WEF22 discussion - Corporate mindset shift needed when investing in nature

A report by ‘The Money Show’

As the world faces food and energy shortages on the back of climate change, major corporations around the world are committing resources to nature in order to decarbonise the planet. Much of this is in an effort to reach the global goal of net-zero carbon emissions by 2050.

Although the commitment is there, the pace of progress needs to be accelerated. Research shows that if we want to avoid the worst impacts of climate change, the world will have to halve its greenhouse gas emissions by 2030 and completely end them by 2050.

To achieve this, many companies have put measures in place that actively lower their carbon emissions and use more sustainable energy. Some, however, have claimed to be committed to this cause to appear eco-friendly, but haven’t made any real effort – this is called ‘greenwashing’.

The World Resources Institute (WRI) plays a vital role in monitoring forests and keeping track of the ecological efforts made by countries and companies worldwide. By doing this, greenwashing can be investigated, and progress can be tracked for companies that keep their promises.

At WEF 2022, a panel comprising leaders within the nature investment space discussed how corporations currently operate and how they could boost nature-based methods of doing business. On the panel, was WRI’s CEO, Ani Dasgupta.

Dasgupta explained that the goal shouldn’t be solely decarbonisation, but “a decarbonised world that is more equal and also nature-positive”. The global research organisation works with government leaders to research and implement practical solutions improve lives while ensuring that nature thrives as well.

The data provided by the WRI also contributes to better decision-making by companies and governments when crafting plans to invest in nature.

“My only advice to corporates would be to stop looking for a rate of return. Nature takes time. You’ve got to have patient capital,” says Roshni Nadar Malhotra, Chairperson of HCL Technologies Ltd. She also mentions the possibility of using the data from WRI for educational purposes and enticing the youth to get involved in learning about the environment that they will be looking after for years to come.

“I believe that if we can invest in our own people to become a lot more knowledgeable. For example, all the data that’s going to come from WRI – Can we excite young people to actually analyse it [and] study it,” she says.

The panel expanded on how return on investment needs to be redefined when investing in nature, as the results aren’t always monetary. Companies are advised to think less about profit and more about the survival of natural resources.

“If you take a nature-based solutions approach, there’s a chance it will be unsuccessful if you are repackaging it to protect the bottom line that values profit over everything else,” according to Kahea Pacheco, Co-Executive Director, Women’s Earth Alliance.

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Disclaimer: The views and opinions expressed in this article are not the views of Absa.