Resource description:
The world faces a global nature crisis. This is creating demonstrable risks and impacts for the real economy, businesses, governments and financial institutions. Various responses to this crisis can be seen. Typically, organisations start by assessing and disclosing nature-related risks and impacts. Many follow this by making commitments to address these. Ideally, this gives way to implementation, action and ultimately transformation, all of which represent critical next steps in the transition to a nature positive economy. Such an economy is vital if we are to meet the global goals for nature agreed in the Global Biodiversity Framework in 2022.
Business models that are aligned with nature positive goals form a crucial part of any economy-wide transition. Such models create, capture and deliver ecological as well as financial value. This ecological value is manifested in the preservation and restoration of ecosystems. Focusing on business models allows the language and logic of the private sector (which is effective at generating financial value) to be integrated with the science of ecology. This combined approach can help unlock the commercial opportunities that arise from a nature positive transition. It can also assist in moving beyond the piecemeal, reactive and ad hoc approach to nature that characterises most current corporate efforts.
Significant challenges exist to the scale-up and integration of new business models. These occur in two main areas: at the organisational level, where corporate governance, decision-making and culture can become barriers; and at the systemic level, where the current primacy of financial value within markets and governments often fails to incentivise or support business models that produce better outcomes for nature.
This report presents several business model archetypes aligned with the nature positive goal. Provided alongside each of these are relevant examples, case studies and methods that demonstrate the nature positive outcomes of these business models. These pockets of excellence point to a way forward, indicating the innovative ways through which individual businesses and entire sectors can deliver more for nature while remaining financially viable. The approach marks a new step along a well-established path to embed sustainability within the processes and decision-making of a business, in this case focusing specifically on outcomes for nature and biodiversity.
Significant as the challenges to scaling up these types of business models may be, they are not insurmountable. With input from businesses and experts, this report identifies a series of enablers. Economic and financial drivers are key to this process, including efforts to refine and develop the business case for nature positive action within businesses. Part of building such a business case is the inclusion of a credible risk-based rationale for action that makes clear the financial value at risk from nature degradation. A second equally important aspect is an opportunity-based driver that demonstrates the financial value that can be created from responsible nature stewardship and ecosystem restoration.
Given the physical and ecological realities of today's nature crisis, keeping with the economic status quo is impossible. One way or other, therefore, the global economy faces a transition. As the economic impacts of nature loss become increasing felt, the question is whether this transition will be chaotic and reactive or whether it will be strategic and proactive. The second option presents the only viable route to creating an economy in which the threat of nature loss is taken seriously. Those businesses that adopt this approach will position themselves at the forefront of this new economy, helping influence its shape as well as reaping its potential market rewards.
Adopting such a proactive approach will require capacity-building within organisations, alongside new organisational structures and governance. This includes embedding nature information, drawn from robust data and metrics, into business decision-making at all levels.
Ultimately, the transition to a nature positive economy cannot be driven by businesses operating alone. The following recommendations would help to drive progress:
- Governments should provide clear and consistent policy and regulations that set nature goals.
- Collaboration between the public and private sectors will be essential to delivering these goals. Given the crucial nature of this kind of supportive policy environment to an orderly transition, businesses can and should play an active role in pushing for it.
- Cross-sectoral and value chain collaboration can help to identify the opportunities, unlock innovation and align around the policy enablers needed in a given sector.
- The financial sector also has an important function here, ensuring that capital is allocated to businesses that are minimising their impact on nature as well as those that are delivering nature restoration.
The A-Track project is helping to deliver many of these enablers. It does so alongside other initiatives across the public, private and voluntary sectors. While there is still much work to do, we hope that this contribution will act as a stimulus to progress. In particular, it is our hope that it will allow businesses and those that support them to adapt their business models so they are fit for a nature positive future.
Author/Contact:
Authors: Anum Yousaf Sheikh and Harry Greenfield (CISL).
Supported by: Edmund Dickens, Eliot Whittington, Sanna Markkanen, Serena Liuni, Adele Williams (CISL), Alison French.