives and regulatory frameworks so that they value natural systems and ecosystem services, and support our economy in realizing the promise of the SDGs — prosperity for all on a healthy planet.
No time to waste
The science of nature loss has never been clearer. And the IPBES report reinforces the urgent need to put in place a New Deal for Nature and People if we are going to deliver the SDGs.
Defining business purpose and finding ways to deliver prosperity and well-being that avoid ever-increasing material consumption, and that promote equality and inclusivity, are central — but unless we also change the rules of the game, our efforts will fail.
Decision-makers have options, and the risks and inevitable uncertainties of transition to sustainability can be reduced through flexible, integrative and inclusive governance.
For companies aspiring to be global citizens, saving life on Earth is a legitimate business goal, and engaging with the global stewardship of nature, the new frontier.
The scale of the crisis we face requires a truly global response. There’s no time to waste. If not us, who? If not now, when?
For more information, please contact WWF.
For more information on the #GlobalAssesment report: lp.panda.org/ipbes