Our world is on fire — and business must help put it out
As world leaders gather in Davos for the World Economic Forum’s Annual Meeting, Cristianne Close, WWF Markets Practice Lead, and Margaret Kuhlow, WWF Finance Practice Lead, call on business to take the lead in tackling the climate and nature crises.
Recently, there have been some promising moves by business on climate change and nature loss. The new Davos Manifesto calls for a better kind of capitalism which engages all stakeholders in ‘shared and sustained value creation’. And just last week, BlackRock struck a decidedly stronger tone on climate change.
These are welcome commitments but must lead to action — especially given world leaders discussing climate change in Madrid last month accomplished almost nothing, with big emitters blocking efforts to reduce emissions and doing a grave injustice to the two billion people most vulnerable to climate breakdown.
While the catastrophic fires in Australia continue to burn, such political inaction is looking increasingly reckless as investors scrutinize climate risks and voters turn their backs on fossil-fuel friendly politicians.
For the first time, the top five risks in the World Economic Forum’s annual Global Risks Report are all environmental. And in another new report, Nature Risk Rising, the Forum warns the global economy is alarmingly exposed to the risks of nature loss, while WWF and PwC argue in their report, Nature Is Too Big To Fail, that financial market instability will only increase with climate change and nature loss reinforcing each other.
Reasons for hope
We cannot achieve sustainable development and beat climate change without protecting nature, and vice versa. Compared to business as usual, climate-smart growth could deliver at least $26 trillion in economic benefits to 2030, while more sustainable agriculture, combined with forest protection, could deliver over $2 trillion a year.
Despite political failings, Madrid saw positives from the private sector. 631 institutional investors managing $37 trillion in assets called for delivery on the Paris Agreement in the Global Investor Statement to Governments on Climate Change, accelerating private investment in the low-carbon transition. The Net-Zero Asset Owner Alliance, a group of investors managing more than $4 trillion in assets, invited more investors to its carbon neutral portfolio cause. A pioneering consortium launched the Dutch Fund for Climate and Development investing in nature-based solutions that help developing countries build climate-resilient economies.
Commit
While many recognize the intrinsic link between the climate and nature crises, nature-based solutions currently only receive about 2.5% of public climate financing, and there are many opportunities for the private sector to commit, act and advocate for nature.
Through the Science Based Targets initiative, over 750 companies have already set emissions reduction targets in line with climate science. And with the development of the Science Based Targets Network, companies can join Danone in committing to address impacts on the environment to restore balance to nature.
Act
Solving the crises requires action — addressing risk and opportunities, scaling sustainable value chains, stimulating community enterprise, and harnessing innovation.
Using the WWF Water Risk Filter, companies and financial institutions can respond to water-related risks and opportunities. In India, for example, a country highly susceptible to water scarcity, and where as much as 4.5% of GDP could be at risk annually due to rising temperatures, banks can realize commercial value by financing assets that help mitigate water risk, not least through ‘green’ infrastructure such as watershed management and wetlands conservation that helps improve availability and quality.
Just 100 companies could prevent roughly ten million metric tons of plastic waste, and our partnership with leading companies on the ReSource: Plastic platform is enabling them to turn commitments into meaningful action across sectors and supply chains.
Companies can also double down on efforts to end deforestation and land conversion by investing in key production landscapes and developing scalable solutions in line with the Accountability Framework.
At a local level, investing in community enterprise is key. In the Lake Naivasha Basin, an important wetland and Kenya’s horticultural hub, an EU-funded initiative is helping farmers adopt sustainable practices and access international markets.
And OpenSC, an innovative blockchain-based supply chain traceability and transparency platform launched last January by WWF and BCG Digital Ventures, promises to unlock top- and bottom-line benefits for businesses committed to protecting nature.
Advocate
With governments this year taking key decisions on the environment, climate, and sustainable development in New York, Kunming and Glasgow that will set the agenda for the next decade and beyond, we need a united business voice calling for decarbonization of the global economy and an end to nature loss.
The private sector has begun to drive change but without greater ambition from national governments, there is only so much progress we can make. Business leaders must act and demand action.
Through the Business for Nature coalition, business can catalyze a New Deal for Nature and People — one that creates a thriving ‘nature economy’ driven by a dynamic public-private approach, and that incentivizes the protection and restoration, rather than destruction, of natural systems on which the future of enterprise depends.
Good intentions are welcome but government and business will be judged on how they act, and how effective those actions are in delivering prosperity for all on a healthy planet. It is time we put out the fire.
This article first appeared on Business Green.
