Let’s stand back for a moment and consider the broader context. Climate and nature are interdependent. We’re facing a climate crisis and an unprecedented decline in nature.
Summer 2023 saw extreme weather events worldwide, particularly in the northern hemisphere, with Europe experiencing record temperatures and wildfires. More than 80% of the EU’s natural habitats are in poor condition and there’s an urgent need to restore what has been lost to avoid significant risks to our financial system. Healthy, functioning eco-systems contribute to the well-being of society, and underpin our food systems and the broader economy.
The World Economic Forum estimates that over half of global GDP is moderately or highly dependent on nature – $44 trillion (US dollars) potentially threatened by nature loss. This issue affects all businesses in some way, whether directly or through the supply chain. Businesses, therefore, need to think about their role in protecting natural resources and their ecosystems.
The threats to nature loss and potential solutions are more visible to businesses directly involved in land management, such as farms and estates. The impact of small changes can be seen with the naked eye. Those changes have a ripple effect, delivering much wider benefits to the environment and society. As businesses, farms and estates cannot ignore the financial implications of changes to the way in which they manage land.
With the introduction of Environmental Land Management Scheme (ELMS) and new statutory Biodiversity Net Gain (BNG) rules, the government is actively encouraging landowners to consider the potential financial benefits of sustainable land management – although there will be many conflicting views on whether the proposals go far enough. Nevertheless, policy, economics, the climate agenda, and landowners’ innate sense of stewardship do seem to be pointing in the same direction.
Landowners sit front and centre of the emerging natural capital market.
Nature-based solutions, focused on enhancing natural habitats, are one of the cheapest and most effective tools we have in the fight against climate change to meet the goals of the Paris Agreement. However, there are many competing interests for governments to balance and to meet the cost of delivering net zero by 2050 – governments, landowners and private sector businesses will need to work together.
The UK government acknowledges that the private sector will be key to delivering net zero. Accordingly, it is:
- Reviewing incentives for investment in decarbonisation
- Building skills needed for the transition
- Developing a Net Zero Charter mark, acknowledging “best in class” among businesses for their work in reaching net zero
Corporate net zero commitments are rising. The Deloitte 2023 CxO Sustainability Report rated climate change as a “top three issue” for organisations. It’s an issue that we and many of our clients, across all sectors, are actively addressing. However, trust in businesses to act on climate change remains low and is up to business leaders to show how they are acting to address the climate crisis.
As a business, Mills & Reeve is committed to minimising its impact on the environment. We promote environmental sustainability in all aspects of our operations and recognise our responsibility for guardianship of the environment. For the last 15 years we've sponsored the Norfolk Grey Partridge Award, focused on habitat restoration and creation, and we're looking to broaden this out. We are committed to achieving net zero by 2050, with at least a 35% reduction in emissions by 2031 and a 90% reduction by 2050, although we're aiming to do better than this. We'll need to offset the emissions that we cannot eliminate – we do not want to simply write a cheque. We're actively looking for opportunities to partner with clients by investing in projects that will have wider benefits for them, our business, and the environment.
Businesses not only need to address their carbon footprint but also their natural footprint to create and protect value for both business and society.
There are many statistics but they all support the same message: it's important that businesses take action. 50% of workers want their employers to demonstrate climate and social commitments. 72% of people say it's important that the businesses they buy from take climate action.
There are, of course, wider health, social and education benefits to restoring nature. For example:
- Improvement in physical and mental health reduces average health care costs for whole population
- Increased tourism, bringing investment and creating new jobs for local community
- Access to community groups and charities to learn the importance of nature restoration and illustrate the importance of jobs in the green economy
The value of natural capital is immense. We have an opportunity to collectively harness and manage natural resources for impact on a global scale, which can protect them for future generations. Whilst there are many challenges, there is reason to be optimistic but urgent action is required. To quote our King: “We are the first generation to know in full scientific detail that we are breaking our planet’s life support systems…and the last that can do anything about it”. A sobering thought.
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