On December 19, 2022, some 195 countries adopted the Kunming-Montréal Global Biodiversity Framework (GBF) aimed at halting and reversing the global decline of nature and biodiversity. The GBF established 23 targets, including those focused on the protection of freshwater and other ecosystems and the disclosure of biodiversity impacts by companies.

Nature is also at the heart of the COP28 agenda, with thematic programming that includes creating nature-positive cities, protecting and restoring marine and coastal ecosystems, and more.

The private sector will play a vital role in achieving the targets of the GBF. This means working to become nature positive—ensuring that the sum of an organization’s actions and impacts on nature will contribute to the reversal of the global decline in biodiversity by 2030, followed by full recovery by 2050. As our interviews with business and other leaders acting on the tenets of the nature positive movement indicate, the need to expand these efforts is pressing, and the financial first-mover advantage is likely considerable. We lay out an action plan for leaders to seize that advantage.

The Business Case for Focusing on Nature

The economic value produced by biodiversity is more than $150 trillion annually—nearly twice the world’s GDP. But natural ecosystems don’t simply underpin our economic wellbeing, they provide the water we drink, the food we eat, the air we breathe, and the stable climate needed for human development.

The drive to nature positive is especially pressing for industries that not only have significant impacts on nature, but also are heavily dependent on nature. These industries include agriculture, energy, forestry, food and fisheries, manufacturing, mining, retail, and pharmaceuticals.

That’s why, in the lead up to COP15, more than 400 companies from 52 countries with $2 trillion in combined revenue signed onto Business for Nature’s “Make it Mandatory” campaign. This campaign called for formidable targets, such as the adoption of mandatory nature-related disclosures for large business and financial institutions by 2030. “What was impressive at COP15 was hearing the reactions of negotiators to businesses asking them to be as ambitious as possible,” recalls Varsha Vijay, technical director of the Science Based Targets Network (SBTN).

Our interviews and research revealed four benefits of nature positive that can help leaders make a compelling business case for action.

Nature positive is central to business resilience. Taking action for nature reduces the risks that companies face.

First, it lowers the risk of being unable to obtain the natural resources or assets on which the company depends. For example, when manufacturers reduce and conserve the ground water needed in their processes, they are helping to ensure that it will continue to be available in sufficient quantity and at an acceptable price. “For us, poor soils give poor yields and it’s a business risk. The worse nature gets, the more expensive it is to get the same productivity,” says Adrien Geiger, group chief sustainability officer of L’Occitane, the French manufacturer and retailer of beauty products.

Second, it lowers risk of misalignments between companies and their stakeholders. When pharmaceutical companies source chemical compounds in ways that place less stress on at-risk species, they lower the risk that they will run afoul of new regulations and customer preferences. “Pharma relies on natural diversity to create medicines and compounds, and we need to protect those species and environments in nature,” says Sandrine Bouttier-Stref, global head of corporate social responsibility for pharmaceutical and healthcare company Sanofi.

Companies that assess their nature impacts, risks, and dependencies better understand the ways in which nature contributes to their businesses and can position themselves to protect the resources that are essential to their operations. “Protecting nature makes our business more resilient and helps to ensure the ongoing supply of raw materials needed for manufacturing and delivering the products that patients rely on,” says Claire Lund, global vice president for Sustainability at global biopharma GSK.

In many cases, this understanding leads to the more efficient use of natural inputs and ecosystem services, as well as a measure of protection from price increases that arise from scarcity. “You have nature and businesses win-win; if you use less water on sites, you can ensure this natural resource is available for your business and you may even save on costs in the long term,” says Renata Pollini, head of Nature at Holcim, the Switzerland-based global cement and building materials company.

Nature positive can add substance to ESG. ESG is a growth opportunity: ESG-related assets in the capital markets are projected to rise to $50 trillion globally by 2025; sustainability-linked loans and financing exceeded $1.6 trillion in 2021; and green public-procurement initiatives will provide an estimated $6 trillion boost to global GDP and create 3 million net new jobs by 2050. As with net zero, nature positive reporting and disclosure will help financial institutions and governments to identify and invest in companies that are addressing nature risks and capturing the opportunities they offer.

Nature positive can generate demand side opportunities. As nature consciousness increases, more customers are likely to pay a premium for nature positive products and services. In B2C, some customers favor consumer goods companies and products that are climate friendly, and the same advantage is likely to accrue to first movers on nature. In B2B, some buyers are anticipating demand from their customers or regulators and are moving to securing access to the limited pool of nature sensitive commodities, while some suppliers are acting to capture these emerging “nature procurement” opportunities.

Nature positive can enhance employer brands. We know that companies with net zero strategies and those acting to tackle climate change are more successful at attracting and retaining talent. Indeed, about half of the employee respondents to a 2020 BCG/The Network web survey said they would not work for organizations that do not reflect their personal beliefs regarding the environment.

As with climate action, being nature positive can give companies an advantage in attracting and retaining talent in what is a challenging market for many employers. The competition for nature-related professionals is particularly intense. “There is a massive skills gap in the biodiversity area,” says Benj Sykes, vice president of Offshore and head of Environment, Consenting & External Affairs at Ørsted, the multinational power company. Companies that act early to establish a nature positive reputation will gain an advantaged position in the talent market as they seek to recruit and develop skilled nature teams.

An Action Plan

To answer the call to action embodied in the targets of the Kunming-Montreal Global Biodiversity Framework and begin to reap the benefits of nature positive, company leaders can take four steps.

Establish a clear North Star for the company’s nature ambition. Net zero has been a galvanizing and specific goal for addressing climate change, and companies will need a similar clarity. The challenge is that GBF’s list of global targets does not easily translate into a clear action plan at the company level. “The COP15 outcome is more complex than the 1.5° target due to nature not having a singular measure—in contrast to greenhouse gas emissions for climate,” says Nathalie Borgeaud, lead for Financial Markets Stakeholder Engagement at the Taskforce on Nature-related Financial Disclosures.

What nature positive lacks is a focal point of action for achieving its ambition. All the leaders we interviewed support the global ambition of nature positive, but their initiatives are at different levels of maturity, and they are responding to the ambiguous focus of nature positive in different ways: Some are seeking an active role in defining its standards; others are waiting for a consensus to emerge.

Nature is not like climate change. Net zero is a more straightforward target: units of carbon emitted or abated are concrete, measurable, and have the same impact on the atmosphere wherever the occur. Nature is more complex, and it spans realms, resources, and locations. Even if it were possible to boil nature down to a single metric (like CO₂e for carbon), the metric would be too broad to use. “Nature as a concept needs that complexity to ensure that when companies are taking action, they are taking meaningful actions on concrete dimensions of nature,” says SBTN’s Varsha Vijay.

The various elements of nature, the diversity of natural ecosystems, and the many different ways these ecosystems support economic activity make it challenging to define what nature positive means for companies. Despite this challenge, more concrete definitions of what nature positive means are emerging. The IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services) provides a helpful framework for companies to assess their impacts by defining five main pressures that human activity exerts on nature. These are: land use and land use change; resource use, including wild species and water resources; land, water, and air pollution; greenhouse gases; and disturbances, such as invasive species. Companies need to understand which of these pressures are material in their operations and value chain.

Additionally, many of these pressures are local by nature. For example, water use is a problem if a company has water-intensive processes in water-stressed areas, but the same activity in a locale with no water constraints may not be material. Thus, companies need to understand where their material pressures are contributing to the degradation of nature systems by examining specific pressures in specific landscapes.

Moreover, nature’s impacts are nonfungible. Generally speaking, companies cannot offset one pressure for another: restoring water sources cannot serve as a substitute for deforestation. The individual pressures need to be avoided and reduced, then restored and regenerated, and then the system that produced them must be transformed. For example, if the pressure is on water, water may be conserved, then wetlands may be replanted to restore the capacity of the watershed, and finally, funding may be provided to change local farming practices.

The meaning and measurement of positive actions for biodiversity will vary by what business activities occur, where they occur, and which ecosystem services are impacted or relied upon in the commission of that activity. As Benj Sykes of Ørsted says, “You’re not going to have one number for biodiversity measures. That’s not going to happen.” Rather, Ørsted is working toward a comprehensive set of metrics and indicators to quantify the net-positive impact its projects are having on local ecosystems.

Given these conditions, the idea of a company declaring itself a nature positive business is a high hurdle in present moment. Instead, companies can make a commitment to nature positive and as Sandrine Bouttier-Stref of Sanofi says, “Back it up with actions having real impacts and real delivery at the local level.” Ultimately, aligning a company with the goal of nature-positivity requires more than curbing only its most egregious nature-harming activities. We believe companies need to ensure that their nature goals:

• Extend across the full value chain, in the same way that Scope 1, 2, and 3 emissions do in carbon reduction.
• Address all the principal pressures exerted on nature by the company, as defined by the nine planetary boundaries.
• Encompass all impacted landscapes by adopting specific measures and targets that address the unique conditions and needs of local environments.
• Prioritize impact reductions now and incorporate long-term, transformational restoration and regeneration goals by 2030.

Decide how and where to start taking action on nature, now. Many companies and financial institutions are unsure how to begin on the journey to nature positive. The maze of nature-related scientific opinions, standards, and frameworks is central to this dilemma. As Michael Ofosuhene-Wise of Business for Nature states, however, “We cannot let the perfect be the enemy of the good at this point. There are many no-regret actions and commitments businesses can already begin to make.”

Consequently, the emergence of two voluntary standards as clear leaders at COP15 has been well received: the impact assessment and target-setting tools of the Science Based Targets Network (SBTN) and the risk and disclosure guidelines of the Taskforce on Nature-related Financial Disclosures (TNFD). SBTN enables companies to understand their impacts on nature and offers tools for assessing those impacts, evaluating materiality, prioritizing areas of impact, setting targets, and taking action. TNFD enables companies to understand the ways in which they are dependent on nature and provides tools to identify, quantify, and disclose nature-related dependencies and risks. The two frameworks have been designed to work together and enable companies to consider double materiality, that is, both the impact of the company on nature and the impact of nature on the company.

After much anticipation, guidance from both SBTN and TNFD has finally been released for use this year. As of May 2023, the first SBTN methods companies can use to set science-based targets for nature are available. These methods are in different stages of development but include methods for freshwater quality and quantity, conversion of natural land, land footprint reduction, and landscape engagement. Several of the executives with whom we spoke said their companies have already used SBTN’s guidance to identify their material impacts on nature. (See “Leading on Nature.”)

Leading on Nature

Companies can use the current guidance by the Science Based Targets Network (SBTN) and the Taskforce on Nature-related Financial Disclosures (TNFD) to get started on the nature positive journey. Doing so now is important for a number of reasons:

• Several key ecosystems are nearing collapse and could result in the disappearance of valuable ecosystem services by 2030. Even action taken now is likely to take 5–10 years to deliver results. As Holcim’s Renata Pollini says, “Nature cannot wait. We need to act now.”
• The opportunity to establish a position as frontrunner will not last. Those lagging in ambition will not only expose themselves to unnecessary risk, but they will also lose the opportunity to inform the frameworks and standards against which they will be measured and regulated in the future. “By adopting the significant amount of existing guidance, businesses can already begin to transform and understand how they impact and depend on nature,” urges Martin Lok, executive director of Capitals Coalition, a global collaboration effort working to ensure that businesses, financial institutions, and governments include the value of natural, social, and human capital in their decision making.
• Companies that start now can play a proactive role in testing and refining the guidance and tools that will define nature positive in the years ahead.
• For companies in food and agriculture, forestry, extractive, and heavy industries, the need to start is increasingly acute: They have significant impacts and dependencies on nature and are most likely to be affected as governments adopt nature protection regulations. “The frontrunners don’t start because they already know everything, they start because they want to be ahead of the game and see the benefit in taking action now,” adds Lok.

Even though setting nature targets, assessing nature impacts and risk exposures, and developing pathways aimed at stopping nature decline are novel pursuits in most companies, nature will not require a wholly new transformation. Companies that have already started on sustainability journeys that address climate, water, and/or waste will have some of the required organizational muscle and technical expertise already in place, and their stakeholders are likely to see nature as an expansion of that journey. “Having a climate strategy already means you have the internal mechanisms in place for addressing nature impacts. Setting science-based targets for nature builds upon the work that companies have already done,” says Varsha Vijay of SBTN.

Moreover, companies that have adopted science-based targets for net zero and file climate-related disclosures will have a head start on nature. “If you have already gone through TCFD [the Task Force on Climate-Related Financial Disclosures], you’re gaining five years,” says Nathalie Borgeaud of the Taskforce on Nature-related Financial Disclosures.

SBTN continue to work closely with SBTi to align requirements and provide companies a clear indication of what best practice looks like for environmental impact management. The joint guidance from SBTN and TNFD on target setting has been refined to reflect the latest developments from both organizations on impact assessment and targets.

A company should conduct a materiality assessment of its value chain and set targets for action:

• Use SBTN and TNFD to paint a full picture of the impacts of your company on nature and the magnitude of its nature-related risks and dependencies. This double materiality is likely to differ significantly between your company and companies in your industry and in other industries.
• Based on your materiality assessment, move quickly to set and prioritize science-based targets that will support your headline ambition.
• Be prepared to revise the targets as nature positive goals evolve.

Redefine and transform your company’s business models and operations. Achieving nature positive targets and capturing opportunities for value creation that they reveal will require companies to transform their business models and operations. All the leaders we consulted recognized that nature positive has significant implications for business models.

Every company will have a different vision and plan for these transformational efforts. (See “Nature-Focused Transformations.”) But all transformations require the same kinds of enablers and nature positive transformation have some clear markers for success:

Nature-Focused Transformation Efforts

Ørsted, the Danish energy multinational, is a clear and early example of transformation in the face of climate change. By 2006, the company was developing offshore wind farms as the first stage of its transformation from fossil fuels-based operator to a renewable energy operator. Currently, Ørsted is incorporating net positive biodiversity goals into this transformation by, for example, installing artificial reefs at offshore wind sites. The company has also declared it will deliver a net-positive biodiversity impact from all new renewable energy projects by 2030, and, toward that end, has integrated biodiversity principles across its operations.

Accor Hotels is reimagining the internationally standardized model for luxury hotels in pursuit of a differentiated customer experience that also supports nature positive. Instead of providing the same experience globally, the company is redefining itself as “multi-local” and taking biodiversity into account when choosing locations to avoid artificialization of highly biodiverse areas. It is also modifying the services and offerings of its hotels based on their local nature impacts. For example, hotel restaurants build their menus around sustainable and local foods.

L’Occitane, the French manufacturer and retailer of beauty products, is returning to its roots by re-establishing nature as a core element of its mission and publicly committing to a nature positive strategy that spans the enterprise. Toward that end, L’Occitane is seeking both marketplace and cost advantages by utilizing natural ingredients in its products and formulas whenever they offer a sustainability advantage over synthetics.

GSK, the global biopharma company, recognizes the link between nature, climate, and human health. In 2020, GSK set ambitious goals across its entire value chain—committing to a net zero impact on climate and to contribute to a nature positive, healthier world. It is one of the 17 companies in SBTN’s pilot group aiming to set validated science-based targets for nature and has committed to publishing TNFD aligned disclosures in 2026. GSK is also investing in nature protection and restoration, within and outside its supply chain. In Nashik, India, a water-stressed region where GSK has operations, GSK is partnering with a local NGO on a community-based water replenishment project and is a founding partner of the Women + Water Collaborative.

• Nature-focused transformations require strong corporate leadership. As Sandrine Bouttier-Stref of Sanofi told us: “It is critical that the whole company leadership, including the CEO and the executive committee understand and acknowledge the issues at stake.” Therefore, leaders must understand why the company needs to act for nature and set a high ambition. They also need to enlist the full commitment of their boards and senior executives through a variety of means, including tailored compensation plans. “We included sustainability incentives for senior leaders’ bonuses,” says Renata Pollini of Holcim. “In addition to performing financially, they have to deliver on climate, freshwater, and circular economy to get their bonus entirely. This is really a shift in their mindset.”
• Nature-focused transformations must involve the entire business. The responsibility for change should not rest solely on the central sustainability team. Instead, it should be spread among functions, such as procurement and sourcing, new product development, and operations, if it is to have an impact. Nature positive must be embedded in the corporate culture and in decision-making processes across the company and their interactions across the value chain. “We are supporting our suppliers to step up their ambition and actions on nature, for example, by working with them to implement our sustainability standards for natural materials,” says GSK’s Claire Lund.
• Nature-focused transformations require collaboration. A company can use less water, but if a neighboring company takes this opportunity to use more, it will not reduce the risks of water stress on the local environment. Thus, companies need to engage with participants across their ecosystems and forge connections and relationships with the scientific and political communities, customers and suppliers, other businesses, and the communities in which they operate. In this regard, leaders should pay particular attention to stakeholders at the local level: Indigenous peoples and local communities make up only 5% of the global population, yet they are the stewards of 80% of the world’s biodiversity, according to the World Wildlife Fund. As Sandrine Bouttier-Stref of Sanofi says, “We need to find ways to improve nature together and galvanize action on our common dependencies.”

Companies that embark on the transformation journey to nature positive early can benefit from first-mover advantages. These advantages can manifest in the ability to orchestrate and shape new value chains and business ecosystems, and to secure the control points in terms of assets, talent, partnerships, and customers.

Coordinate and combine the company’s climate and nature initiatives. The last challenge identified is the additional burden of taking on and managing a nature positive initiative while also pursuing existing sustainability and climate initiatives. This challenge manifests in the complexity of increased reporting, and confusion about competing environmental priorities, with action paralysis cascading across different business units and regions.

This sounds daunting, but climate and nature are interlinked and so most companies are not starting from scratch. The biggest pressure on biodiversity and natural environments stems from climate change. Similarly, nature loss also significantly accelerates climate change, through the loss of natural carbon sinks in forests and wetlands, which currently sequester one-third of global GHG emissions annually. “Biodiversity and carbon issues are actually two faces of the same coin,” explains Brune Poirson, chief sustainability officer of Accor, a global hospitality group. “We cannot build a carbon-neutral world without protecting nature.”

Companies can reap positive synergies by recognizing and taking a coordinated approach to sustainability. In sourcing less carbon-intensive commodities, for example, a company can also seek to limit its impact on nature—pursuing multiple sustainability benefits from one procurement decision. Another way is to ensure that carbon offsetting strategies also deliver for biodiversity, by selecting projects that offer biodiversity net gain or do not convert existing natural ecosystems.

Capturing synergies requires that companies carefully consider these climate-nature interactions when defining their sustainability strategy. This offers an opportunity to spot both complements and conflicts between proposed climate and nature initiatives early on and ensure that they deliver maximum effect without unwittingly doing damage. As Claire Lund of GSK says, “We know that the twin crises of nature loss and climate change are linked and that action on nature is a critical part of achieving a net zero future. So, our nature plan is interdependent with and supports our commitment and pathway for a net zero impact on climate.”

Integrating nature with previous initiatives can ease the organizational challenges of nature positive. It creates an opportunity to apply the organizations, mechanisms, capabilities, and governance developed for earlier initiatives to nature positive. It enables companies to tap into previously acquired knowledge regarding their supply chains, operations, and downstream activities. For instance, companies that have tracked their carbon footprints already have much of the information they need to trace the outline of their nature footprints; they only need to identify the place of origin for commodities or location of activity to track their full impact across all planetary boundaries. Further, because nature positive initiatives stand on the shoulders of climate sustainability efforts, it can make it easier to gain management approvals and investor support.

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The nature positive agenda is still emerging and already evolving. But the adoption of the Kunming-Montréal Global Biodiversity Framework is a clear signal that government leaders are ready to act more aggressively on nature and puts business leaders on notice that they should begin preparing their companies for a nature positive future. Business leaders who embrace that role now will not only be moving to secure the futures of their companies, they also will become agents of change in the protection and restoration of the natural world on which human life depends.

The authors appreciate and extend our thanks to our interviewees and other experts and practitioners for their time, contributions, and insights.

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