One of the most frustrating facets of sustainability is a feeling that there are sensible solutions out there – we are just not harnessing them or in some instances, ignoring them.
Take funding of nature-based solutions, for instance. The State of Finance for Nature report released at COP28 by the United Nations Environment Programme (UNEP) showed that financing in activities that have a direct negative impact on nature outweighs financing that has a positive impact on nature by a scale of 30 to 1. That nature-damaging finance totals US$7 trillion – the annual GDP of Germany and the UK combined.
Seven trillion dollars is a number hard to fathom, but it was also a figure mentioned by Deloitte in its Financing the Green Energy Transition report which stated that achieving net-zero greenhouse gas emissions by 2050 will require an annual global investment in the energy sector ranging from US$5 trillion to US$7 trillion.
So a simplistic argument may be to take that financing that is damaging nature and instead channel it to achieve net zero.
In its report, Deloitte added that the world currently invests less than US$2 trillion each year into that transition, and that green projects suffer from underinvestment because private investors tend to see green technologies as riskier than alternative investments.
This is backed up by the UNEP report which showed private nature-negative finance is 140 times larger than private nature-based solutions, a whopping US$5 trillion.
So, what are nature-based solutions, how can they help fight climate change, and why should the private sector in particular be investing in them?
Nicole Rycroft is the Founder and Executive Director of Canopy – an award-winning environmental non-profit that works with more than 1,000 corporations – including Amazon, IKEA and Inditex – to implement sustainable solutions that scale nature-positive economies.
“Nature-based solutions are actions and initiatives that protect and restore nature, including forests,” Rycroft tells Sustainability magazine.
“Carbon intensive supply chains are relics of the 20th century and need to be left back there. We can scale both nature-based solutions as well as the infrastructure transition to low-impact Next Gen materials, renewable energy and regenerative agriculture by redirecting that US$7 trillion of dirty (or nature-negative) investments.”
Rycroft says conserving forests and nature keeps our most effective carbon-capture systems working, and that forests have been identified as the fastest, cheapest, and most effective way to stabilise our climate, with the potential to provide 37% of the CO2 reduction needed to keep the rise in global temperatures below 2℃.
Canopy was founded 24 years ago, with Rycroft believing that the human race was smarter than “mowing down 400-year-old trees to make single-use packaging or T-shirts”.
Over 3.2 billion trees are cut down every year, many of which hail from the world’s most integral forests, to produce paper packaging or to make fabrics like viscose and rayon for clothing
While progress has been made in recent years, there is still so much more that needs to be done, but the brands backing Canopy (such as LVMH, Inditex, Amazon, Walmart, H&M, Ben & Jerry’s) are all transforming unsustainable supply chains and promoting innovative alternatives.
“We partner with these brands to help them develop and implement cutting-edge environmental policies that ensure their paper, packaging and viscose textiles don’t originate from the world’s Ancient and Endangered Forests and transition to low-carbon, circular, Next Gen alternatives,” explains Rycroft.
“This work together has played a critical role in helping secure 39 million acres of large-scale conservation gains in forests globally.”
A big focus for Canopy is accelerating the production of Next Gen textiles and packaging, made from waste inputs such as discarded clothes and wheat and rice straw instead of wood – such as at the world's first commercial scale textile-to-textile pulp mill in northern Sweden.
This all sounds positive, so why are businesses and investors so behind when it comes to investing in nature-based solutions? Why has biodiversity been left on the back-burner?
Rycroft says while corporate biodiversity pledges are increasing, these remain infrequent when compared to headline-grabbing CO2 emissions reduction plans – and despite the growing market for sustainable materials, conventional supply chains still attract financial support.
“Businesses and investors are behind in investing in nature-based solutions due to the inertia of maintaining business as usual, with factors including established financing in conventional infrastructure and perceived risks of investing in innovative solutions,” says Rycroft, echoing the sentiments of the Deloitte report.
“The scale of investments required to shift many carbon-intensive supply chains, like forestry and energy, are significant and there’s been a lack of comprehensive and enabling policy. But change is coming…. Increasingly brands recognise the imperative of acting on biodiversity.”
Nature-based solutions – good for business
Many of those early-adopters that Canopy works with are from the fashion industry, who have removed high-impact forest sourcing from their viscose and packaging supply chains.
Take Take the world leader in luxury, LVMH. In addition to ensuring its paper, packaging and fabric supply chains are free of fibre from the world’s most vital forests, the fashion conglomerate and its Maisons is also supporting the development of Next Generation Solutions. These circular economy alternatives include smart design as well as game-changing innovations such as the use of agricultural residues, recycled textiles, and microbial cellulose to manufacture paper, packaging and textiles instead of endangered forest fibre.
Another example is Inditex – the fast fashion giant behind brands including Zara, Massimo Dutti and Pull & Bear – which has more than 7,200 stores worldwide.
Rycroft explains that Inditex was one of the first to sign up to CanopyStyle – an initiative dedicated to ensuring the world’s Ancient and Endangered Forests aren’t logged to make viscose textiles that now has 550 brand partners representing US$1 trillion in annual revenues.
In addition to helping create the market incentives for producers to eliminate risk, Inditex has also invested directly in spurring the production of low-carbon alternatives such as clothing made from discarded textiles.
But it’s not just the fashion industry that needs to smarten its approach to nature-based solutions and conserving forests – this should be part of every organisation’s sustainability strategy, according to Rycroft, describing such a stance as “a home run for companies looking to advance climate, biodiversity and community goals”.
She says that every business that depends on resources drawn from nature is at risk as the climate and biodiversity crises increasingly disrupt supply chains.
By dedicating resources to nature-positive investments, companies can help conserve and restore forests and nature, which in turn builds supply chain and business resilience – and potentially new revenue opportunities.
Nature-based solutions can also help reduce a company’s carbon footprint as well as improve purchasing practices and environmental performance – all key KPIs for any self-respecting business – and doing good never goes out of style.