How The Synergy Between Nature And Technology Can Help Combat Climate Change And Enhance Our Lives

Hanna Fedchyshyn, the Research Analyst at Ananda Impact Ventures, looks at the major role that Nature Tech has to play in safeguarding the planet, boosting the economy and improving our well-being

In the modern world, many businesses, governments and individuals believe ‘hard’ technology is the sole answer to the most pressing challenges we face. At the same time, the potential for nature-based solutions to solve these challenges tends to be overlooked.

Yet according to research led by The Nature Conservancy and 15 other institutions, natural climate solutions could provide 37% of the cost-effective CO2 mitigation needed through 2030.

The Nature Conservancy defines ‘natural climate solutions’ as conservation, restoration and improved land management actions that increase carbon storage or avoid greenhouse gas emissions in landscapes and wetlands across the globe.

‘Nature-based solutions’ (NbS) is a broader category defined by IUCN as actions to protect, sustainably manage, and restore natural or modified ecosystems, that address societal challenges, simultaneously providing human well-being and biodiversity benefits.

Besides mitigating climate change, natural climate solutions and nature-based solutions have numerous environmental, social and economic benefits as well. They help to protect, maintain and improve biodiversity, improve soil productivity, clean our air and water, protect our health, ensure the livelihood of local communities, create new jobs, and support further economic growth.

In fact, restoration, protection and sustainable management of natural resources and ecosystems are crucial for economic development. According to the United Nations Environment Programme (UNEP), natural solutions to climate change could create 80 million jobs and lift a billion people out of poverty. And according to the World Economic Forum’s Nature Risk Rising Report, more than half of the world’s GDP ($44 trillion) is highly or moderately dependent on nature.

Nature And Technology Working Together

At Ananda, we believe that technological and nature-based solutions should not be seen as mutually exclusive. On the contrary, a synergy between nature-based solutions and modern technologies — such as AI, big data, satellite monitoring, genomic sequencing and drone tech — has the potential to mitigate climate change and biodiversity loss, as well as ensure our livelihood, provide food and water security, prevent the next pandemic of zoonotic diseases like Covid-19, and contribute to the UN’s sustainable development goals.

Technology can increase the transparency, traceability and accountability of nature-based solutions, and in doing so, overcome the lack of trust in their efficiency and enable their wider implementation.

The goal of this article is to highlight to VCs, innovators and policymakers the huge potential of this intersection of nature and technology, which we refer to as ‘Nature Tech’. It provides an overview and market map of this sector, and gathers together by category some of the key start-ups working in this field.

With the estimated potential of nature-positive solutions and policies to generate $10 trillion in new annual business value and create 395 million jobs by 2030, the growing Nature Tech market presents an attractive investment opportunity.

Ananda has already invested in several start-ups in the Nature Tech sector, namely NatureMetrics, OroraTech and Klim. We would like to see more investment activity in this space, and hopefully, this article will contribute to that.

We define Nature Tech as innovations, technological solutions and new business models that help to protect, restore and/or improve the management of natural ecosystems, as well as accelerate the implementation of nature-based solutions contributing to climate change mitigation, promoting biodiversity, strengthening food security, creating new jobs, supporting economic development, and/or providing other environmental and societal benefits.

Technology doesn’t have to just benefit large corporations, but can also be used holistically to create value for all stakeholders. As such, it’s also important to evaluate whether Nature Tech solutions empower local communities, such as smallholder farmers, coastal communities and indigenous people.

The Nature Tech Market Map

On our market map, we’ve clustered the Nature Tech start-up space into four main areas of focus:

1. Biodiversity Protection, Conservation & Restoration
2. Forests
3. Agricultural Lands & Grasslands
4. Ocean, Marine & Coastal Ecosystems

We also looked closely at natural climate solution pathways as defined in the previously mentioned research paper and at the Nature4Climate coalition website.

(To find out more information about the 60+ start-ups featured in our Nature Tech Market Map, please refer to this database)

Biodiversity Protection, Conservation & Restoration

According to the European Environment Agency, biodiversity collectively describes the millions of unique living organisms that inhabit Earth, and the interactions among them. Different species and organisms work together in ecosystems to maintain balance and support life. Humans are dependent on nature for food, clean water, medicines, shelter, recreation, raw materials and more. Therefore, maintaining and restoring the biodiversity of natural ecosystems is crucially important for us and future generations.

Sadly, humans have already caused the loss of 83% of all wild animals and half of all plants, and biodiversity continues to decline globally. According to the Global Assessment Report by the Intergovernmental Platform on Biodiversity and Ecosystem Services, a million animal and plant species are now threatened with extinction. Overfishing of oceans, clearing forests for agricultural use, and polluting water sources are just a few examples of how human activity negatively impacts natural ecosystems and biodiversity.

And of course, human activities have fundamentally increased the concentration of greenhouse gases in Earth’s atmosphere, causing global warming and worsening the impact of other stressors on nature and our lives. Biodiversity loss and ecosystem collapse is one of the top five risks in the World Economic Forum’s 2020 Global Risks Report.

We believe that biodiversity metrics are essential for protecting, maintaining and restoring biodiversity and will lay the foundation for the development of other solutions, technologies and use cases in the Biodiversity sector. Established metrics will enable the development of financing and insurance-related use cases, such as biodiversity offsets, biodiversity credits and biodiversity risk modelling. We can use carbon as a proxy for biodiversity. Seeing how established and mature carbon markets are now, we expect biodiversity to reach this point in the next 2–3 years. We believe that biodiversity data and metrics will be key to the emergence of nature-positive solutions.

Ananda recently invested in NatureMetrics, a nature intelligence start-up that brings a big data approach to biodiversity. It can help companies track, quantify, and eventually predict their impact on nature. NatureMetrics has built a ‘database of life’ on Earth to support companies in extractives, infrastructure, marine, agriculture and conservation industries to manage risks and impacts on the ecosystem. We envision NatureMetrics to become the Google of nature data — a platform for the most accurate biodiversity data to help prevent and reverse biodiversity loss.

As well as Biodiversity Monitoring, the Biodiversity Protection, Conservation & Restoration cluster includes solutions for:

• Biodiversity Financing & Biodiversity Offsets
• Wildlife Tracking & Anti-Poaching
• De-Extinction
• Consumer Engagement In Wildlife Protection.

The above-mentioned solutions help to protect, sustainably manage and/or restore biodiversity.

For example, Biodiversity Monitoring might play a broad role in protection, conservation and restoration of biodiversity. Wildlife Conservation & Anti-Poaching helps to protect biodiversity, while De-Extinction aims to restore biodiversity by resurrecting species that have become extinct.

Forests

Forests are an integral part of the carbon cycle. Besides being an important carbon sink, forests clean our air, maintain and improve water quality, and help to protect critical biodiversity. According to the research, forest pathways offer over two-thirds of the cost-effective natural climate solutions needed to keep global warming below 2 °C, and about half of the low-cost mitigation opportunities. Main forest pathways in natural climate solutions include reforestation, forest fire prevention & management, avoided forest conversion, natural forest management, and avoided fuelwood harvest.

While forests play an important role in climate change mitigation, they are also affected by the changing climate via droughts, extreme weather events, forest fires, and beetle infestation. Therefore, there is an increasing need for Nature Tech solutions that help to support the resilience and adaptations of forests to climate change.

According to the Food and Agriculture Organization of the United Nations, it is estimated that 420 million hectares of forest have been lost through conversion to other land uses since 1990. The main causes of deforestation are clearing forests for agricultural purposes (farming and grazing of livestock), mining, and drilling, as well as wildfires and unsustainable forest practices.

Forest ecosystems are a critical component of the world’s biodiversity, yet deforestation and forest degradation continue to take place at alarming rates, contributing to biodiversity loss. We believe that future reforestation projects — as well as forest management practices and solutions — need a holistic approach that takes into account not only carbon sequestration potential but also the impact on biodiversity and planetary boundaries.

We believe that business model innovations are needed to incentivise the forestry industry, including smallholder forest producers, to apply sustainable forest management practices. Scalable technological solutions that enable the digitalisation of forest data, accountability, traceability and proof of point verification for forest carbon credits will play an important role in the future of forest restoration & sustainable management.

Scalable technological solutions for the digitalisation of forest data will enable accountability, traceability and proof of point verification for forest carbon credits, playing an important role in the future of forest restoration and management.

A good example of a technological solution that helps to protect the forest ecosystem, mitigate climate change and create positive environmental and social impact is our portfolio company OroraTech, which monitors wildfires on a global scale using thermal-infrared satellite imagery. Its solution provides holistic wildfire intelligence that includes forest fire risk assessment, early detection, real-time monitoring and damage analysis. OroraTech’s custom wildfire detection algorithms enable the prevention and containment of severe fires resulting in significant CO2 savings, protection of biodiversity and reduction of human tragedies.

Besides Wildfire Monitoring, the Forests ecosystem market map covers a wide range of other solutions and use cases, such as:

• Deforestation & Afforestation Monitoring
• Forest Health Monitoring
• Remote Forest Inventory
• Sustainable Forest Management
• Supply Chain Transparency
• Automated Reforestation
• Reforestation Credits

The above-mentioned solutions help to protect, sustainably manage and/or restore forests, as well as enable the implementation of natural climate solutions pathways in forest ecosystems.

For example, Wildfire Monitoring & Threat Detection solutions help to protect forests and contribute to the Fire Management pathway of natural climate solutions. Automated Reforestation solutions help to restore forests and enable the Reforestation pathway. Vegetation Intelligence helps to prevent forest fires and enables more cost-effective vegetation management for electric utilities.

Agricultural Lands & Grasslands

Agriculture is the main driver of global deforestation and land conversion, while food systems account for more than a third of global greenhouse gas emissions, making them a major contributor to climate change. Industrialised agriculture is highly reliant on fossil fuel-based fertilisers, pesticides harmful to pollinators and human health, as well as non-therapeutic antibiotics that lead to antibiotic resistance.

Industrialised farming also pollutes air and water, destroys wildlife and costs the environment the equivalent of about US$3 trillion every year. According to the Climate4Nature coalition, most agricultural soils have lost a large fraction of their original soil carbo there is a considerable potential to restore it through better management.

Yet agricultural activities can serve as both sources and sinks for greenhouse gases. Sustainable agriculture practices and solutions provide a far better alternative to industrial farming, having the potential to mitigate climate change by storing carbon, as well as to ensure food security for the growing world population and promote biodiversity. Moreover, even applying technologies to improve current industrial agriculture practices has the potential to mitigate climate change. For example, efficient use of fertilisers can reduce global emissions of nitrous oxide, one of the six principal greenhouse gases.

Our portfolio company Klim is a good example of synergy between technology and sustainable agriculture practices. Klim has created a digital platform enabling and incentivising farmers to apply regenerative farming techniques providing the basis for a successful sustainability transformation in agriculture. ‘Regenerative Agriculture’ describes farming and grazing practices that, among other benefits, reverse climate change by rebuilding soil organic matter and restoring degraded soil biodiversity — resulting in both carbon drawdown and improving the water cycle.

Klim’s solution promotes regenerative agriculture by providing farmers with a digital companion, giving them useful knowledge and enabling them to be awarded for sustainable agricultural practices through carbon removal credits.

Besides Regenerative Agriculture, the Agricultural Lands & Grasslands market map also includes such clusters as:

• Agriculture Data & Analytics
• Precision Agriculture
• Sustainable Crop Protection
• Biochar & Sustainable Fertilisers
• Sustainable Food
• Novel Farming Systems
• Pollinators Monitoring & Management
• Farmers Digital Companion & Community Apps
• Financing for Farmers & Carbon Credits

For example, Regenerative Agriculture helps to protect, sustainably manage and restore agricultural lands. Novel Farming Methods, Precision Farming and Digital Companion App for Farmers help to sustainably manage agricultural lands, as well as improve the efficiency of existing croplands, thus contributing to the Avoid Grassland Conversion natural climate solution pathway. Sustainable Fertilisers will help to sustainably manage agricultural lands while also contributing to the Cropland Nutrient Management pathway.

(Our team is currently working on agriculture research that will include a broader overview of the Agtech ecosystem. Follow us on Medium or LinkedIn to find out when the research results are published.)

Ocean, Marine & Coastal Ecosystems

Coastal ecosystems such as mangroves, tidal marshes and seagrass meadows play important role in mitigating climate change, as they store more carbon per unit area than terrestrial forests. The carbon can remain in the soil for thousands of years, making it one of the longest-term climate mitigation solutions.

Coastal ecosystems are also important for climate change adaptation, ensuring coastal protection and food security for many coastal communities. Degradation of these ecosystems leads to their role as carbon sinks being lost or adversely affected, releasing stored carbon into the atmosphere, and negatively impacting on the livelihood of coastal communities. Hence, the protection and restoration of coastal ecosystems is an important area of nature-based solutions and Nature Tech.

Ocean ecosystems also contain many plants and animals that can help mitigate climate change by removing and retaining CO2 from the atmosphere. For example, marine algae convert upwards of 42 gigatons of CO2 into living plant biomass each year. According to Ocean Conservancy, an ecosystem with a wide variety of marine life and a healthy balance of predators and prey species may also improve the capacity of oceans to absorb, store and reuse carbon. So protecting, maintaining and restoring the biodiversity of marine ecosystems plays an important role in climate change mitigation.

The Ocean, Marine & Coastal Ecosystems market map includes the following clusters:

• Ocean Intelligence
• Seafloor Mapping
• Coastal Protection & Climate Change Adaptation
• Erosion Control
• Digital Reefs and Biomimicry of Mangroves
• Marine & Coastal Ecosystem Restoration
• Regenerative Aquaculture & Precision Fishing
• Marine-Degradable Packaging and Plastic Waste Collection

The above-mentioned solutions help to protect, sustainably manage and/or restore ocean, marine and coastal ecosystems, as well as enable the implementation of natural climate solutions pathways in these ecosystems.

For example, Erosion Control, Digital Reefs and Biomimicry of Mangroves are all solutions that ensure the protection of coastal ecosystems. Regenerative Aquaculture & Precision Fishing helps to protect and sustainably manage marine ecosystems. Marine Degradable Packaging protects marine ecosystems from harmful plastic pollution.

We haven’t invested in start-ups that focus specifically on Ocean, Marine & Coastal Ecosystems yet, although NatureMetrics’ solution includes marine biodiversity data. We are very keen to explore this topic, and this market map is our attempt to dive deeper into the space.

The goal of this article is to start a conversation about Nature Tech in the VC and start-up communities, so your feedback, comments and suggestions are very much appreciated. Do you think that an important cluster, technology or solution is missing? Do you know an interesting start-up working in the NatureTech space, or perhaps you are the founder of such a start-up yourself? Please don’t hesitate to get in touch!