The authors of this opinion article argue that nature’s economic contributions are often overlooked and business success should include stewardship of nature. Credit: Sergei Karakulov/Unsplash

By Stephen Polasky and Matt Jones
BONN, Dec 11 2024 (IPS)

Sustaining nature is not just an environmental goal—it is an essential component of sustainable business—and requires that we redefine business success to include the wise stewardship of nature.

Nature provides the vital infrastructure that underpins the economy. Nature’s contributions to people, through the economy, include the provision of raw materials necessary to produce everything from our food to components of our mobile phones, and the less immediately obvious but supremely important regulation of environmental conditions, which impact everything from climate and ocean conditions to water supplies and soil fertility.

Nature’s economic contributions, though vital, are often overlooked and undervalued. The rapid expansion of economic activity, without adequate attention to its negative side effects, has taken its toll on nature.

The 2019 Global Assessment Report of the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) found that nature is declining globally at rates that are unprecedented in human history. This decline has led to a rapid increase in species extinctions, climate change and—directly relevant to businesses—major declines in nature’s capacity to sustain contributions to the economy.

The sustained decline in nature’s contributions has become increasingly apparent as a risk to business and society. Critical changes to Earth systems, biodiversity loss and ecosystem collapse, natural resource shortages, and extreme weather events have been consistently rated by the World Economic Forum every year since the Global Assessment was published, among the top risks facing business over the next ten years. These risks were the top four risks of any kind in the most recent ranking.

Continuing with business as usual will only increase these risks and threaten the future success of business and long-term prosperity.

Smart businesses know they are facing a major challenge but often do not have clear plans for how to respond. Knowing what to do to halt and reverse the decline of nature requires solid understanding of the dependencies of business on nature, the ways in which nature supports business and economic activity, as well as the impacts of business on nature, both positive and negative. Most businesses currently lack data and robust tools to evaluate their dependencies and the full scale of their impacts on nature.

This gap has led to a rapid influx of not-for-profit initiatives and a burgeoning industry of private providers, all looking to deliver methods and metrics to help businesses measure their relationships with nature. Many of these efforts have been collaborative. But inevitably—as different approaches tackle different issues for different clients—there has been overlap and duplication alongside gaps and often conflicting advice. Businesses now frequently cite their confusion at the “acronym soup” of initiatives and methods as a major impediment to undertaking effective action.

An authoritative global process, the IPBES Methodological Assessment of the Impact and Dependence of Business on Biodiversity and Nature’s Contributions to People (the “Business and Biodiversity Assessment”), is currently reviewing the state of knowledge on business dependencies and impacts on nature. This first-of-its-kind assessment, informed by scientific research, Indigenous and local knowledge, and industry insights, will deliver a comprehensive review and provide guidance on the best tools and methods to assess business dependencies and impacts on nature. The assessment is expected to be finalized, and its results made public, in 2025.

Guidance will be tailored to fit different business contexts and scales of decision-making. The data and methods useful at the scale of an individual site, taking account of the details of business operations and ecological context at a specific location, differ from those useful for making decisions about value chains or setting corporate strategy. Financial institutions investing in a diverse portfolio of businesses need yet another set of data and analytic tools.

The Business and Biodiversity Assessment will provide recommendations on the appropriate use of data and methods across sites, value chains, corporate, and portfolio levels, helping businesses and financial institutions understand their dependencies and impacts on nature. Doing so will highlight both risks of further declines in nature and the opportunities for business to improve its relationship with nature.

While information is essential, it is not the only necessary element for successfully transforming the relationship between business and nature. Incentives also matter. Current conditions in which businesses operate do not encourage individual businesses to halt destruction or promote the recovery of nature. It is often more profitable for individual firms to continue harmful activities than it is to invest in environmentally beneficial activities.

Governments and the financial sector have a large role to play in reforming policy and investment strategies to better align business interests with larger societal interests of conserving and restoring nature. The Business and Biodiversity Assessment will also provide guidance on the positive roles that governments, the financial sector, and civil society can play in creating actionable pathways for businesses to be positive agents of change in promoting nature recovery.

Engaging with nature is no longer optional for businesses—it is a necessity. Businesses have a critical role in ensuring that global society moves away from continued destruction of nature and moves towards conservation and recovery of nature, which is essential for sustainable development and long-term prosperity.

Note: Prof. Stephen Polasky is Regents Professor and Fesler-Lampert Professor of Ecological and Environmental Economics at the University of Minnesota, specializing in the intersections of biodiversity, economics, and sustainability.

Matt Jones is the Head of Nature Economy at the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC), where he focuses on integrating biodiversity into economic and business practices globally.

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