Nature investments could generate $10 trillion in annual business and 395 million new jobs by 2030
Editor’s note: Representatives of 196 countries are gathering in Cali, Colombia, this week for the 16th UN Conference on Biodiversity (Cop16). It is the first biodiversity-focused meeting since 2022 when governments struck a historic deal to halt the destruction of ecosystems. Scientists, Indigenous communities, business representatives, and environment ministers from nearly 200 countries will discuss progress towards the targets and negotiate how they will be monitored. Here is what is at stake.
Ever since humans began to organize, we have grossly mispriced nature in favor of taking, not preserving. We incentivize chopping down forests, burning fossil fuels, and overfishing oceans.
It’s not that we love sacrificing orangutans for palm oil. It’s just business. Humans value the few orangutans we send to zoos, but none on orangutans who remain in the forest canopy. Quite the opposite, eliminating orangutan habitat allows us to increase palm oil production.
We are really good at putting a price on something we extract from the Earth. We have hundreds of years of experience figuring out the cost of mining coal down to a penny. But we have no way to price the loss of all the trees, springs, or wildlife lost when you strip mine the coal. When calculating the Gross Domestic Product, environmental destruction is counted as positive growth!
Past the tipping point
Not surprisingly, we have passed the point that this approach to nature is sustainable. With more than eight billion inhabitants, the science is clear: if we don’t rebalance our increasingly toxic relationship with nature, all the existing efforts to solve the climate crisis will fail.
That is why it is worth focusing on the world’s first Global Nature Positive Summit 2024 held last week in Sydney, and this week’s United Nations biodiversity conference in Colombia. The Sydney conference was not just another “whine fest,” or a forum for gaseous platitudes. It was the latest convening focused on how to positively price the preservation and regeneration of the Earth’s biosphere.
As Australian journalist Murray Hogarth reports exclusively in Climate & Capital, the conference, sponsored by the Australian government and Rockefeller Philanthropy Advisors, is part of an ongoing series of convenings to build a global framework for a nature-positive movement that seeks to strengthen the Earth’s biosphere and mitigate climate change — and make it business as usual.
Done well, this could set the stage for a new nature-based economy that will unlock hundreds of trillions of dollars of “natural capital.” “For too long, nature has been treated as a cost to business, rather than an opportunity to enhance sustainability, acceptability and, ultimately, profitability,” says Noëlle Kümpel, Senior Advisor at BirdLife International, the world’s oldest and largest partnership for nature.
To do that. Hogarth reports that negotiators are developing a set of standards and guidelines called the “State of Nature Metrics Framework” that will make it easier to finally put preserving nature on the same footing as exploiting it.
According to the World Economic Forum, the carrot is a $10 trillion a year economic opportunity to preserve rather than destroy nature.
Old habits die hard
But it won’t be easy to break old habits. Mckinsey says that only about one in five Fortune Global 500 companies track three or more dimensions of nature in their reporting. Only 15% say their biodiversity plans are being implemented, compared to 23% for net-zero carbon plans. And most large US banks lack the means to establish goals, strategies, and procedures to quantify the value of biodiversity and natural capital, says Delloite.
Building a nature-positive economy will also require banks and investors to begin incorporating natural capital into their business models and risk management processes. McKinsey says the world’s largest holders of capital—the giant pension, insurance, and sovereign wealth funds—will also need to recognize and value the long-term investment benefit of preserving biodiversity.
Wanted: Nature-positive billionaires
Some investors are beginning to see an opportunity.For example, the New York Stock Exchange has created a new vehicle called Natural Asset Corporations (NACs) that can convert natural assets into financial capital that is then sold to investors, corporations, and sovereign wealth funds as a new asset class.
So pay attention as this pro-nature roadshow winds through upcoming UN climate, biodiversity convenings, and the Word Economic Forum in Davos.
It’s the beginning of a mega trend that will coin its first billionaire before you know it.
