Special Edition: Nature and Biodiversity

Welcome to the latest Friday 5 Special, our occasional series where we do something a little different and take a deep dive into a sustainability topic, bringing you clarity on what’s going on and an analysis of what it means. We send these out from time to time when we feel we have something important to say, and the Friday 5 you know and love will be in your inbox as usual next week.

This edition of Friday 5 hits inboxes as delegates from governments, corporations, industry and NGOs are gathering in Cali, Colombia, at #COP16 to discuss the mobilisation of resources to support global action on biodiversity. Discussions have been underway to chart nations’ progress on commitments since the last biodiversity COP in 2022, looking at the National Biodiversity Strategies and Action Plans that countries published before the start of this conference. Ultimately, the decisions made at COP16 will shape our planet’s future. In this special, we look at why nature and its biodiversity is so essential to businesses, how to use nature to set your business apart from the competition, and where to get started.

In our letter from the editor we set the scene, and make the case for nature positive business strategies

1. If you want some facts and figures, we look at the scale of human impact on nature, and how we are all – from individuals to businesses – dependent on flourishing ecosystems
2. Interested in the business case? We look at the business reasons for getting up close and personal with your business’s nature-related impacts, dependencies, risks and opportunities
3. If you are wondering what a nature-positive business would look like, we have the answers
4. Here, we look at how a nature-positive business needs to consider the impact on people, as well as on planet
5. If you’re ready to start , we have put together some practical guidance and advice to help you get going

Still have questions? We have put together some definitions and links to make sure you know your ecosystem services from your nature-related dependencies

Letter from the editor

Conversations about nature remind us of conversations about climate ten years ago. Everyone knew there was a problem, and that “something needed to be done”. Some companies were starting to take serious, concerted action but most were waiting to be told what to do – by customers, by investors, by governments. For nature, that moment is here, and the time to act is now.

Today, around half of UK businesses have some form of carbon foot-printing approach in place, measuring their greenhouse gas emissions and developing carbon reduction strategies, and a smaller but fast-growing number have set a net zero target and developed a climate strategy to support that. However, a nature positive business strategy is still the preserve of a small number of dedicated leaders. Just 3 in every 100 businesses in the UK is currently monitoring its nature and biodiversity impacts. And a recent study from the World Benchmarking Alliance found that of 816 companies globally, only 5% had conducted studies to assess their impacts on nature and less than 1% understood the way in which their businesses depends on nature.?

The Global Biodiversity Framework (GBF) has been key to driving business action. It has defined a global vision of halting and reversing biodiversity loss by 2030 and living in harmony with nature by 2050, comprising four long-term goals and 23 short-term targets. Target 15 of the GBF specifically calls on governments to ensure that “transnational companies and financial institutions monitor, assess, and transparently disclose risks and impacts on biodiversity through their operations, portfolios, supply and value chains.” Individual governments are beginning to take the GBF and translate it into new national-level action plans. This may include the development of, for example, new legislation and policies for businesses to ensure the effective implementation of Target 15. The GBF provides concrete policy direction, setting goals for biodiversity conservation, restoration and sustainable use, in a similar manner to the way that the 2015 Paris Agreement shaped action on climate change.

And business is changing in response – a combination of better tools to help think through nature impacts (largely built on the lessons from a decade of corporate carbon strategies), increasing emphasis being placed by regulators and governments on nature disclosures, and a growing understanding of the benefits of taking nature seriously, means the tide is turning. We explore some of these in this special edition. We also look at why you should act, examining not just the risks of failing to act but also the value it can create when you do, to your business and to the world.

So, if you are wondering where to start and what to do, this special edition of Friday 5 is for you. We’ll start with the good news. Estimates suggest that by shifting to nature-positive models, business could create opportunities worth $10 trillion by 2050. We believe that your business can be better and more successful by engaging with nature and putting it at the heart of your business strategy.

But make no mistake, this is also about risk – failure to act, individually and collectively, will have devastating consequences for life as we know it. But getting it right means leveraging opportunities and being recognised for the contribution you are making, as well as insulating your business from the worst effects of biodiversity loss.

We want to help our clients, whatever their size and sector, and wherever they are starting on the path to a more nature positive future. We often say of climate strategies that if a net zero target isn’t compatible with your business model, then your business model isn’t compatible with the future. And the same is true of nature and its biodiversity.

While we hope that everyone will learn something from this edition of Friday 5, we’ve designed it with this audience – those wondering how to get started – in mind. We wanted to explain some core concepts and approaches in a way that is understandable and that takes some of the mystery out of the journey.

In a complex sustainability landscape, you need experts to help you make sense of how to move forward. Trusted advisors with deep expertise, a passion for transformational change, and the ability to solve your problems rather than just follow a process. At Good Business, we have over 25 years of experience in advising our clients on sustainability and transformation in ways that work for them. As the world changes, we change as well. We are responding to the increasingly complex regulatory landscape, changing stakeholder expectations and new issues and challenges. To do this, we work with trusted partners who share our values and beliefs, and who can leverage their insight and experience in specific domains, while we continue to provide the ongoing strategic advice and ensure that the whole remains greater than the sum of the parts. We would like to thank to our partners, Mishcon de Reya LLP , Biodiversify and GreenTheUK for their support with this Special Edition and for their contributions to our nature-related services.

1. Nature in a nutshell: things you wanted to know but never liked to ask

So, what is nature? Nature is the physical world around us: the oceans, forests, rivers, mountains, and skies. It’s the animals, plants, birds and insects, and the landscapes that support them. As we face the growing threat of climate change, we need a much better understanding of how nature is our greatest ally in addressing climate change, but also integral to our survival. Nature is complex, and our interactions with it create a delicate, often chaotic balance. For example, unlike carbon, which can be tracked globally, nature is unique to each place. The oak tree that thrives in the UK and provides a home to many different species can be an invasive pest in South Africa.

Biodiversity – a term often used interchangeably with nature – is closely related. Biodiversity specifically refers to the incredible variety of life on Earth - the plants, animals, fungi and organisms - that support all living things, including us. Biodiverse ecosystems underpin everything we need to survive: food, clean air, water.

For years, we thought of protecting nature as a charitable endeavour, something for NGOs to champion while the rest of the world focused on business as usual. Today, we’re waking up to a harsh reality: biodiversity loss isn’t just an environmental issue, it’s a direct threat to our survival. 75% of global food crops rely on insects for pollination to some extent. 70% of cancer drugs are derived from natural or nature-inspired sources. And over two billion people directly depend on wood for fuel. Nature is the very foundation for our existence.

But biodiversity is more than just a resource; it’s personal. It connects us to the natural world in ways that are deep and emotional. Perhaps it’s the forest you hike in, the garden your grandparents nurtured or the wildlife that captivated you as a child. We all have stories about how nature moves us, inspires us, or calms us. These stories matter, but they are under threat.

Despite its importance, nature and biodiversity is declining faster than ever due to human activity. A staggering 66% of oceans are under strain, and 85% of wetlands have been lost. Over 40% of insect species are currently at risk of extinction globally with populations declining at a rate of around 2.5% a year. And very recently, a report from WWF found that there has been a decline of 73% in the observed population sizes of 5,495 vertebrate species between 1970 and 2020. Humanity, though representing only a tiny fraction of all living things by weight, has caused huge destruction—leading to the loss of 83% of wild mammals and half of all plants since the dawn of civilisation. The world is at a critical point. Science tells us that we must reverse this loss by 2030, which will require swift and decisive action by businesses, individuals and governments.

And this is not just a problem in distant pristine ecosystems or the rainforests and coral reefs that we associate with the natural world and its wonders. Nature and biodiversity matters in cities, where trees and green spaces offer much needed shade and clean air, provide leisure opportunities essential for physical and mental wellbeing and support effective drainage and reduce flooding.??

2. Does money grow on trees?: the business case for a nature strategy

Adopting strategies that align your business with nature rather than working against it can reduce risks and unlock value, for your business and for the world. There is good reason to act now. In Europe, a wave of incoming regulation – Corporate Sustainability Due Diligence Directive (CSDDD), Corporate Sustainability Reporting Directive (CSRD), European Union Deforestation Regulation (EUDR) - will force businesses to identify their nature-related impacts, dependencies, risks and opportunities and act on them. In the UK, thanks to net gain regulations like Biodiversity Net Gain (BNG), businesses investing in new developments must enhance, rather than deplete, nature through their investments. But it makes business sense as well.?

First, consider nature-related risks and dependencies. Depleted soils, polluted waterways, and collapsing food chains all signal impending crises for businesses that depend on ecosystem services. Estimates suggest that around 55% of the world's GDP is either highly or moderately dependent on nature. These risks manifest physically (e.g., deforestation raising timber costs), legally and regulatory (governments imposing penalties), transitionally (companies failing to adapt to sustainable practices facing higher costs like carbon taxes), and reputationally.

All sectors will eventually feel the effects of climate change and biodiversity loss. Even the tech sector – not the first industry that comes to mind when thinking about the natural world – is heavily dependent on nature, while having significant impacts on it. Extreme weather events, fuelled by declining biodiversity and ecosystem health, can lead to service disruptions, operational downtimes, and reputational damage. Furthermore, tech companies contribute to environmental degradation, exerting pressure on water resources to cool data centres, altering land use, and generating e-waste.

Seeking a more positive lens? Nature-related opportunities abound. These opportunities are the activities that create positive outcomes for businesses and nature, either by reducing negative impacts or contributing to restoration efforts. They often involve transforming business models, products, and services to halt or reverse nature loss through Nature-based Solutions (NbS). A report published last week by Lloyds Banking Group and the RSPB highlights successful NbS projects across the UK. It states that globally, NbS can offer up to 50% cost savings compared to grey infrastructure, generating $250 billion annually.

An effective nature strategy can manage impacts and mitigate risks but also tap into new opportunities, enhancing resilience, building stakeholder trust, and reinforcing sustainability goals. This approach opens new markets, and means companies are better positioned to manage regulatory risks, boost brand value, and attract talent and customers alike. It also acknowledges that not all actions are equal: businesses should consider the mitigation hierarchy when setting nature strategies, a set of prioritised steps that focus first on avoiding negative impacts, then consider minimisation and restoration, and finally encourage offsetting (although these should be a last resort).

Although many companies remain at the early stages of their journey, those which are further along have started preparing for their Taskforce on Nature-related Financial Disclosures (TNFD) and building a picture of their nature impacts across their supply chains and operations to start making decisions. Companies like TetraPak have set targets for increasing biodiversity through nature restoration, enhancing water security and promoting a secure and sustainable food system, as well as looking outside their value chain to restore land in the Araucaria region of Brazil.

3. Going green:?what would a nature positive business look like?

Seeking some inspiration from businesses that are making a positive impact on nature, and contributing to a nature-positive future? Then you’re in the right place!

A nature-positive business is a business that has done the work needed to understand, map and assess its nature-related impacts, risks, dependencies and opportunities. It will – of course – have a net zero strategy, but this strategy will recognise the relevance of nature to delivering a net zero future, ensuring that its climate solutions protect, rather than damage, nature. Such businesses promote ecosystem restoration across their value chain, using regenerative agricultural practices, renewable or recycled materials, and circular economy principles. Renewable energy, waste reduction, and pollution minimisation are also integral to their operations, driving sustainability throughout their processes.

Take McCain’s regenerative fries. By partnering with potato growers, the business is taking an ecosystem-based approach to farming to?help improve soil health, boost biodiversity?and make farms?more resilient. It also seeks to reduce agro-chemical impact and optimise water use, paving the way for a nature-positive future.

In the same vein, in 2017, Patagonia established Regenerative Organic Certified, a holistic agriculture certification encompassing pasture-based animal welfare, fairness for farmers and workers, and robust requirements for soil health and land management. Organic farming means no synthetic pesticides, fertilisers, genetically modified organisms, antibiotics or growth hormones. In addition to this, Patagonia have supported farmers to grow cotton using Regenerative Organic Certified Practices and incorporated recycled cotton into its raw materials whenever possible, reducing CO?e emissions by 82% per kilogram compared to conventional virgin cotton fibre.

Elsewhere, Microsoft is funding projects that apply AI to protect biodiversity, optimise farming through precision agriculture and monitor wildlife. In the property sector, Canary Wharf Group has partnered with the Eden Project to create Eden Dock, designed as a “place for nature and people” that will bring people to the area and provide them with opportunities to enjoy leisure activities that work in harmony with, rather than against, nature.

Finally, Notpla, short for "Not Plastic," is capitalising on consumer interest in sustainable solutions by making nature an integral part of its core product. Notpla produces food packaging containers using seaweed and other natural materials which benefit nature both through the growth of the materials used to make the containers and in the packaging’s end-of-life, when they break down to become food for other living organisms.

It is still early days, but we are starting to see some good examples of how companies are integrating nature into their businesses by managing their nature-related impacts, dependencies and risks while capitalising on the opportunities it presents. We expect to see more sophisticated and integrated nature strategies evolve over time – so it might be time to start thinking about yours!

4. People-positive: the social side of protecting nature

Protecting nature means finding solutions that balance environmental goals with social equity. Businesses need to think about their impacts on the environment but also how biodiversity loss impacts communities whose livelihoods and ways of life depend on natural resources. Indigenous and rural populations are particularly affected, facing the loss of essential resources like food and water, as well as the erosion of cultural traditions. And urban populations also rely on nature to make cities healthy and liveable, particularly in a fast-warming world.

So, while businesses look to address and manage environmental challenges, they should do so with an eye to the human impacts. Safeguarding ecosystems goes hand in hand with safeguarding communities. From food security to shelter, humans – especially those most at risk – rely on healthy ecosystems for survival. Just as the net zero transition relies on making sure that our path to a low carbon future considers the impact on people, efforts to protect biodiversity and future-proof business operations should also ensure social equity and fair access to resources are at the heart of any strategy.

The GBF emphasises the need for a more holistic approach, considering how business actions impact both people and the planet. This shows up in regulations like the CSDDD and CSRD, which highlight the link between nature conservation and social responsibility. Beyond compliance, initiatives like the Science-Based Targets Network (SBTN) are encouraging businesses to set nature-related targets that also support local communities. ?

Involving indigenous and local communities in solutions is critical. These communities manage 80% of the world’s remaining biodiversity and play a crucial role in sustaining it. Yet, they are often excluded from decisions that affect their lands, livelihoods, and cultural practices. The principle of Free, Prior, and Informed Consent (FPIC), ensures that Indigenous and local communities are consenting to, and involved in designing biodiversity projects from the start. Furthermore, Intellectual Property Rights (IPR) and Access and Benefit Sharing (ABS) are key concepts for businesses to consider in their interactions with indigenous communities.

Forward thinking companies such as Acciona are embedding new generation rights into their sustainability and human rights policies, recognising the relationship between the two. Rio Tinto, which has been heavily criticised in the past for its impacts on nature and the environment, is setting up projects that use local knowledge and stewardship to deliver conservation goals and restoration projects. And the Body Shop, which has long emphasised the role of communities in nature, is now using Community Fair Trade recycled plastic. This plastic is collected from the streets of Bengaluru in India, providing an income and fair working conditions to those who take part, and addressing a problem that has significant environmental and social consequences.

Without appropriate engagement with the people who are most affected, even well-meaning initiatives can end up doing more harm than good. Conservation programmes that displace communities or restrict access to resources can have long-lasting social and economic impacts. Inclusive approaches are not just fair, they’re essential for long-term success.

Governments and frameworks alike encourage companies to assess their full impacts, ensuring biodiversity efforts don’t come at the expense of vulnerable communities. Businesses will soon be pushed beyond token consultations? by new regulation, embedding community rights and knowledge into their strategies. By putting this approach at the heart of their nature strategies, they can create genuine shared value – good for them, good for ecosystems and good for the people most affected.

5. Ready to go? Where to start with your nature journey

Where to start? This is a question we often hear from clients. And while developing a nature and biodiversity strategy may sound daunting, there are plenty of tools and resources available to help. The alphabet soup of guidance and frameworks is confusing, but the principles that underpin them are simple – identify the issues, assess the scale, and set, manage and report on your strategy and targets. Each business will approach the task slightly differently, but the pathway from understanding to action to communication remains the same.

Chances are that your business may already be doing more work in this area than you think. You may have given thought to your water use, your sourcing and how you deal with waste. These actions will help inform and support the development of the nature strategy for your business.

The first thing to do is to locate your nature impacts and dependencies and understand the risks and opportunities. This means working out where in your value chain you have direct and indirect impacts and dependencies on biodiversity, land use, water resource use, pollution and carbon emissions. It also means understanding how nature-related impacts and dependencies create risks and opportunities for your business. Tools such as ENCORE, the WWF Biodiversity Risk Filter, or the SBTN Materiality Screening Tool allow you to see what your impacts are likely to be before you start the deep dive assessment. The deeper assessment then involves evaluating and assessing your unique material impacts and dependencies based on your specific activities and geographies and working out the size and scale of these. We find that a lot of this information is already available to businesses, either through the work they have done to develop a carbon strategy, or through other mechanisms. This information will then support you to plan the actions you take, and the targets you set, as well as how you will communicate this.

If you want guidance on setting targets and reporting, the TNFD (currently a voluntary framework but likely to be adopted by governments around the world in time) provides guidance on disclosures, while EU companies will have to align to the requirements of CSRD. TNFD encourages businesses to report on governance processes, their impacts, dependencies, risks and opportunities and the actions they are taking to manage or address these. TNFD also relates the nature-related issues to business strategy and the metrics and targets that are used to monitor progress.

Along the way, you will need to think about how you bring your colleagues, senior leaders, suppliers, communities and customers with you. You will need partners and champions, as well as a willingness to collaborate and innovate, to make the most of the opportunities this presents to the business.

If you’re not sure how or where to get started, there is plenty of guidance and help available. We’ve linked to some essential resources at the end of this special edition, and you’ll find plenty more online. Whether you want to identify your nature-related issues, navigate the new regulations or work out how to maximise the nature-related opportunities available to your business, we are here to help.

For more information about our services, contact our Managing Partner, David Lourie, at [email protected]?

Nature Explainer: Key terms

Access and Benefit Sharing (ABS) describes how genetic resources are accessed and how the benefits from using them are shared between the countries or people that provide the resources and those that use them.

Biodiversity is the variety of all living organisms on Earth, including animals, plants, fungi, and microorganisms, as well as the ecosystems they form.

Biodiversity Net Gain (BNG) is an approach to development. It makes sure that habitats for wildlife are left in a measurably better state than they were before the development.

Ecosystem services are the benefits that humans receive from healthy ecosystems, including:

1. Provisioning services: The products or energy outputs obtained from ecosystem services including food, energy and raw materials.
2. Supporting services: For example, nutrient cycling, soil formation and pollination.
3. Regulating services: Ecosystem benefits that act as regulators, such as carbon sequestration, local climate and air quality, moderation of extreme weather events, eco-disasters like bushfires, floods and landslides, and disease regulation.
4. Cultural services: Recreation and mental and physical health, spiritual and cultural benefits, a sense of place and belonging.

Free, Prior, and Informed Consent (FPIC) is a specific right recognised in international law that allows Indigenous peoples to give or withhold consent to projects that may affect their lands, territories, or resources. It ensures that their participation in decision-making is voluntary and based on a full understanding of the potential impacts of proposed projects.

Intellectual Property Rights (IPR) are legal rights that give creators the power to control how, when and where their work is used.

Mitigation hierarchy is the sequence of actions to anticipate and avoid, and where avoidance is not possible, minimise, and, when impacts occur, restore, and where significant residual impacts remain, offset for biodiversity-related risks and impacts on affected communities and the environment.

Nature is the physical world around us: the oceans, forests, rivers, mountains, and skies. It’s the animals, plants, birds and insects, and the landscapes that support them.

Nature-positive means halting and reversing biodiversity loss, targeting an overall increase in nature — trees, species, ecosystems — by 2030, relative to a 2020 baseline.

Nature-related impacts: How an organisation’s activities positively or negatively impact nature from the ‘inside-out’. For example, chemical pollution (as a negative), reforestation and afforestation (as a positive).

Nature-related dependencies: How nature positively or negatively impacts an organisation’s immediate financial performance from the ‘outside in’. For example, extreme heat (as a negative), soil fertility (as a positive).

Nature-related opportunities are the activities that create positive outcomes for organisations and nature by avoiding or reducing impact on nature or contributing to its restoration.

Nature-related risks are the potential threats to a business or investor from its impacts and dependence on nature. These can be physical, transition and systemic risks, both shorter-term financial risks and longer-term risks.

Nature-based Solutions (NbS) are?actions to address societal challenges through the protection, sustainable management and restoration of ecosystems.

The Paris Agreement is an international treaty adopted in 2015 under the UNFCCC. Its primary goal is to limit global warming to well below 2°C, with efforts to keep it to 1.5°C, compared to pre-industrial levels. Signatory countries are required to submit climate action plans to reduce greenhouse gas emissions.?

Regenerative practices aim to restore, renew, or revitalise ecosystems. In agriculture, regenerative farming methods rebuild soil health, increasing biodiversity, and improving water cycles to create a positive environmental impact.??

Social equity refers to the fair and just distribution of resources, opportunities, and privileges among all social groups, ensuring that no one is unfairly disadvantaged.

Nature Explainer: Key resources

Accountability Framework Initiative (AFI) helps companies establish or support ethical supply chains. ?

Business for Nature is a coalition of businesses and conservation organisations created a series of ‘high-level business actions on nature’.?

Corporate Sustainability Due Diligence Directive (CSDDD) is a proposed EU directive that will require large companies to identify and mitigate adverse environmental and human rights impacts in their operations and value chains. It aims to enforce corporate responsibility for due diligence, ensuring that businesses actively work to prevent violations related to climate change, biodiversity loss, and human rights abuses.

Corporate Sustainability Reporting Directive (CSRD) is an EU regulation that requires companies to report detailed information on how sustainability issues affect their performance and impact. It expands on the existing Non-Financial Reporting Directive (NFRD), ensuring transparency around corporate sustainability practices, covering topics like environmental and social impact, governance, and human rights.

ENCORE (Exploring Natural Capital Opportunities, Risks, and Exposure) has been developed by the Natural Capital Finance Alliance to help businesses and financial institutions assess their exposure to natural capital risks. It links economic activities to the environmental services they depend on, enabling users to understand how environmental degradation could affect business performance.

European Union Deforestation Regulation (EUDR) is a European Union initiative that aims to reduce the number of commodities and products associated with deforestation and forest degradation that enter or leave the EU market.?The EUDR came into effect in June 2023.

Global Biodiversity Framework (GBF) is an international agreement adopted under the Convention on Biological Diversity, aimed at halting biodiversity loss by 2030 and restoring ecosystems by 2050. It includes four long-term goals and 23 short-term? targets for protecting biodiversity, sustainable use of natural resources, and equitable sharing of the benefits from biodiversity conservation.

Integrated Biodiversity Assessment Tool (IBAT): provides site-specific information on proximate threatened species and critical habitats.

It’s Now for Nature provides a helpful Nature Strategy Handbook.

Natural Capital Protocol provides a framework for companies to identify, measure and value their direct and indirect impacts and dependencies on natural capital.?

Partnership for Biodiversity Accounting Financials (PBAF) provides financial institutions with practical guidance on assessing and disclosing the biodiversity impacts and dependencies of their loan and investment portfolios. ?

Science-Based Targets for Nature (SBTN) provides companies with guidance on setting measurable and science-based targets to reduce their impact on nature, such as protecting biodiversity and conserving ecosystems. The framework helps businesses align their strategies with global goals for biodiversity conservation and restoration.?

SBTN Materiality Screening Tool helps companies identify and prioritise the most material nature-related issues in their value chains. It enables businesses to focus their efforts on the areas where they have the most significant impact on biodiversity and ecosystems, ensuring that targets are meaningful and actionable.?

Taskforce on Nature-related Financial Disclosures (TNFD) is a global initiative that provides a framework for companies and financial institutions to assess, manage, and disclose nature-related risks and opportunities (through the LEAP approach). The aim is to integrate biodiversity and nature-related risks into financial decision-making.

WWF Biodiversity Risk Filter is a corporate and portfolio-level screening tool to help companies and investors prioritise action on what and where it matters the most to address biodiversity risks for enhancing business resilience and contributing to a sustainable future.

Strong opinions on something we’ve said? Ideas of what you’d like to see covered in future special editions??

We’d love to hear from you!?

Get in touch at [email protected], or head on over to our LinkedIn page to join the conversation.?

For more information about our services, contact our Managing Partner, David Lourie, at [email protected]