Putting nature and biodiversity loss on the business agenda

How protecting nature and introducing nature-positive strategies can lead to innovation, job creation, and improved resilience to future shocks

The business community still has a long way to go to fully embrace this issue:

Of the 350 global companies assessed by the World Benchmarking Alliance in October 2023, “the overwhelming majority do not yet really understand how they affect and rely on nature”(1).

Business leaders should no longer ignore their companies’ dependencies and impacts on #nature. Nature’s condition is central to how #society functions as well as how businesses across industries operate.

Transformational change is now necessary

As such, the business community should account for #naturalcapital in both long-term planning and everyday practice. To do so requires a?nature strategy, beginning with acknowledging how #nature and natural resources are embedded into business operations and then incorporating consideration for #biodiversity impact into practice in much the same way as organizations have adjusted to incorporate climate impact into business plans.

There are real opportunities for businesses that lead the transition to a nature-positive growth economy, in new products, markets, business models, and revenue streams(2).?In fact, from every metric that matters to the future of a thriving society, a nature-positive #strategy delivers value.

If we pivot our efforts to nature-positive business models now, it could create 395 million jobs by 2030 and US$10 trillion of global GDP growth (3).

But the headwinds to change are strong, and moving forward demands both commitment to nature-positive transformation and the funding to make it happen—and effort isn’t cheap.

There is currently a US$711 billion average annual funding gap between what analysts estimate the world needs to spend to reverse biodiversity loss and what it will actually spend per year from 2020 to 2030 (4).?

That’s why it’s so important for business leaders to embed the value of #nature as central to #goodgovernance, not only mitigating significant risks but also looking to take advantage of overlooked opportunities (5).

How does nature impact the economy?

A diverse, healthy, natural world is necessary for our personal health, livelihoods, and well-being because strong wildlife and natural ecosystems contribute to a robust economy, diverse food products, and advancements in medical research (6).

#Biodiversity plays a fundamental role in maintaining the health, productivity, and stability of the many natural systems on which all life on Earth depends (7).?

Just as diversity within a portfolio of financial assets can reduce risk and uncertainty, a robust, balanced array of natural assets within ecosystems helps enable #nature to be productive, adaptable, and resilient to shocks (8).

Natural capital is an approach that considers nature within an economic context, one in which natural assets such as forests and oceans provide a range of ecosystem services that represent economic and social goods (9).?

Think of natural capital as a concept along the lines of produced capital (roads, buildings, and factories) and human capital (health, knowledge, and skills) (10).

The types of ecosystem services that nature provides to the economy and society can be largely categorized into one of four (4) types:

1. Provisioning:?Nature gives humans ways to keep themselves fed, clothed, and sheltered.
2. Regulating:?Nature does many things to make our planet livable, from holding back storm surges to capturing carbon and filtering air and water.
3. Cultural:?Nature plays a central role in religious and spiritual traditions.
4. Supporting services:?Nature provides the building blocks of biology, physics, and chemistry—and the processes and institutions built on them (12)

Why is nature a business issue for companies across industries?

The natural world is irreplaceable. A vibrant, vital natural world is necessary for our health, livelihoods, and well-being. Industries draw on nature and depend on healthy ecosystems.

Human economic activities are driving both #biodiversity loss and climate change, which mutually reinforce each other (14).?When human activities produce greenhouse gases, around half of the emissions remain in the atmosphere, while the land and the world’s oceans absorb the other half. These ecosystems—and the wide range of life forms they contain—are natural carbon sinks, providing nature-based solutions to sequester carbon dioxide and prevent further climate change (15).

Global warming is thereby damaging the earth’s ecosystems and impairing their ability to absorb carbon (16). ?

while the impacts of the global economy continue to destroy nature: 32% of the world’s forest area has been lost, along with 50% of the coral reef systems,(17)?and more than 85% of wetlands (18).?

The business risks of a loss of biodiversity and nature are tangible and severe, including rising commodity prices, job losses, and resource shortages such as disruption to access to critical minerals and metals.

The hazards to humanity are broader: Losing habitat, landscape, and species compromises water supply and quality, food supplies, and more, could force migrations of animals and citizens and potentially threaten economic development, trade agreements, equality efforts, and peace between nations (22).

Approximately half of the world’s GDP depends moderately or highly on nature—and without which it would be impossible to sustain the other half (23).?

Which industry activities are having an impact on nature and biodiversity loss?

Industries draw on natural resources, and humans’ unsustainable use of land, water, and energy is contributing to nature’s decline resulting in a mass extinction.

Experts believe we are witnessing the sixth mass extinction in the planet’s 4.5 billion-year history (25).?Of the world’s estimated 8 million species of plants and animals, 1 million are threatened with extinction, many within decades (26).?

Four major value chains— drive more than 90% of human-caused pressure on global biodiversity (30).?

1.???? Food,

2.???? Energy,

3.???? Infrastructure, and

4.???? Fashion.

Humans have converted half of the planet’s habitable land to agricultural use, more than three-quarters of that for livestock (31). ?

Agriculture is responsible for 90% of global deforestation and accounts for 70% of the planet’s freshwater use (32).

Are there business benefits to developing a nature strategy?

Yes. And likely far-reaching benefits to future generations as well.

Rethinking business strategies and models to be #naturepositive—on the way to reimagining the entire global economy—can offer real opportunities for new business models, job creation, and improved resilience to future shocks.

A World Economic Forum report identified annual nature-related business opportunities worth US$10 trillion that could create 395 million jobs by 2030 (49).

Sustainable economic development likely requires the business community to take a different path, one that engages with nature as a valued partner, whose health enhances our collective wealth and the well-being of our children (55). ?

The complementary goals of “net-zero emissions by 2050” and “net-positive biodiversity by 2030” represent a shift toward a more sustainable development model that can help guide us toward a safer future for humanity (56).

Nature technology

Another core area where more investment should be considered is in #nature technology.

The current nature tech market size is approximately?US$2 billion and is estimated to triple?over the next decade (67).?

Though still comparatively small, the emerging nature tech could help create trust to adequately fund nature-based solutions and help close the massive funding gap between what’s needed and what’s currently available (68).

Nature tech encompasses any technology that can be applied to enable, accelerate, and scale up nature-based solutions. Such technology falls into four broad categories (69):

• Deployment?technology aims to alleviate the challenges that nature-based solution practitioners face; examples include drone-based technology to aid reforestation efforts?and?interventions to help farmers boost crop yield and livestock productivity.
• Monitoring, reporting, and assuring?refers to the process of measuring and reporting climate, biodiversity, and social benefits, with companies using technology such as satellite monitoring, LiDAR,?and?eDNA testing.
• Transparency?makes visible natural assets’ ownership, with blockchain making carbon transactions and registries secure and transparent.
• Connection?includes mobile apps aimed at connecting local communities to higher-paying markets, with the goal of helping to make use of natural ecosystems sustainable.

How can businesses begin to establish and meet nature-positive goals?

Start today and focus on building a solid foundation for your efforts.

It may seem like a daunting task to understand the connections, impacts, and mitigation measures, but it is critical for businesses to begin their journey to establish and meet nature-positive goals (87).

The #TNFD’s disclosure recommendations offer a road map for organizations looking to change their orientation to incorporate a nature focus; Among the most significant guidance, the LEAP approach helps guide organizations on how to assess and manage nature-related issues (88).

Where can businesses access support with developing a nature strategy?

There are a range of stakeholders, advisors and frameworks to help support companies on their journey.

Although most companies are still building their #biodiversity and #nature programs, a range of stakeholders—including investors (76) —are urging them on. Nature-positive targets are likely to become core business benchmarks alongside carbon emissions targets, and leaders working to meet growing expectations to assess, disclose, and address their impacts and dependencies on #biodiversity. The most important step is for businesses to begin their journey to establish and meet nature-positive goals (77).

About the authors

This article is based on the Deloitte Center for Integrated Research, authored by:

James Carlo Cascone Kristen Sullivan Stephanie Cárdenas Derek Pankratz and Nassim Geraili supported by Scott L. Corwin Rebekah Cheney Max Krasilovsky Nabarun Sengupta Adam Samazin Sydney Hicks Sam Riemer and David Novak.

This objective of this article is to raise further awareness of the importance of putting #nature and #biodiversity on the business agenda.

Please do feel free to contact any of your 德勤 contacts, including: Anthony Gaughan Anne-Marie Malley Tom Harris Anne-Claire van den Wall Bake - Dijkstra Ivan Kukhnin Daniele Strippoli Katherine Lampen Matthew Guest Simon Brennan Steve Farrell Jessica Hodges David Rakowski Ido Eisenberg, CFA Priyank Patwa William Mitchell Isha Gupta Amirah Khan Florence Arke James Milner and Yasmin Abbaspour

All sources cited are readily available in the Endnotes of the original research published by our Deloitte Center for Integrated Research LINK.

<END>