Why we can’t overlook nature-related risks and opportunities

Human society is inextricably linked with, and dependent on, nature. Natural assets provide a variety of critical ecosystem services which support human health and well-being, such as providing food and water, regulating environmental conditions (air purification, carbon sequestration and protecting against hazards such as floods and wildfires), and supporting recreation and cultural or spiritual practices. These services are worth an estimated $125 trillion annually, and more than half of the world’s GDP is moderately to highly dependent on them.

Climate change is accelerating the degradation and loss of natural assets and ecosystem services. Rising temperatures and changes in precipitation patterns are affecting biodiversity, which in turn impacts many aspects of society. In Europe, the most important tree species for timber production, the Norway spruce, is projected to shift northward and to higher elevations, losing large areas of its current range by 2100 due to climate change. This affects carbon sequestration and local biodiversity, and could lead to disruptions in supply chains.

Sensitive ecosystems and their services are also at risk of being lost. Mangroves may not survive in their current areas if sea levels continue to rise at current rates; these important habitats absorb carbon, provide habitat for hundreds of threatened species, and protect coastal communities against flooding, so their loss could have widespread knock-on effects. In many cases, the effects of climate change are occurring too rapidly for ecosystems to adapt. The IPCC predicts that risk of species extinctions and ecosystem collapse will escalate rapidly with rising temperatures.

Climate change may also facilitate the spread of invasive species, or result in new public health crises. For example, forecasted shifts in the yellow fever and Asian tiger mosquitos’ ranges due to changing climatic conditions demonstrate that nearly one billion people could be exposed to mosquito-borne diseases for the first time by 2080.

In addition to the threats posed by increasing temperatures, extreme climatic events such as wind, wildfire, pluvial and riverine flooding, are further damaging vulnerable ecosystems. Heatwaves, such as the ones seen across Europe last week, can cause mass die-offs of marine and terrestrial species, as well as damage pollen and kill pollinators such as honeybees, interfering with the fertilization of crops and reducing yield. The 2019-2020 wildfires in Australia killed or displaced almost 3 billion animals, and are now known to have been made more likely due to climate change. Fires also burn away vegetation, which can have knock-on effects, for example increasing the risk of dangerous mudslides.

In recognition of the risks that nature loss poses, many organizations are turning their attention to initiatives such as the Taskforce for Nature-Related Disclosures (TNFD). The TNFD enables organizations to understand and incorporate environmental risks and opportunities into their decision-making, with an aim of shifting finances towards nature-positive outcomes. We are proud to be supporting their work as a member of the TNFD Forum.

Nature-based solutions are also being increasingly incorporated into climate strategies. These address major societal challenges while benefiting both natural areas and human well-being; for example, restoring mangrove forests to reduce flooding risk while also storing carbon. Equally, we need to understand the climate risk these nature-based solutions face and plan around them. Nature underpins our societies and economies, and it also has value in its own right.

As the climate and nature crisis deepen, it is more important than ever to gain insights into the risks that climate change poses to natural assets and ecosystems. Having a clear and holistic picture of these, and a strategy for mitigation and adaptation, will help organizations that manage or depend on natural assets make climate-informed decisions.

At Cervest, we collaborate closely with the TNFD and understand the most efficient way to extract information and include it in our climate intelligence solution – helping you to gain a clear insight into nature-related risks and plan accordingly.

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