There is a business case in nature, Energy News, ET EnergyWorld

The climate crisis is leading business agendas around the world today. Across industries, we’ve been innovating rapidly, but this accelerated pace of progress has come at the cost of nature. Land use (excluding agriculture) is alone responsible for approximately 10 percent of global warming. To advance the green energy transition, it is crucial that alongside clean energy adoption, nature conservation is brought under the spotlight.

The entire business world must critically examine its supply chains and the impact they are having on nature. Over 90 percent of the company’s footprint lies in its supply chains. Organizations can help reduce over 5.9 Gt of CO2 emissions annually by adopting nature-based solutions including forest restoration and landscape conservation in collaboration with local communities. This, in tandem with supporting energy decarbonization solutions, will remove more than 14 Gt of emissions annually.

And there is a business case for forest conservation too. Embedding long-term sustainable practices that protect the natural environment aids corporate reputation and brand loyalty. Consumers and stakeholders alike are taking increasing notice of brands’ sustainability credentials, from the products they buy to the businesses they support, collaborate with or invest in. Recent research has found that 79% of consumers across Europe, the US and India are likely to make purchasing decisions based on environmental impact and social responsibility.

The economic incentive of investing in nature-based solutions that embrace forests goes beyond audience buy-in. Over half of the world’s total gross domestic product is dependent on nature and its services. Meanwhile, damage to the environment equates to substantial financial loss. In the first six months of 2021 alone, insured losses from natural disasters reached a ten-year high of $42 billion. Ensuring a deforestation-free supply chain is a vital step for the private sector to ensure business longevity.

Many companies are already acting and options such as forest carbon credits are an attractive draw, enabling them to offset their own emissions by buying credits that help to protect trees. Beyond their role protecting forests, carbon credits can also be a helpful source of funding for nascent climate action projects.

Demand for carbon credits has already been rising rapidly, with some major multinationals working extensively with providers of carbon offsetting projects to meet their ambitious sustainability goals and address emissions that they may be unable to eliminate themselves. Estimates have shown that in 2020, buyers used carbon credits to offset around 95 million tons of carbon-dioxide equivalent – double the number in 2017. In 2022, global carbon markets hit a record value of $909 billion, with that figure only set to grow.

These are positive steps, but more can be done. The private sector has a huge role to play by embedding zero-deforestation into their supply chains. But to realize the greatest impact, private and public organizations need to join forces. In India, for example, forestry is under government control, but there are still many unrealized opportunities for businesses to help tackle the widespread forest loss we have experienced in recent years.

Private sector investment and engagement will be essential for channelling funding into anti-deforestation solutions, and many projects are only possible with the support of the private sector’s support and collaboration. For example, WEF’s 1 trillion Trees Initiative works to mobilize the private sector, relying on their buy-in and collaboration across industries to achieve its mission of conserving, restoring, and growing one trillion trees before 2030 in support of commitments made by the UN.

The Government of India in its recent budget has provisioned for schemes such as MISHTI and Amrit Dharohar which focus on preserving and enhancing sustainability of mangroves and wetlands. The private sector, if given an opportunity, can bring significant value to these initiatives by helping them scale and bring best practices in financing, execution, and monitoring.

Better collaboration would also enable governments to leverage private sector expertise and technology to protect the environment. Businesses’ digital services can be particularly helpful in these shared efforts. Data insights from satellite technology is showing the areas most at risk of deforestation. Indeed, initiatives such as the Global Forest Watch have made tree cover tracking a free resource. Blockchain technology is additionally providing far greater transparency when it comes to understanding land ownership and preventing the illegal sale or tampering of protected areas of forest.

Beyond this, the private sector can play a valuable role in mitigating against nature loss through mentorship. This can be done through the introduction of robust training programs to upskill workers on how to implement strategies that conserve nature. Working with the government, sustainability leaders in the private sector can also support the development of a framework of best practice, helping to guide other businesses on reducing nature loss. Small and medium enterprises in collaboration with large-size private firms can work with forest communities to improve livelihoods, reduce poverty, and warrant support. Such collaborations will lead to increased community trust and alignment with customer values, creating long-term value for businesses.

Introducing a clear roadmap for action that incorporates private sector participation will ultimately help governments to fast track their Nationally Determined Contributions (NDCs) and accelerate the global movement towards net-zero.

The 2030 deadline to end deforestation draws is fast approaching, and businesses worldwide need to be reassessing their policies and plans, doubling down on strong anti-deforestation strategies, and looking for opportunities to support governments in realizing change.

Renewable energy companies have been playing an important role in investing in forest resources. In India, many have been reclaiming barren lands for solar and wind projects, helping the government to maintain forest cover. To be truly sustainable, businesses need to partner with local communities to understand and mitigate against the impact of land use, collaborate on restoration projects, and support them with initiatives that increase their livelihood opportunities, so that lasting and embedded change can take place.

Global interest in carbon finance is also incredibly promising for our net-zero future as it gives all businesses a tangible route to participate in driving progress. Decarbonization and forest conservation projects have become magnets for carbon credits in recent years and this is enabling sustainable businesses to derive value in new ways and accelerate change. At the same time, the potential of carbon markets for both environmental conservation and business profit is becoming ever clearer. Improving the current systems with strong standards will ensure integrity and unlock new financing opportunities so businesses can tackle decarbonization with confidence whilst maintaining profits.

  • Published On Jun 13, 2023 at 02:47 PM IST

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