New nature economy report II: The future of nature and business
This report provides an applicable agenda for businesses to contribute to the development of practical roadmaps that address the most important drivers of nature loss and build a nature-positive future. It is the second part of a three-part New Nature Economy Report series.
Please login or join for free to read more.
OVERVIEW
This report is split into three sections; the first detailing the most pressing business-related threats to nature, the second the key socio-economic transitions needed to tackle the nature crisis and lastly the enforceable, supporting and coherent enabling mechanisms needed to catalyse change at scale.
Despite the slowdown created by COVID-19, we are reaching irreversible tipping points for nature and climate. This report emphasises the role of post-COVID stimulus packages focused on green projects for building future-proof, resilient societies operating within planetary boundaries. The report details fifteen essential systemic transitions across three socio-economic systems: the food, land and ocean use system; the infrastructure and the built environment system; and the extractives and energy system.
The food, land and ocean use system represents almost US$10 trillion of global GDP and up to 40% of employment. Due to the impacts of climate change, the sector’s hidden costs are estimated to be US$12 trillion, exceeding its contribution to global GDP. Six transitions are recommended:
- Reducing the footprint of agriculture and fishing industries while restoring degraded ecosystems
- Shifting towards productive and regenerative agriculture
- Building a healthy and productive ocean
- Transitioning to sustainable management of forests
- Moving towards planet-compatible consumption that shifts away from the overconsumption of resource-intensive foods
- Creating transparent and sustainable supply chains to ensure stakeholders make informed decisions
The infrastructure and built environment system generates 40% of global GDP. Between 2000 and 2012, there has been an increase of 66% in urban land area. The report suggests five socio-economic transitions that place this system on a pathway to sustainable, nature-positive development:
- Prioritising a compact built environment in existing and new cities
- Shifting towards nature-positive infrastructure design, drawing on nature for temperature and lighting requirements
- Constructing planet-compatible urban utilities to reduce airborne and waterborne pollution and waste
- Protecting nature as infrastructure to build resilience to extreme weather events
- Implementing nature-positive connecting infrastructure to be used for the transport links between urban areas, reducing the need for personal assets
While the extractives and energy system generates 23% of global GDP, it also produces negative externalities of air pollution and carbon emissions equivalent to 10.5% of global GDP. The business opportunities associated with setting this system towards nature-positive development include the creation of 87 million new jobs by 2030. Four key transitions within this sector include:
- Rapidly scaling circular and resource-efficient models of production
- Encouraging nature-positive metals and mineral extraction
- Supporting sustainable materials supply chains
- Transitioning away from fossil fuels and toward renewables
Finally, four ways businesses can catalyse change:
- Identifying the relevant transitions and the role they can play in supporting them.
- Adopting and implementing appropriate voluntary corporate policies and best practices regarding their impact on nature and promoting these policies and best practices among stakeholders.
- Exploring potential public-private cooperation opportunities across sectors.
- Determining the mix of enablers that would unlock success – including new capital investment and Fourth Industrial Revolution technologies.
KEY INSIGHTS
- This report identifies sectors affected by nature loss and the need to scale finance to work towards nature-positive outcomes. Businesses can take practical actions to turn these opportunities into reality by working with governments and civil society to set the agenda, push the transitions forward and accelerate policy reforms.
- There is no future for business as usual – we are reaching irreversible tipping points for nature and climate, and over half of the global GDP, US$44 trillion, is potentially threatened by nature loss.
- Due to human activity, almost 1 million species are at risk of extinction. According to World Economic Forum’s 2020 Global Risks Report, biodiversity loss and ecosystem collapse are ranked as one of the top five threats humanity will face in the next 10 years.
- Fighting climate change is essential but not enough to address the nature crisis – a fundamental transformation is needed across three socioeconomic systems: food, land and ocean use; infrastructure and the built environment; and energy and extractives.
- 80% of threatened and near-threatened species are endangered by the three systems, which are responsible for the most significant business-related pressures on biodiversity; these are also the systems with the largest opportunity to lead in co-creating nature-positive pathways.
- 15 systemic transitions with annual business opportunities worth US$10 trillion that could create 395 million jobs by 2030 have been identified that together can pave the way towards a people- and nature-positive development that will be resilient to future shocks.
- US$2.7 trillion per year through to 2030 will be needed to scale the transitions, including deploying the technological innovation critical to 80% of the business opportunity value identified.
- Small and medium-sized enterprises typically lack direct access to capital markets and require smaller average investment size and novel payback models that increase transaction costs and risks. These challenges require innovations in capital investment processes, such as blended finance, new supply chain models and the development of shared service models.
- Costs are likely to rise for businesses in these three systems which have yet to include nature at the core of their enterprise operations. Unless the structural causes are addressed, irreversible climate change, biodiversity loss and other environmental risks that harm the economy and human well-being will only worsen.