Goal A1. Step 3
Nature underpins our entire economy, our prosperity and our wellbeing. It might not be clear now but your business depends on a healthy planet.
Allowing the continued destruction of nature and loss of biodiversity poses risks to the future continuity of your business.
More and more, investors and banks are looking for robust, nature positive environmental strategies and clear Environment, Social, Governance (ESG) reports as part of their lending criteria. Failure to engage in the nature positive movement could have a negative impact on your ability access to finance for future growth.
We don’t yet fully understand the breadth of risk associated with nature loss but we know that the complexity of the interplay between impacts and dependencies over time can have negative consequences affecting cashflow and earning potential. This ultimately translates to financial risk, including market, credit and liquidity risk.
There is scope to position your business as a leader in this nature positive space delivering on mandatory reporting requirements like CSRD, and providing lenders/insurers with clear deliverables through your nature positive strategies. Efficiencies, waste reduction and localising your supply chain can help lower your operational costs.
The EU Commission estimates that every euro that is invested into nature restoration adds €8 to €38 in benefits.[1]
Insurance
Insurance companies are already loading premiums because of environmental risk. In 2020, the US insurance sector paid out around $80bn in claims because of natural disasters.[1]
Reputation
Your customers are changing. More people are looking for sustainability credentials from the companies they engage with.[2,3]
A strong sustainability agenda will redefine what it means to have a competitive edge in the next decade and an absence of a meaningful nature positive sustainability strategy may result in your customers looking elsewhere.
Certain sectors may be subject to stigma. You can gain ‘first mover’ advantages if you bring a nature-positive product or service to your market.
[2] https://www.firstinsight.com/white-papers-posts/the-sustainability-disconnect-betweenconsumers-and-retail-executives
[3] An EcoWakening_Measuring awareness, engagement and action for nature
Supply
The supply of raw materials, water, food and energy is ever more fragile. This makes business very vulnerable to operational disruption. The cost of raw materials is also increasing, exposing business to additional cost risk. Choosing business inputs that have been sustainably sourced or produced reduces this risk.
Stakeholders
Your employees and local communities want to see change. In some cases, you might require a social licence to operate (community trust, legitimacy and credibility) and this can only be achieved by engaging with your stakeholders. Having a robust biodiversity agenda can help to attract and retain talent for your business.
Regulatory
The Corporate Sustainability Reporting Directive went live in January 2023, and even if you don’t come under its scope, a large customer of yours probably does and they will seek positive change in their value chain. Need to know more on CSRD and Nature? Failure to comply with required reporting directives will carry penalties or litigation risks.
Operational
The increased frequency and severity of weather events may lead to the disruption of operations within your business. Rising sea levels and rising temperatures may also have a direct or value chain impact.
Got any queries or suggestions? Get in touch via our contact form below or at manager@businessforbiodiversity.ie
Business for Biodiversity Ireland were awarded the Climate-Positive Website Accreditation by the Eco- Friendly Web Alliance
Business for Biodiversity Ireland is a not-for-profit organisation supporting businesses in their journey to nature positive.