Howard Waples will be participating in a panel discussion at Environment Analyst’s UK Business Summit on 30 November, where he will share insights on how to foster real change to achieve a nature-positive economy. Here, he shares an introductory preview of the main points for discussion.
EA: What are the most powerful mechanisms for helping businesses ensure they have a positive impact on nature?
HW: Unlike a concept such as biodiversity net gain (BNG) – that has a statutory requirement and a government-backed metric – there is no single agreed definition of what ‘nature positive’ is. However, good practice suggests that four fundamental aspects that should form the core to all[1]:
- Demonstrating positive biodiversity outcomes across the entire value chain ("scope");
- Buy-in throughout the entire organization ("mainstreaming");
- Integrated consideration of different components of nature (e.g. both biodiversity and climate; "integration"); and
- Measurable outcomes against a fixed baseline aligned with overall societal goals (e.g. post-2020 global biodiversity framework; "ambition").
The most powerful mechanisms are those that are the most fit for purpose. To consider that, it’s useful to consider what is the purpose of a business? Definitions vary, but in essence it’s to provide some sort of production of goods or services in an economic way.
Of course, we are dealing with a vast range of businesses, who will have incredible variation between what they impact and can be impacted by. Therefore, from the outset, an effective scoping and materiality assessment is essential, and in doing so it needs to get buy-in from senior leadership.
As for the tools, mechanisms and approaches, there are some clear variations in terms of usefulness:
- BNG would only be effective as a policy/process if that’s reflective of an organisation’s main impacts and dependencies.
- Natural Capital Accounting for Organisations is another tool, and BS 8632 (2021) is an example of how to present the impacts in a consistent way, to allow effective monitoring.
- TNFD is more about identifying risks, compliance and protecting and securing assets, which might not be suitable for many organisations.
Therefore, the selection of the appropriate tool really does depend on the company. This aligns with the Natural Capital Protocol[2] and the Nature Positive Business Pledge[3].
EA: Are existing mandatory requirements enough, and if not, what other options are there to incentivise change?
HW: It’s about getting the balance right. Businesses often flourish better in the absence of stringent regulation, but if you consider what we mean by flourish, it can help put the focus on where the regulation should be. A flourishing business could be one that makes large operating profits, and it makes those from the exploitation of natural capital without replenishing this capital in one way or another. Or it could be one that operates not for profit, or modest profits, most of which is reinvested in regenerating the natural capital it has consumed.
The question is whether a company should be required to put back more than or an equivalent to what they take out? A fundamental point identified in some recent research is the need to tackle "asymmetric power relations underpinning the allocation of property rights"[4].
Further incentivisation of change can follow some already established sustainability process, for instance contractual requirements applied to the supply chain for meeting social value and decarbonisation targets. As the mechanisms are already there, along with heightened awareness across supply chains, it is unlikely to be as challenging to apply extra nature-positive requirements.
EA: What are the main approaches to ensuring that a nature-positive approach is also profitable and socially equitable?
HW: Nature is an asset that we all have a fundamental right to. The natural capital that holds the value should not be seen purely as an asset that can be claimed and effectively extracted to bolster financial returns to an ever wealthier group of people.
That’s not to say that resources such as food, gas and minerals should not continue to be extracted and used. It’s just that to do this, a great deal more work would be required to understand the myriad of value associated with its production, to allow a fair and just degree of compensation to achieve true nature positivity.
There are various approaches to ensuring nature positive is also economically sustainable and drives social equity. These could be integrated approaches such as the 'triple bottom line' and 'six capitals' (i.e. financial, manufactured, intellectual, human, social/relationship and natural capital) models.
A key point to consider with these approaches is the timescales involved, as using only short-term horizons might see nature positive only as a cost, without recognising the longer-term value it would bring. Similarly, to social inequality, a short-term view might be that labour should be as cheap as possible, but in the longer term, this failure to invest in the workforce will make it much less resilient and put the whole company at risk.
As part of our sustainability strategy, in 2021 Tetra Tech launched the first-of-its-kind measurement of the global impact of our projects and progress toward our '1 billion people challenge', which measures project impact and lives improved around the world. With the addition of 138 million people over the past year, we have improved 545 million people’s lives. We report improvement in people’s lives by evaluating five metrics[5] that align with the UN SDGs and track the ESG benefits of the projects we perform profitably.
EA: What are the options for companies in sectors where strategy and purpose are fundamentally misaligned with nature-positive outcomes?
HW: Referring to the earlier reference to the question of the purpose of a business, those businesses that are fundamentally misaligned with nature positivity due to their consumption and degradation of natural capital, are arguably not fulfilling the economic need of a business. Business economics needs to be just and responsible, regenerative and sustainable (to fulfil the needs of future generations), not exploitative and irreplaceable.
Companies that follow an exploitative model have the option for transparency and honesty about the impacts and dependencies they have on nature, along with all capitals. As mentioned before, an adequate scoping and materiality stage assessment would be key to this, as well as buy-in from the senior leadership and other stakeholders. Key to these are investors, who may need to recognise that the returns/dividends that they receive are directly linked to the exploitation of resources, and that given these are finite, should be cognisant of longer-term stable returns, as opposed to boom and bust.
Global trading markets and the financial system have historically operated with a goal of perpetual growth, but more so in recent years, there is recognition that the bubble must burst. There must be recognition that we are all part of one giant interconnected global ecosystem, and those who exploit unsustainably not only damage the rest of humanity, but also self-sabotage.
Therefore, there should be a fundamental expectation of regenerative business and leaving the smallest footprint, whilst still fulfilling the needs of a business.
EA: Can you outline any particularly effective ways of financing nature-based strategies and solutions that you have come across?
HW: This aspect of natural capital is fast moving, and new approaches are still emerging. However, a good place to start would be to look at ‘blended finance’ which is based on collaboration[6]. It brings together government, private finance, philanthropic investors and corporates.
There are a growing number of good examples of how nature-based strategies can be financed. For instance, the Greater Manchester Combined Authority (GMCA) has implemented the IGNITION project[7]. This was backed by €4.5m from the EU’s urban innovation actions (UIA) initiative and saw twelve partners collaborating to build an understanding of the challenges and opportunities surrounding greening our urban environments and engaging vital stakeholders to drive action. The partners come from local authorities, academia, NGOs and businesses.
Tetra Tech is involved in a number of nature finance initiatives around the world, some examples of which are on our website[8]. In England, a key area of focus for us at the moment is to support our clients (mainly developers, local authorities and landowners) with biodiversity markets that are appearing as a result of the Environment Act (2021), which mandates a 10% BNG.
To do this, we can provide initial and detailed site appraisals to establish the biodiversity baseline of an area (in terms of the habitats typologies it provides and their condition), the cost of enhancing and managing the habitats on these sites, and the monetary value of the biodiversity units they can create. This enables an accelerated and joined up approach to nature recovery, and Tetra Tech is excited to be playing a part in this.
---
Hear more from Howard at the UK Business Summit on 30 November in London, where he will participate in a panel discussion alongside speakers from Atkins and the Capitals Coalition.
---
[1] Zu Ermgassen et al (2022): Are corporate biodiversity commitments consistent with delivering ‘nature-positive’ outcomes? A review of ‘nature-positive’ definitions, company progress and challenges
[2] Capital Coalition (2016): Natural Capital Protocol
[3] Business Biodiversity (2022): Nature Positive Business Pledge
[4] Pascual et al (2023): Diverse Values of Nature for Sustainability
[5] Gallons (GL) of water per year treated, saved, or reused • Megawatts (MW) of renewable energy per year identified, planned, or generated • Hectares (ha) of land and water per year protected, managed, or restored • Metric tons (MT) per year of CO2 e avoided or captured • Number of lives benefiting from social and governance programs.
[6] Earth Solutions (2021): The Blended Finance Playbook for Nature Based Solutions
[7] https://www.greatermanchester-ca.gov.uk/what-we-do/environment/natural-environment/ignition/
[8] Tetra Tech International Development: https://intdev.tetratecheurope.com/our-projects/