A planetary boundaries approach is the only way for business to tackle nature-related risks

In brief:

  • The impacts of business activities go beyond climate; and many companies are dependent on other Earth systems for raw materials and ecosystem services.

  • Climate, biodiversity, water and other environmental challenges can’t be addressed in silos.

  • Companies that focus solely on climate ignore other important environmental impacts and dependencies that they need to address.

  • The planetary boundaries framework allows companies to apply a wider lens to evaluate their exposure to nature-related risks and understand how they’ll need to adapt in a changing world.

  • A planetary boundaries approach can help companies think about problems differently and drive innovation.

Environmental risks go far beyond climate change, and companies are increasingly expected to report and act on a broad range of nature-related risks. These risks equate to $44 trillion of economic value generation, roughly half of global GDP. Nature loss and degradation isn’t just an environmental problem — it’s a business problem.

Managing and mitigating nature-related risks and thriving in a resource-constrained world will require companies to take a more holistic approach. Operating within planetary boundaries is the only way businesses will be able to protect themselves from nature-related risks and navigate uncertainty.

Carbon tunnel vision is blinding business to major risks

Climate change is undoubtedly one of the most pressing challenges of our time, and is the source of a vast array of water management strategies that help reduce their dependency will also reduce their exposure to physical risks, such as droughts, as well as transitional risks, such as a rise in prices. 

While the long-term benefits of operating within planetary boundaries are clear, the short-term benefits of this approach shouldn’t be underestimated. A company that addresses its contribution to nitrogen and phosphorus pollution by reducing its use of fertilizers also decreases its dependence on external inputs they have little control over (while simultaneously cutting its climate, water and biodiversity impacts). In the event of an energy crisis or high inflation where the cost of fertilizer may rise, their operating costs won’t increase as significantly.

A planetary boundaries approach helps companies think about problems differently, enabling them to become more agile and open the door to new opportunities. Rather than viewing boundaries as barriers or markers for danger and disruption, businesses can use them as a jumping off point for innovation. How can we generate value while reducing our dependence and impacts on natural resources? Does our current business model facilitate that? What needs to change?

Those that continue on a business-as-usual path are putting their market share at risk, as other companies come in with more sustainable options that are more appealing to consumers. By adopting a planetary boundaries approach now, there’s an opportunity to be a first mover, developing ideas and gaining market share over competitors. 

A planetary economy or bust

2030 is fast approaching and a wave of regulatory changes are on their way. Climate, biodiversity, water and other environmental challenges can’t be addressed in silos. An integrated approach is needed now to tackle the environmental crisis. 

Now is the time for companies to adopt a planetary boundaries approach.

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