Nature and the boardroom
The Benefits of Integrating Nature into Business Decision-Making
In recent years, businesses have started to recognise the value of integrating nature into their decision-making processes. The growing awareness of the importance of preserving natural capital and ecosystems has led to a shift in corporate strategies and policies. This article explores the benefits of integrating nature into business decision-making, highlighting the importance of understanding and addressing the impacts of business activities on the environment, and the potential positive outcomes for businesses that prioritise nature.
Cloudforest Five on the Dingle Peninsula features 16,000 native Irish trees
Understanding the Importance of Natural Capital and Ecosystem Services
Every business relies on nature for resources and ecosystem services such as water, food, fiber, minerals, pollination of crops, water filtration, and climate regulation, both in their own operations and supply chains, and for their employees and customers. However, nature is at a tipping point. The natural materials and ecosystem services that we all rely on, and that also power businesses, are under massive strain. Without transformative changes in our economy and the way we do business, nature-negative trends such as global declines in species populations and losses in efficiency and efficacy of ecosystem service provision are expected to continue through to 2050 and beyond.
Under current scenarios, over half of the world's total GDP is at moderate or severe risk due to nature loss. The role of business is critical to delivering a nature-positive world by 2030. Building on existing commitments and actions related to nature, businesses should aim to halt and reverse negative impacts on nature and then should aim for their positive impacts to outweigh their negative ones in the same eco-regions or in similar types of ecosystems.
Human Activity and Planetary Boundaries
Human activity has pushed the planet outside a 'safe operating space' on four planetary boundaries: biodiversity loss, chemical and plastic pollution, nutrient pollution, and greenhouse-gas (GHG) emissions. Terrestrial biodiversity loss stands out, at an estimated 2.7 times beyond the planetary boundary as currently understood and 1.4 times beyond 1970 levels.
Another standout boundary is chemical and plastic pollution. We estimate that the world economy currently emits 2.6 times more plastic into water sources each year than it did in 2010, negatively affecting species, ecosystems, and food webs, and reducing the ability of oceans to sequester carbon.
The Role of Different Economic Sectors
Agriculture is the largest contributor to exceeding planetary boundaries, as currently understood. The retail sales and services sector are also major contributors to the nature impact across multiple boundaries, notably chemical and plastic pollution.
Food systems have the most significant impact on the environment: they are the largest contributing sector for five of the nine planetary-boundary control variables assessed. The disproportionate estimated impact of agriculture stems from its direct land footprint and the strong influence of downstream sectors such as the food-processing industry.
Corporate Action to Restore Natural Capital
Corporate action could help set natural capital on a path to recovery by 2050. Our research suggests that companies have the potential to shift the world's trajectory on natural capital and usher in a return to a safe operating space for humanity by 2050. It also suggests that they could do so through a set of targeted actions that use existing technologies and, in many cases, could provide positive returns on investment.
Cloudforests Ceo Bernard Pender Planting a giant redwood on our site in North Clare - Cloudforest Four with Kim Lake
Agriculture and Other Sectors' Contribution to Abating Loss of Natural Capital
Agriculture is the largest contributor to the depletion of natural capital, followed by retail sales and services, and the power sector. Agriculture seems to have the greatest opportunity to address projected overages or gaps in the biodiversity, freshwater, and nutrient planetary boundaries by 2050. Non-agricultural actors can also take actions to address their direct footprints.
Benefits of Integrating Nature into Business Decision-Making
Integrating nature into business decision-making can lead to a range of benefits, including improved corporate reputation, reduced operational risks, and increased long-term profitability. Some of the key benefits include:
Enhanced Corporate Reputation and Brand Value
Companies that actively integrate nature into their decision-making processes and demonstrate a commitment to protecting and restoring natural capital can enhance their corporate reputation and brand value. This can lead to increased customer loyalty, investor interest, and employee engagement, all of which can positively impact a company's bottom line.
An oak tree planted on Cloudforest One by one of our corporate Coolpartners
Reduced Operational Risks
By understanding and addressing the impacts of their business activities on nature, companies can identify potential risks and opportunities, allowing them to make more informed decisions and reduce operational risks. For example, companies that rely on natural resources or ecosystem services can take steps to ensure the long-term sustainability of their supply chains, reducing the likelihood of resource scarcity or disruptions.
Increased Long-Term Profitability
Companies that integrate nature into their decision-making processes can identify new market opportunities and develop innovative products and services that address environmental challenges. By investing in nature-positive solutions, businesses can tap into growing consumer demand for sustainable products and services, ultimately leading to increased long-term profitability.
Steps for Integrating Nature into Business Decision-Making
To effectively integrate nature into business decision-making, companies can follow several key steps:
Assess Nature Footprint: Companies should start by assessing their nature footprint, which includes understanding the types, magnitude, and materiality of their impacts and dependencies on nature. This will provide a clear picture of the company's current impact on the environment and help identify areas for improvement.
Identify Opportunities for Action: Based on their nature footprint assessment, companies can identify specific actions that can help reduce their negative impacts on nature and increase positive contributions. These actions can range from adopting more sustainable production practices to investing in nature-based solutions or technologies.
Set Targets and Develop Strategies: Companies should set clear, measurable targets for reducing their impact on nature and develop strategies to achieve these targets. This may involve setting science-based targets in line with planetary boundaries or committing to internationally recognised frameworks such as the Science Based Targets Network (SBTN).
Monitor Progress and Disclose Results: Companies should regularly monitor their progress towards meeting their nature targets and be transparent about their efforts by disclosing results through reporting frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD).
Collaborate with Stakeholders: Integrating nature into business decision-making requires collaboration with a wide range of stakeholders, including suppliers, customers, investors, regulators, and civil society organisations. By working together, companies can develop more effective strategies for protecting and restoring natural capital.
Enabling Actions from Other Stakeholders
While corporate action is essential, it is not sufficient on its own. Businesses need support from other stakeholders, including governments, investors, and civil society organizations, to create the enabling conditions for integrating nature into decision-making. Key enabling actions include:
Providing a framework for corporate nature efforts, such as standardized reporting requirements and clear guidance on nature actions and outcomes.
Developing and investing in the infrastructure, including data, skills, and opportunities, that can help inform company actions and support the transition to a nature-positive economy.
Expanding financing and incentives for nature-positive actions, such as re-assessing subsidies or creating new financial products that support investments in natural capital preservation.
Join us an make nature part of your business plan
Integrating nature into business decision-making is not only an ethical responsibility but also a strategic opportunity for companies seeking to build resilience and long-term value. By understanding and addressing their impacts on nature, businesses can unlock new opportunities, reduce risks, and contribute to the global effort to protect and restore our planet's natural capital. With the support of other stakeholders and a commitment to transparency and collaboration, companies can play a critical role in delivering a nature-positive world by 2030.
Joining Cloudforests and supporting our mission to create forests for the planet, nature and people is one way your organisation can get closer to achieving your environmental and sustainability goals.
