Nature-based business solutions to the climate emergency: part 1
Written by Tim Greenhalgh
Monday July 29 2019, marked a chilling marker for our planet – it was Earth Overshoot Day.
This is a date we’d all probably like to forget. It’s the day when we have consumed more from nature than the planet can renew in a year.
We know that we have not been the smartest custodians of our world’s resources for quite a while, watching Earth Overshoot Day move from late September in 1997 to this year, three days ahead of 2018’s August 1, the previous dark record.
Broader, bolder global action is urgently needed and two whitepapers just published focus on policies and strategies that may be able to keep this globe spinning sustainably. There will need to be some swift and decisive work but it is achievable.
The whitepapers focus on complementary areas with one looking into the ways that businesses can radically transform their processes while the other looks at how the Restoration Economy can be achieved, using nature-based solutions to tackle the climate crisis.
So, what to do?
The whitepaper from the Global Footprint Network (GFN) and Schneider Electric explores how businesses can achieve “one-planet compatibility” and using this concept as a strategic tool to gauge the “sustainability value propositions” of companies.
In the “Global Case for Business Prosperity”, GFN, the research organisation tracking Earth Overshoot Day, predicts that Earth Overshoot Day will land in June by 2030.
So, in just over a decade, we are going to require two Earths to sustain consumption levels unless things change comprehensively.
The whitepaper points to stress on natural resources, marked by deforestation, soil erosion, biodiversity loss, fresh-water scarcity, accumulating waste and the build-up of carbon emissions.
It bluntly says that companies can tackle the ecological overshoot by improving resource efficiency and security across their operations and supply chains.
And there three solid business reasons for “one-planet compatibility” strategies:
- Expanding markets fuelled by increased customer expectations for transparency and traceability
- Reduced exposure to shrinking ecological resources with volatile flows and prices
- Optimised chances at securing long-term value of assets and financing.
“Moving out of ecological overshoot calls for the kind of creativity, ingenuity, and drive that can only be unleashed through a new type of collaborative conversation between players.
“Technologies and know-hows are readily available to push the date of Earth Overshoot Day back towards December 31st and even beyond.”
The study emphasises the rapidly changing cultural landscapes across the world, noting that awareness of environmental and resource risks is growing.
According to the report:
“Over the last ten years, six or seven of the top-10 global risks identified each year by the World Economic Forum’s ‘Global Risks Report’ have consistently dealt with resource or environmental threats. Step by step, we increasingly see this global understanding of risks translating into concrete business decisions.
“A poll of Schneider Electric’s customers in Europe revealed that 82% of them consider resource scarcity and sustainability as key elements in their decision-making processes. Yet the shift is not happening fast enough.”
As pressures intensify, unsustainable business models are becoming exposed to accelerating risks, and this is not simply confined to the dislocations and crises fuelled by rapid changes in the climate and environment.
The study specifies four areas for business focus:
- Answer growing consumer expectations for transparency and end-to-end traceability
- Protect operations from commodity price volatility and shortage risks
- Plan now to avoid future liabilities and stranded-assets
- Secure financing, with investors who increasingly value transition risks and opportunities.
A recent Deloitte survey shows that Millennials will account for two-thirds of the world population by next year and this will be game-changing because this generation have grown up in a world where information is just a click away.
They demand transparency, check the facts and value opinions from peers and influencers.
The whitepaper says:
“With a strong sense of purpose they are accustomed to asking “Why?” Millennials aspire to sustainable lifestyles more than previous generations. The rapid surge of #Fridays4Future, the youth protest movement for climate action, originally inspired by Swedish high-schooler Greta Thunberg and positively received by all generations, as shown in shifting electoral choices, is a sign of possible acceleration.”
As an adjunct to this, generational change also means wealth transfer. Forbes estimates that $30 trillion of wealth – three times the US GDP – will be transferred from Baby Boomers to Generation Xers and Millennials over the next 30 years – the largest transfer of wealth recorded in history.
The study advises that Millennials’ aspirations, both as consumers and investors, are bound to shape financial markets in the near future.
Direct business impact
Just one recent example of how Millennials can drive rapid change that has significant business impact is the #Fridays4Future movement that mobilised youth across the globe. The “flygskam” trend, attributed to Greta Thunberg’s no-flight policy, was one factor in a 15% decrease in air travel in Sweden in April 2019 compared to the previous year.
So companies must respond to changes in consumer landscapes and a range of other pressures if they are to survive and thrive.
The whitepaper has a strong focus on energy and so it highlights areas where the date of the overshoot can be pushed back by at least three days – through infrastructure retrofits for buildings and the uptake of low-carbon assets such as electric vehicles (EVs).
It also believes that a digital transformation across industries can push the date by two days, while decentralised, decarbonised and digital power can account for 15 days.
The study says that one-planet compatibility can demonstrate the business sector’s contribution to the Sustainable Development Goals and emphasises the role that legislation can play in driving progress.
Broad examples include the UK’s net-zero target which the researchers predict will probably lead to increased decarbonisation across industries, and In France where a ban on food waste has seen 93% of supermarkets donating unwanted food surpluses, compared to 33% before legislation was set.
Restorative Strategy: nature-based solutions
The second whitepaper, published by the Ethical Corporation ahead of its Transform Summit in Amsterdam on October 16-17, focuses intensively on how a sustainable future can be secured, tackling the climate crisis, through nature-based solutions.
It says that the restoration of natural capital is known as the restoration economy and it is growing fast, according to research by the World Resources Institute and the US Nature Conservancy.
The extensive 28-page report uses fascinating and detailed studies of a wide range of initiatives to promote the case for smart, natural and inclusive business strategies, including degraded land rehabilitation, wild harvesting, biodiversity offsets and innovative water, soil and forestry management.
From private-sector efforts to replenish natural capital by rehabilitating degraded land to water efficiency and re-circulation incentives, forestry harvesting and effective tree-planting projects as well as using the soil to absorb CO2 emissions, there is much to be cheerful about.
At the start it addresses opportunities for investors looking for the next big growth opportunity – trees. Over 25% of the world’s land area has been degraded over the past 50 years, at a cost of over $6.3 trillion a year. Harnessing that resource, through restoration projects and planting trees
The study shows that restoration projects employed 126,000 Americans in 2014, almost 60% more than in coal mining. A 2015 study estimated that the US restoration economy generated $9.5 billion in annual economic output.
One company leading the charge for sustainable, commercial tree projects is Chicago-based EcoPlanet Bamboo. With select species of bamboo, its operations provide a source of timber and fibre for various industries. It also has a wider social purpose to create natural capital projects that will be accessible to smallholders.
In Nicaragua, EcoPlanet Bamboo is planting bamboo on degraded land, rainforest cut down for agriculture, then cattle. A pulping facility will start tissue and toilet paper production next year, reducing reliance on imported goods and it expects to be self-sustaining within 12 months.
Co-founder Camille Rebelo says:
“EcoPlanet Bamboo is creating permanent jobs for communities. These are multi-generational projects. In Nicaragua that [means it is creating jobs for] 90-120 years if managed correctly.
“Bamboo is different to a forestry crop, where you get lots of jobs in the first couple of years, but low levels of employment until you chop. bamboo needs a lot of management in the first five to six years so employment is high on the field level, then onto manufacturing.”
EcoPlanet Bamboo is also piloting a closed-loop biorefinery to make moulded pulp for disposable containers to replace plastics and foam. An agreement with Mantis hotels group means it will move its luxury hotels away from single-use plastics when EcoPlanet’s production is up and running.
EcoPlanet Bamboo also has a plantation in South Africa, where the first product is high-end charcoal for air and water purification systems. Plantations are being developed in Ghana, and in Rwanda, where the government has a strategy to develop a bio-economy.
She says that there is no reason why capitalism shouldn’t be “the driver for environmental and social stewardship”.
As an example of this, a joint venture between Michelin and the Pacific Barito group for “climate smart, wildlife friendly and socially inclusive” production of natural rubber on heavily degraded land in Indonesia has just received $95 million funding from the Tropical Landscapes Finance Facility.
The plantation project should support 16,000 fair-wage jobs when it is mature and the companies have set aside high-carbon value forest, as well as wildlife conservation and wetland zones, working with the WWF.
Eric Raynaud, CEO, Asia Pacific advises:
“While not without its own challenges, this transaction is proof that financial institutions can generate socially beneficial outcomes when we really work hard.
“This complex structuring arrangement also demonstrates that our institutional investor clients have the appetite to invest in projects and companies that combine commercial and financial performance with clear environmental and social purpose and impact.”
According to the International Union for Conservation of Nature, landscape restoration could sequester up to 1.7 gigatons of CO2 every year, which places this right next to ditching fossil fuels in the responses to the climate crisis.
Alongside that, the whitepaper also signals the alarm over pressures on land, particularly areas that produce food and water and provide space for the infrastructure needed by transportation and energy.
Over the next 10 years, another $100 trillion of infrastructure will be needed to help meet the SDGs, which will double the current global built environment.
Andrew Deutz, director of international policy at the Nature Conservancy (TNC) advises in the report:
“That could be a huge driver for environmental degradation or, if we’re careful with our siting, and we use it to fund biodiversity offsets… then it actually becomes a huge environmental driver. The fundamental principle that we are trying to drive is net gain. Every activity that every major actor is doing should somehow contribute to improving the state of nature.”
TNC wants a similar system of biodiversity offsets in place as those used when a new highway is built, and an equivalent piece of land is ecologically improved or restored in the US.
It is also looking at ways in which former mining sites can be used for new green power plants, taking advantage of degraded land of low biodiversity value, as well as the ready-made transportation infrastructure.
Andrew Deutz explains:
“We need to build out renewable energy… but we don’t want to do it in a way that’s going to damage biodiversity. We want to think about siting that infrastructure in a smart way which has minimal impact on the environment and then whatever impact it does have requires that there’s an offset that leads to a net gain approach.”
The Rainforest Alliance’s (RA) champions the role that trees can play in this, helping to reduce greenhouse gas emissions by enhancing carbon sinks in natural ecosystems.
Han de Groot, RA CEO says in the whitepaper:
“Policy makers and business leaders must create and enforce ambitious policies and incentives to prevent deforestation, foster reforestation of degraded land, and support the sustainable management of standing forests in the fight against climate change.”
Agriculture accounts for 80% of tropical deforestation and the study highlights that the biggest threat to forests is the global push for food security and the need to feed an ever-growing population.
Paradoxically, ETH Zurich University research shows that planting billions of trees worldwide on land not built on or used for farming is by far the most cost-effective way of tackling the climate crisis.
The study underlines that forests regulate ecosystems and protect biodiversity, while trees collectively capture more than a hundred billion tons of C02 from the atmosphere each year.
Han de Groot says:
“The most powerful and cost-efficient carbon-capture technology the world has yet seen are forests.”
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The business case for one-planet prosperity
Adopting a Restorative Strategy: Nature-based solutions to tackle the climate crisis
In part 2 of “Nature-based business solutions to the climate emergency”, we will look at how businesses in the UK and across the globe are reinvigorating environments with innovative, sustainable initiatives.