World Economic Forum: Building a net-zero, nature-positive economy
The World Economic Forum was held in the last week of January, with its online format transforming it into an event accessible to everyone. Here we summarise the session on ‘Building a net-zero, nature-positive economy’, which featured a range of high-profile speakers from all the major societal sectors.
– Making peace with nature is the defining need of the 21st century. The top 5 risks to humanity identified in the Global Risks Report 2020 were environmental. This year’s Global Risks Report 2021 emphasizes how environmental degradation interacts with societal fractures such as risks to health, unemployment digital divides, youth disillusionment and geopolitical fragmentation.
– There is growing awareness in governments of the importance of nature for supporting society, as well as its potential for providing green jobs, which are greatly needed in the COVID-recovery phase.
- For example, Pakistan is expanding protected areas, creating jobs through tree planting, and – propelled by the Dasgupta Review – is in the process of valuing its national natural capital, viewing nature as an asset rather than a commodity. According to the Federal Minister of Climate Change in Pakistan, Malik Amin Aslam, if nature is valued appropriately, then policies should become nature-positive as a result.
- Similarly, the EU Recovery Plan has a strong focus on green strategies. The Green Deal and Biodiversity Strategy will: a) revise the sustainable finance strategy, including improving the quality and scope of non-financial disclosures, b) improve ‘green claims’ on products, enabling customers to make better informed decisions on purchases, c) improve approaches to measuring biodiversity through the EU Business and Biodiversity Platform, and d) work with companies on using natural capital and biodiversity approaches on the ground.
– Awareness of the dependence of the private sector on nature is also growing, with many companies taking significant steps to support rather than degrade the natural environment.
- Many major corporate boards are now understanding the importance of assessing, valuing, and accounting for companies’ impacts and dependencies on nature and how this relates to financial risk.
- There are several business coalitions that are leading the way on integrating nature into business decision making, such as Business4Nature, One Planet Business for Biodiversity, and the Value Balancing Alliance. However, support and engagement from all businesses and across all sectors is needed.
- It needs to become the norm for companies to report their progress on meeting nature conservation and greenhouse gas emission targets on a regular basis, alongside reports on profits and market shares. These metrics should enable consumers and shareholders to direct companies towards sustainable practices.
- To upscale investment in nature – including from pension and insurance funds – there needs to be increased clarity on how revenue will be made. Investors will also need to look at returns over much longer timeframes than has been conventional.
- Private companies should be responsible for minimizing their environmental impacts throughout their supply chains. This can be done with a self-funded model, where a self-imposed taxation is reinvested back into nature, as suggested by the agricultural company RGE. This requires the private sector to go outside their comfort zone.
– Nature-based solutions can be implemented by companies, but they must involve long-term relationships with local communities that enable local and Indigenous people to be the stewards of projects and direct beneficiaries.
- Natura (known as The Body Shop in the UK) is an example of a company taking the right steps. This cosmetics company has worked with local communities in the Amazon for 20 years to preserve forest, paying full respect to local knowledge. They currently work with 30 communities, protecting 1.8 million ha of land.
– Collaboration between the public and private sectors is crucial for enabling finance to flow to green projects and nature-based solutions. This is especially prudent given that many companies have been financially weakened and destabilised by the pandemic.
– Concern was raised that voluntary carbon markets could distract from the need for fundamental changes in how the economy functions, inducing changes in trade and finance, relocalisation of supply chains, and changes in behaviour including reduced global meat consumption. The Executive Director of Greenpeace, Jennifer Morgan, called for immediate action to protect and support local communities, without using offsets.
– There are four key global conventions this year: on climate change, biodiversity, desertification and food. It is expected that targets will be set for 2050 by nations and corporations; however, it is critical that near-term action plans are made for how to reach such targets, as well as targets to be made legally binding.