The nature emergency we are experiencing right now is a threat to our lives. However, it appears that there is a huge neglect when it comes to mitigating its effects on the side of businessmen and the private sector.
Apart from saving human lives, they have another motivation for dedicating more attention to the state of the global climate — it also can ruin their business. This is according to the World Economic Forum (WEF) in their report, Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy.
The hidden risks of nature loss from business arise from three factors:
- Risks emerging from dependency of business on nature
- Risks emerging from the fallout of business impacts on nature
- Risks emerging from impacts of nature loss on society
Let’s inspect each one by one.
Dependency of business on nature
All businesses have some level of dependency on nature. In industries that are highly dependent on nature are the source of at least 15% of the global GDP.
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Furthermore, WEF’s research shows that a whopping US $44 trillion worth of economic value generation emanate from sources that are moderately or highly dependent on what nature can offer.
Nature loss can directly affect operations. They can also hamper the flow of the supply chain. Physical security and business continuity are also threatened with the resources used to keep the business going under direct damage.
Fallout of business impacts on nature
Businesses that are highly resource-extensive or environmentally-destructive are also likely to be directly or indirectly hit by regulatory and legal pressures.
With consumers being more aware of the damages that some businesses can cause to the environment, they are pressuring leaders to create policies which would penalize companies that are not willing to adjust.
Impacts of nature loss on society
Natural disturbances are linked to the increased number of disease outbreaks as of recent time. Examples include the Ebola and Zika virus. Water shortages, deforestation, and forest fires are other occurrences that are worsened and made more frequent by anomalous natural conditions.
These environmental instabilities are linked to an increased incidence of violence. WEF said that the onset of the Syrian war, for instance, was linked to the drought experienced in the region.
With geopolitical instabilities as well as the high level of dependence of the rural poor to nature, economic development is also stagnated.
Managing nature-related risk
The world is experiencing a significant momentum in safeguarding nature. Knowing the huge and diverse impact that the destruction of nature can cause to their operations, businesses should follow suit.
Businesses should begin to reconsider rethinking their business models and production processes so that they can help in decelerating nature loss as well as eventually assisting in environmental restoration.
As the people continue to sense the urgency in resolving the ills of our world, businesses who will fail to respond to this call to action will be left behind. Investing in sustainable practices for the long term is a win-win situation for everyone.