Nature Takes Center Stage

Recent developments could go a long way in exhibiting nature’s importance in the climate fight.

October is always a special month in the United States. In the North, the foliage changes colors and in the South, temperatures finally dip below 90 degrees – mostly. But the 2023 version may be even more special. October 2023 is the first month after the launch of the framework for nature-focused financial disclosures from the Taskforce on Nature-Related Financial Disclosures (TNFD). Additionally, this month falls right before the start of COP28 in Dubai. The 28th version of the so-called Conference of the Parties (COP) will renew worldwide focus on the climate-focused goals from COP15 in Paris in 2015. COP28 will focus on how the world needs to come together to limit climate change to two degrees Celsius – the benchmark set at COP15.

The United Nations Framework Convention on Climate Change (UNFCCC) is the organization responsible for the COPs. As of this article’s publish date, they have only listed topics for the COP but not the full agenda. Nature, as an individual topic, did not make the list but land use and oceans did.

Meanwhile, many expect the rollout of the TNFD framework to further promote the importance of nature and natural capital for society and business. Of course, nature lovers and wildlife enthusiasts treasure nature and have an emotional connection, but nature has clear bottom-line impacts for businesses and our economy as well. Currently, there are roughly a million species of plants and animals under threat of extinction due to habitat loss, pollution, climate change, disease or overharvesting, and everyone should heed the spectacular and dreadful threat to biodiversity. As my colleague Felicia Jackson points out, it is difficult to quantify the benefits nature provides to society or business interests, but we can see clear evidence. Bees pollinate plants to support agriculture, trees cleanse the air and sequester carbon, and ecosystem balance helps manage populations of pests that carry diseases. Certain regions heavily depend on travel and tourism bolstered with natural settings to lure tourists. And not to be overlooked, the dependence on nature by Indigenous peoples in numerous regions is difficult to quantify but definitely present. A 2023 analysis from PwC agreed that over half (55%) of the world’s GDP is moderately or highly dependent on nature – and put the value of that dependency at $58 trillion.

So the TNFD framework provides a methodology for corporations to assess and disclose the impact that degradation of natural capital, loss of biodiversity, and destruction of aquatic ecosystems has on their bottom lines and business operations. And the adoption and deployment of TNFD are evidence of a growing acknowledgement of the need to protect natural capital – both in the context of slowing climate change while also preserving the economic, social and emotional benefits that nature provides us. But how high does the preservation of nature rank when we look at ways to combat climate change?

After COP27 in 2022, the World Economic Forum summarized what actions the conference took and failed to take to further enable natural systems as part of the fight against climate change. Plans for financing biodiversity, Brazil’s promise to prioritize preservation of the Amazon rainforest, and the mention of nature-based solutions in the final text of the COP were major accomplishments in regard to realization of nature’s key role in the climate fight. But there was no success in including a biodiversity preservation agreement into the final COP agreement, which was a disappointment. Still, natural capital had a key place at COP27.

But what of COP28? While there are many advocates for ensuring COP28 includes commitments around halting biodiversity loss, preserving forests and ensuring nature positivity it is unclear at this time if firm commitments will be a part of the final text of COP28.

Still, the momentum around prioritizing nature in the corporate and investment community cannot be denied. And this could not come too soon. McKinsey, the global consulting firm, points out that human activity has pushed our planet and several natural systems are on the brink of breaking. In the firm’s report on the role of business in the preservation of natural capital, there is the establishment of planetary boundaries, or systems through which this planet supports human life. According to the report, if these systems are degraded by human interference beyond a certain tipping point, they could “break” to a point where reversal would not be possible. Biodiversity loss, chemical and plastic pollution, nutrient pollution, and greenhouse-gas (GHG) emissions – which leads to climate change – are the four boundaries that have already been exceeded, per the report. Two others, forest cover loss and freshwater consumption, have been impacted to a level that the report found “inconclusive”. The report concluded that corporate actions could play a very large role in reversing these trends before the tipping points are reached (although corporate actions alone are not sufficient). It also identified twelve “levers” across multiple industries which could provide positive financial return on investment.

In conclusion, we are making great progress in prioritizing nature’s role in fighting climate change and providing social, commercial and economic benefits while assessing how loss of natural capital impacts the economic activity and the fight against climate change. But as it relates to reversing deforestation, protecting biodiversity and reversing habitat loss, we still have more work to do. This is a very important realization, as it will be impossible to reach our climate goals without preserving our natural capital.