Only one Earth - why businesses need to make climate-informed decisions about nature based solutions

The theme of this year's World Environment Day, only one Earth, is a good reminder that the risks of climate change are shared. Our atmosphere is a protective blanket. The Kármán line, which sits about 60 miles above sea level, marks the transition point between Earth and space. All of our economies, businesses, communities, ecosystems and natural assets rely on this thin band. It’s fundamental to all life, and universal to everyone.

Human activity has added millions of additional carbon molecules into the atmosphere. As a result, our climate is changing, and these changes will only intensify with time. This impacts the way we live and work, creating wide-reaching physical, financial and social risks for everyone, everywhere, impacting every industry, directly or indirectly. For businesses, this means taking action now to adapt with climate change, to mitigate the impact of our volatile climate, and prove to customers and suppliers that they are acting for the good of our planet.

Organizations looking to reduce their emissions are increasingly incorporating Nature-based Solutions (NbS) into their climate strategies. NbS hold huge promise as a tool to tackle anthropogenic emissions. They could provide about 35% of the emissions reductions needed by 2030, at an estimated implementation cost of $8 trillion, providing a potentially cost-effective and long-lasting solution. European flooding in July 2021 ended up being the costliest EU disaster on record, costing an estimated $13bn dollars. Nature-based solutions such as flood-plain revival and restoring rivers to their natural shape could increase flood resilience.

NbS are projects or initiatives that protect, restore and sustainably manage natural ecosystems in a way that addresses big societal challenges like climate change and promotes human well-being. They are designed to be multi-functional, and create climate resilient infrastructure that also acts as a sink for CO2 emissions. Transitioning land to more sustainable use reduces vulnerability to climate change impacts by reducing water stress, drought risk and flooding risk. As ecosystem resources, they can become self-sustaining over time, reducing costs. They also reduce vulnerability by supporting local economies and communities.

Examples of NbS include coral reefs and mangrove forests that reduce inland flooding risk, or conserving and restoring sustainable forestry projects which enable food security and support local communities whilst providing carbon storage.

Climate change impacts how effective NbS can be. The ability to soak up carbon and reduce vulnerability depends on its capacity to adapt to changing conditions. With rising temperatures, climate zones are shifting and entire ecosystems need to adapt to changing environments - some ecosystems are better at adapting than others. Coral reefs, for example, protect coastlines from coastal flooding and storm damage, but are very sensitive to change, and once lost don’t recover.

When modeling the impact of NbS on future emissions it’s key that we consider how nature-based solutions are just as vulnerable to climate change and potentially at risk as anywhere else. Net Zero targets are based on assumptions that these nature based projects will be successful - which hasn’t happened yet. For example, climate change is projected to mean hotter, drier conditions, and increased risk of wildfire in California which would reduce forestry carbon storage capacity.

Nature-based solutions also face a variety of climate risks, like flooding, storms, or wildfires, and recovery from these extreme weather events can vary greatly. Grasslands can recover more after drought or wildfire than forestry projects, which are much more sensitive. In 2021, Wildfire damaged 7.1 million acres of forestry during the western US wildfires, including 200,000 acres in California, the US’s largest carbon market.

Nature-based solutions are critical, but without effective protection and management, they will never produce the expansive social and economic benefits they are capable of yielding. So how do we integrate adaptation and support them to achieve their full climate action potential? The key is to get visible, risk-adjusted adaptation plans in place for NbS and make shared visibility of climate risk an industry norm.

To protect NbS and give them the best chance of contributing what they are modeled to contribute, nature-based solutions need adaptation plans that are clear about climate risk. Potential physical and financial impacts can be incorporated into wider impact tracking and metrics. This will help to ensure transparency and accountability on calculating carbon offsets.

Whilst climate change impacts are inevitable, with a clear picture of climate risk, and a strategy for adaptation, both the organizations that manage and the organizations that invest in NbS can make climate-informed decisions. Everyone needs to be transparent about the risks — and opportunities — of climate change which can only happen if we all have access to shared information on climate risk. Protecting our natural assets, reducing vulnerability, and building resilience means empowering everyone on climate risk and including them in all decision-making. We can’t build climate resilience by being exclusive.

Climate change impacts every person, business, and asset, including our natural assets. Transforming the potential of Nature-based Solutions from promises into action requires rethinking how we invest, assess risk and manage natural assets and ecosystems.

At Cervest, we recognize strengthening natural assets will be a critical part of a climate-resilient future for many -- if not all -- organizations. Natural assets will be integrated into Cervest’s Climate Intelligence platform in 2022, alongside physical and linear assets Enabling greater visibility of climate risk and natural asset resilience.

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