Posted on April, 23 2020

Wherever you look, the links between nature, climate, human society and the economy are becoming clearer and more vivid: whether in deforestation in the Amazon, our changing oceans, or the transmission of viruses from animals to humans, the interdependencies between human society and the natural world have never been so obvious – nor so critical to our well-being.

In the corporate world, too, there is growing recognition of our dependence upon our natural environment, and the role that large companies have in supporting the work needed to protect and enhance vital ecosystems. Specifically, there is growing interest in funding ‘nature-based solutions’.

That recognition is to be welcomed, and those efforts applauded. But there can be a fine line between good-faith efforts to invest in nature to compensate for a company’s unavoidable impacts or earnest environmental responsibility and using nature as a ‘fig leaf’ to cover unsustainable economic activity.

What are nature-based solutions?

IUCN (the International Union for the Conservation of Nature) defines nature-based solutions as “actions to protect, sustainably manage and restore natural and modified ecosystems in ways that address societal challenges¹ effectively and adaptively, to provide both human well-being and biodiversity benefits”.

They might include reforestation projects in areas of particular importance for water recharge, the protection of coral reefs or seagrass beds for fish stock recovery or maintenance, the conservation or restoration of wetlands for climate adaptation and disaster risk reduction, or creating green roofs and walls and cities to regulate temperatures and store carbon.

By working with the grain of nature, they often also help solve more than one of the environmental crises we face: storing carbon, protecting biodiversity, regulating water, supporting agri- and aquaculture or helping local communities protect against climate-related disasters.

There can be a direct and rapid economic benefit from such efforts. A frequently cited example is the $6bn in upfront costs, plus annual operating costs of $250m, faced by New York City in building a new water purification plant. Instead, it spent an average of $167m per year over 10 years restoring and protecting upstream land and forests, helping to purify the city’s water and allowing it to avoid the cost of the new plant.

Business and nature-based solutions

The many societal benefits are clear. But all too often, the business case is difficult to make – especially where the valuable services provided by nature, such as carbon sequestration, water management, or pollination, are not properly valued. It is into this vacuum that conservation groups, philanthropists and small amounts of overseas aid have stepped.

It is widely accepted that these donors lack the resources to do more than scratch the surface. A 2016 report from Credit Suisse and McKinsey estimated that some $300-400bn is required each year to preserve healthy terrestrial and marine ecosystems – but only $52bn/year is flowing towards conservation projects.

Large corporate funders offer a potentially compelling source of funding and therefore implementation capability. Some companies have announced plans to include funding for nature-based solutions as part of their plans to reduce their environmental impact, particularly regarding climate change.

In some cases, these commitments are part of well-thought through decarbonisation strategy with long-term net-zero carbon goals and short-term targets, where investments support nature protection projects that would not otherwise have gone ahead. These projects can help avoid land degradation or remove and store carbon from the atmosphere, counterbalancing ongoing emissions that remain after a company has exhausted all feasible alternatives.

Support for nature-based solutions can’t be an excuse for business as usual

In other cases, support for nature-based solutions is used as an excuse to continue business as usual. For example, it is hard to view Shell’s decision to buy carbon credits to offset the emissions from its UK-based customers’ fuel purchases and market it as ‘Carbon Neutral Driving’, as anything else but greenwashing. As long as the oil major is exploring for additional oil and gas reserves, the contribution of its core business to the climate emergency is vastly outweighing any positive effects from this minor investment in carbon credits.

Every sector and every company has a role to play in supporting the pursuit of global climate goals. The measuring stick (or baseline) for each sector and company is not – are they doing anything, but are they doing what is required to achieve a 1.5°C future? That is leadership, and anything less is a continuation of a system that externalises environmental costs to the global commons.

Continuing to spew fossil fuel emissions will drive climate impacts that make forests and other ecosystems more vulnerable to fires, pests, and disease – as we’ve seen so clearly this past year with fires raging on nearly every continent. Starting with tree planting before fossil emission reductions puts forest investments at high risk - and does not reflect a sound investment.

The key is credibility²

But it would equally be wrong to dismiss all corporate support for nature-based solutions. For many companies, even if they are reducing their emissions in line with what science³ tells us is needed – a halving every decade – there will be residual emissions that can and should be balanced out through investments in nature-based solutions.

The key to credibility is a robust definition of what those residual emissions should be, based on climate science, depending on what economic activities each company engages in, and where those activities take place. These residual emissions should decline over time, as low- or zero-carbon technologies displace carbon-intensive ones. The Science Based Targets initiative, of which WWF is a partner, is working on a net zero guidance and definition, which will provide a framework to help companies answer some of these questions.

Further, any such nature-based solutions need to put nature first in a clear win-win corporate strategy that has net positive environmental benefits. For example, projects that seek a financial return on investment are likely to lead to suboptimal outcomes for nature. Solutions also need to be resilient in the face of a rapidly changing climate, otherwise they will fail.

They also need to be transformative: rather than simply generating measurable reductions, such as carbon credits, projects need to address the underlying conditions and processes that drive the destruction of natural habitats. Without the right land tenure franchising instead of de-franchising local owners rights, governance arrangements and supporting policies, economic opportunities for forest peoples and demand for forest-risk commodities, this destruction will continue. Projects must balance financial return with environmental integrity for climate and biodiversity.

Fig leaves are no longer fit for purpose

Investments in nature-based solutions cannot be used as an excuse to continue with high-emitting business models or to justify the continued sale of high-carbon products or services. The climate crisis – much like the COVID-19 pandemic – requires us to look again at how we manage our relationship with nature and natural systems. We need to acknowledge that fig leaves are not fit for purpose.

Vanessa Perez-Cirera is the deputy leader of WWF’s global climate and energy practice.

^{1 IUCN considers climate mitigation and adaptation, water and food security as well as disaster risk reduction as current key societal challenges.
2 Read WWF's five principles for nature-based solutions.
3 More than 200 companies have already assumed Science-based Targets aligned with a 1.5°C trajectory}