Companies Must Go Beyond ‘Carbon Tunnel Vision’ Ahead of COP16

Later this month, the world’s policymakers, environmentalists and business leaders will be in Cali, Colombia for the latest UN biodiversity conference — and companies are being urged to broaden their sustainability horizons.

By Tom Idle | Published 3 hours ago | About a 8 minute read

Image: Ray Bilcliff

While progress on corporate climate action can be frustratingly slow, we can be buoyed by the fact that most big businesses now understand their impact on the climate; and by and large, they acknowledge the associated risks of climate on their operations and chances of long-term success. Quite rightly, carbon reduction has dominated corporate sustainability strategies in the last decade — with thousands of companies racing to set ambitious goals to reach net zero and beyond.

But are companies suffering from ‘carbon tunnel vision’? After all, climate change is just one of nine planetary boundaries that, if crossed, could lead to catastrophic environmental changes at a global scale. Biodiversity, land and water ecosystems provide essential ecosystem services for not just businesses but the world — and protecting them will require careful attention and tailored solutions.

Later this month, the world’s policymakers, environmentalists and business leaders will be in Cali, Colombia for COP16 — the latest UN biodiversity conference — and companies are being urged to broaden their sustainability horizons. Solving the planet’s environmental challenges will take more than simply cutting greenhouse gas emissions; protecting and enhancing biodiversity is critical for solving the climate crisis, too. After all, "what’s better for plants and wildlife is better for the climate." Without addressing their impacts on nature, companies stand little chance of meeting their carbon and net-zero targets.

The problem with carbon tunnel vision

While cutting carbon emissions is undeniably crucial for combating climate change, this single-minded focus often leads companies to overlook the intricate web of natural systems that also require urgent attention. Deforestation, water scarcity and biodiversity loss are all interconnected with carbon emissions. Forests, wetlands and oceans are some of the Earth’s most important carbon sinks — absorbing and storing vast amounts of carbon dioxide. Yet, without protecting these ecosystems, reducing emissions alone will not be enough to mitigate the worst impacts of climate change. According to the International Union for Conservation of Nature, nature-based solutions — such as restoring critical ecosystems including forests, wetlands, coral reefs and mangroves — could provide up to 37 percent of the carbon reductions needed to keep global temperature rise below 2°C. But this potential is being undermined by the ongoing degradation of natural systems.

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As companies seek to mitigate their environmental impact, the challenge is not only about reducing emissions but also addressing the broader ecological footprint. More than half of the world’s GDP is ‘highly’ or ‘moderately’ dependent upon nature. This 50 percent of GDP provides the key goods and services on which we all depend — and without which the other 50 percent cannot function. Essentially, nature risks are business risks.

What does a nature-based corporate strategy look like?

A nature-based strategy goes beyond carbon and considers the full range of environmental impacts a company has on ecosystems and biodiversity. It involves protecting, managing and restoring natural ecosystems in ways that make both the environment and the business more resilient.

At the core of a nature-based strategy are nature-based solutions — projects that protect or restore ecosystems while also addressing societal challenges such as climate change, water scarcity and food security. Unlike addressing greenhouse gas emissions, which demands impact reduction all along a supply chain, tackling nature challenges and risks requires more targeted action. Prioritizing hotspots and channeling resources to create the most positive impact is key. This means measuring and identifying ‘at-risk’ areas, understanding how and where your business is vulnerable and highly dependent on nature, and quantifying the risk to establish whether acting makes commercial sense.

For example, Purina is investing in ocean-restoration schemes as part of its nature-based strategy. Purina uses fish by-products — which are not typically consumed by humans but provide a valuable ingredient in pet food — so, it has a vested interest in the health of marine ecosystems. Through its Ocean Restoration Program, Purina works with local partners around the world to help revive degraded marine ecosystems — such as kelp forests in northern Norway, which have been decimated by the uncontrolled growth of sea urchins — restoring habitats for marine life and restoring a powerful carbon-capture solution. Purina is also working to restore another carbon-sequestering powerhouse, seagrass, and deploy sustainable oyster reefs — with a goal of restoring 1,500 hectares of marine habitats in Europe by 2030.
Retailers including Kroger and Whole Foods Market are going all out to protect butterflies, bees and other pollinators by requiring suppliers to phase out neonicotinoids (a class of insecticides chemically similar to nicotine) and embrace integrated pest-management strategies. Protecting pollinators is sound business strategy; roughly 35 percent of the world’s food supply relies on pollinators to reproduce.
And more and more companies are making impressive investments to protect biodiversity beyond their own value chains. Between Kering and L’Occitane Group’s joint Climate Fund for Nature, L'Oréal’s Fund for Nature Regeneration and Apple’s Restore Fund, over a billion dollars have already been directed toward advancing high-quality, nature-based, carbon-removal projects and regenerating degraded ecosystems.

How to start tracking impact and improvement on nature

Thankfully, as awareness has grown of the connection between healthy biodiversity and a healthy world — and therefore, healthy businesses — a corresponding explosion in research, tools, platforms, coalitions and financial mechanisms have emerged aimed at helping companies understand, quantify and offset their impacts on the natural world.

And there are intuitive ways for companies to begin to take meaningful action on nature. Those that rely on agriculture or resource extraction can adopt sustainable land-management practices to ensure that their operations do not degrade natural habitats. For example, agroforestry — which integrates trees into agricultural systems — can improve biodiversity, enhance soil health, and sequester carbon.

A water-focused nature-based strategy can include practices such as restoring wetlands, which act as natural water filters and provide habitat for diverse species, as well as improving operational water efficiency and protecting water sources. Companies must also do their due diligence to make sure their supply chains and operations are not contributing to habitat destruction or species extinction.

As with any sustainability improvement program, effective impact measurement and reporting are crucial — investors, consumers and regulators are demanding greater transparency and accountability when it comes to nature impacts. One emerging framework is the Taskforce on Nature-related Financial Disclosures (TNFD), developed to help companies assess and disclose their nature-related risks and opportunities. Modeled after the Task Force on Climate-related Financial Disclosures, the TNFD aims to provide a standardized framework for companies to report on their dependencies on nature and the financial risks posed by biodiversity loss.

The advent of science-based targets for nature will also be helpful in setting measurable goals for reducing ecosystem impacts. These targets are aligned with global biodiversity goals, such as the Convention on Biological Diversity’s post-2020 framework, and are designed to provide brands with a clear pathway for reducing their biodiversity impacts.

Advances in satellite technology and AI are enabling more firms to partner with monitoring organizations to better understand their impacts on natural ecosystems in real time.

What to expect from COP16

COP16 will hopefully result in meaningful strategies for addressing the global biodiversity crisis — because, as The Nature Conservancy points out, “the stakes couldn’t be higher.” Ultimately, the goal of the meeting will be to start shifting the commitments made as part of the 2022 Kunming-Montreal Global Biodiversity Framework, developed at COP15, into actionable plans — which will demand global cooperation and “recognizing biodiversity’s critical role in our economy, food security, climate stability and planetary health.”

The Summit will also need to address the need for greater corporate accountability and transparency when it comes to nature-related impacts. This is likely to lead to increased regulatory pressure on companies to disclose their impacts on natural ecosystems, much like the current expectations for carbon emissions reporting.

Over the next few years, we can expect the policy landscape to shift toward greater emphasis on nature-based solutions and biodiversity protection. Governments are increasingly recognizing the importance of protecting natural ecosystems as critical to their climate strategies, and businesses will need to adapt accordingly. Because, as we’ve learned, nature risks are business risks.

Tom Idle

Content creator extraordinaire.

Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.

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