Fifteen years after the publication of the landmark study “The Economics of Climate Change: The Stern Review”, the Treasury of the United Kingdom commissioned “The Economics of Biodiversity: The Dasgupta Review” to better understand our social and economic impacts and dependency on nature. The independent review, led by Sir Partha Dasgupta, Professor Emeritus of Economics at the University of Cambridge, concludes that it will ultimately cost less to take measures now to avoid losing biodiversity than it will to pay for restoration (where that is even possible) once it has been further degraded or lost. This conclusion, among other details in the review, has lessons for all aspects of society around the world, from government to business to individual citizens.
The real cost of nature’s decline
Our relationship with the natural world has never been more important. The Dasgupta Review issues stark warnings for human prosperity if biodiversity continues to be lost at the rate it has been for the past several decades. It explains how, just as with a financial investment portfolio, diversity in nature (biodiversity) is critical for protection against shocks and for improving resilience. Our economy is embedded within nature – and with the climate emergency, ecosystem breakdown and food insecurity, it is fragile and vulnerable.
Redefining how nature is measured and valued is critical. Financial markets have failed to take externalities of systems and products into account, thereby obscuring their full costs to society and hiding the true impact of our growth and consumption. Valuing financial and manufactured capital while ignoring or neglecting natural capital is what has caused us to overshoot the carrying capacity of the Earth and we know that business as usual is not sustainable. And as the Dasgupta Review explains, maintaining the world’s current living standards would require 1.6 Earths – yet there is no ‘Planet B’.
Helping businesses become nature-positive
The evidence presented in the review indicates that it is imperative for governments, businesses, and citizens to play a role in ensuring a prosperous future. This goes far beyond corporate social responsibility and affects the future viability of every business around the world.
Whether a consumer goods company, consultancy, public services provider, supply chain contractor or landowner, organizations will require a re-evaluation and re-orientation of their purpose and priorities. To rebalance our demand with nature’s capacity to supply resources, the business sector needs to fully understand the impacts and dependencies it has on nature and what is truly material.
This can best be achieved through collaboration and knowledge sharing. Coming together to advance natural capital approaches, set industry standards, incorporate multidimensional measures of value and discuss challenges can take us forward on this path. Initiatives such as Business for Nature, the Taskforce on Nature-Related Financial Disclosures and the UK Business and Biodiversity Forum are just some examples of the key opportunities for businesses to contribute to and inform this future direction.
Incentives for steering businesses in the right direction are starting to take shape. Governments are starting to take action, for example, by removing harmful subsidies in favour of payment for public goods, committing to achieving net zero emissions by mid-century, increasing the amount of land and sea protected for nature, the establishment of landscape-scale strategies for local nature recovery, and shifts in the finance sector to investing in nature-positive solutions. In line with the UN’s Convention on Biological Diversity (CBD COP15) biodiversity commitments due to be agreed in October 2021, the UK Government has committed to set a new world-leading target on species populations for 2030 aimed at halting species decline.
Every business should start by looking at its relationship with nature in order to be Future Ready. Technological innovations and alternative ways of defining value are available. Opportunities for organizations to truly embed biodiversity and natural capital considerations into their business models have now come to the fore to send us on a sustainable path to prosperity.