Nature risk rising: Why the crisis engulfing nature matters for business and the economy
This report is for policymakers, companies, investors and civil societies seeking to address the growing nature crisis, as it provides the economic and social impact of biodiversity on businesses. The report also calls for a change in policies and practices that drive current growth models.
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OVERVIEW
This report provides an overview of the pressing issues around biodiversity and its impact on businesses while urging the economic world to reshape its responses to fashion a nature-positive economy. The report presents the evidence for the accelerating rate of biodiversity destruction and recommends a fundamental change in the policies and practices that have driven much of the current growth model.
The nature emergency
This section focuses on the nature crisis, outlining the environmental costs of economic growth that have led to significant biodiversity loss, the underlying drivers of this loss, and the non-linear risks of nature loss. The authors highlight the urgency of taking action on biodiversity loss, not just in moral and ethical terms, but in a way that is financially material for stakeholders and businesses.
The hidden risks of nature loss for business
This section highlights the potentially catastrophic fallout that businesses face due to nature loss. It outlines three key factors from which risks emerge- dependency of business and supply chains on nature, fallout of business impacts on nature, and impacts of the nature loss on society.
Managing nature-related risk
This section acknowledges that businesses must manage nature-related risks, much in the same way they are dealing with climate risks. It encourages businesses to identify, assess and disclose potential financial impacts from nature through financial materiality. The report elaborates on how businesses could go about aligning nature-related risk with existing categories of risk and developing a risk-management approach for nature-related risk. It proposes adapting a fit-for-purpose approach for nature-based risks into existing core enterprise risk-management processes.
Moving to action on nature-related risks
The report proposes that businesses, investors, and policymakers incorporate nature risks through a robust risk-management process to assess nature-based risks, along with developing metrics and targets for monitoring material nature risks.
It suggests that the next step is to identify the areas in which strategic transformation of current business models and production processes can contribute the most to halting and reversing nature loss, and the ways to finance this transformation. As the trend for greater transparency and accountability continues, costs are likely to rise for businesses that have not begun to include nature at the core of their enterprise operations.