State of Green Business

Trend: Companies warm to nature-based solutions

Aerial view of forest
ShutterstockAvigator Fortuner

In the never-ending quest to stave off the worst impacts of climate change, experts are turning to a solution that’s as old as the trees: actual trees.

The idea of using mighty maples, ponderous pines, majestic evergreens and other arboreal wonders to absorb greenhouse gases is hardly new. For years, everyone from school-age kids to corporate executives has embraced the idea, a concept that’s easily understood and in which nearly everyone can participate.

More recently, tree planting has been at the center of a larger set of so-called "nature-based solutions" that harness the power of ecosystem services to mitigate effects of the climate crisis. A global effort is shaping up to bring awareness — not to mention funding — to nature-based solutions that increase resilience and carbon sequestration while addressing a wide range of social and environmental challenges.

"Nature-based solutions are interventions which use nature and the natural functions of healthy ecosystems to tackle some of the most pressing challenges of our time," says the International Union for Conservation of Nature, a global environmental organization. "These types of solutions help to protect the environment but also provide numerous economic and social benefits."

And companies are lining up to participate, often as part of business alliances aimed at supporting nature-based solutions. A few leadership firms are working directly with local governments and communities around the world to leverage nature’s inherent genius.

Regulating the climate is just one of many services provided by healthy natural systems. Nature-based solutions are finding their place in food production, disease prevention, air filtration, water purification, waste minimization and other processes. All of these opportunities are coming under the gaze of business and sustainability groups seeking to advance these relatively simple tools.

There’s significant potential here. More than 30 percent of the cost-effective tools to address climate change by 2030 can be found in nature-based solutions and the shift to more sustainable agriculture and land use choices, according to a 2019 report from the Food and Land Use Coalition (FALU).

FALU is part of a larger coalition of nearly 40 organizations, Business for Nature, whose goal is "to reverse nature loss and restore the planet’s vital natural systems on which economies, well-being and prosperity depend." Its members include the World Economic Forum, World Business Council for Sustainable Development, the We Mean Business Coalition, the International Chamber of Commerce and other groups representing companies on nearly every continent.

Business for Nature lays out the rationale for companies to support nature-based solutions. It points out that nature loss has concrete and immediate costs and risks for businesses, including operational risks; supply chain continuity, predictability and resilience risks; liability risks; and regulatory, reputational, market and financial risks.

So far, more than 350 companies have made commitments to help reverse nature loss and restore vital natural systems on which economic activity depends. Most of these commitments are through business partnerships.

For example, through the AgWater Challenge — spearheaded by the nonprofit groups Ceres and WWF — ADM, Diageo and Kellogg are among those developing timebound and measurable commitments to reduce the water impacts associated with key agricultural commodities. Another coalition, led by We Mean Business and CDP, helps companies commit to removing commodity-driven deforestation from their supply chains. It includes General Mills, Kering, L’Oreal, Nestlé and Procter & Gamble. Still another, act4nature, whose members include BASF, Bayer, LVMH and Unilever, commits to "integrating nature — environments, animals, plants, ecosystems, interactions and genetic heritage — into our strategies and business models."

Business commitments for biodiversity will be front and center in October, when the United Nations Biodiversity Conference will take place in China. Billed by some as the "Paris for biodiversity," the gathering will help focus the world’s attention on the role of nature-based solutions to simultaneously preserve biodiversity and mitigate climate change while addressing several of the Sustainable Development Goals (SDGs). Indeed, restoring degraded natural capital can contribute to addressing SDG goals 1, 2, 3, 6, 7, 13, 14 and 15.

The opportunities for applying nature-based solutions to companies, cities and communities are seemingly endless. In the built environment, for example, nature-based solutions include managing rainwater through green roofs, ponds and wetlands to improve the climate resilience of buildings and infrastructure. In agriculture, they include regimes to protect and pay for nature, especially tropical rainforests, and supporting the indigenous communities whose wisdom is critical to their stewardship.

Protecting watersheds is another. Pasuruan, for example, is home to Danone’s second-largest bottled water facility in Indonesia. The natural spring that feeds the city is declining, and experts estimate the watershed could run dry by 2040. Danone joined forces with public authorities there to invest in land management along the watershed to improve water quality and quantity, and generate long-term benefits for people and nature such as soil fertility improvement, increased yield and biodiversity.

Air pollution is yet another problem where nature-based solutions can help. A study led by Ohio State University found that in 75 percent of the countries assessed, it was cheaper to use plants to mitigate air pollution than using technological inventions such as smokestack scrubbers. "The fact is that traditionally, especially as engineers, we don’t think about nature; we just focus on putting technology into everything," said Bhavik Bakshi, lead author of the study and professor of chemical and biomolecular engineering at Ohio State.

Which brings us back to trees. As part of the 2015 Paris Agreement, many countries’ Nationally Determined Contributions (NDCs) — the plans put forward to reduce emissions — include nature-based solutions. For example, more than half of the NDCs from 75 developing countries or emerging economies establish one or more goals in the forest sector, according to WWF, including targets for afforestation, reforestation and restoration, and for increasing forest cover.

Such measures won’t be cheap and finding the capital could be a major challenge. Some funding could come from commercial opportunities in forestry, specifically from selling the offsets that these measures produce.

"The scale at which reforestation needs to take place, both to reduce emissions as well as to replace the natural systems that have been degraded over many years, is going to require lots of land," said David Hone, chief climate change advisor for Shell. "Globally, we’re talking about hundreds of millions of hectares that need to be converted from whatever purpose it’s being used for today. And that’s going to cost money in both land and reforestation itself." Last year, Shell announced plans to invest $300 million over the next three years in natural ecosystem-based projects. The oil giant said the new program will focus initially on reforestation partnerships in Europe.

Will other companies go out on a limb to launch similar efforts? They may have no choice. As the business case for nature-based solutions becomes clear, such investments likely will become part of companies’ climate strategies — not to mention their efforts to succeed on a rapidly degrading planet.