Nature's invoice
From extreme heat to flash flooding, extreme weather is no longer something businesses can afford to ignore. With costs spiralling and extreme events predicted to continue, how can forward-thinking businesses mitigate the risks, build resilience into their supply chains, and protect the landscapes that help keep us safe?
The impact on the economy
This summer’s heatwaves are likely to have cost €180 billion across Europe [1] and are predicted to reduce EU GDP by 1 per cent, virtually wiping out EU economic growth in 2026. In the UK, the lost harvest is even worse than expected and predicted to cost UK farmers £550 million. [2]
In addition to the heat, excess water is also a major risk. Here in the UK, one in five properties in England are at risk of flooding [3] and British businesses currently face £670 million in flood damage a year. [4]
Nature loss means the built-in defences and critical green infrastructure we depend on is at risk, leaving businesses and communities critically exposed. What can organisations do to help create resilience against future shocks? We’ve set out some advice here on critical conversations to have within your business.
Nature needed for economic stability
The World Economic Forum estimates that over half of global GDP depends on nature, [5] yet extreme weather is adding to the pressures we’re putting on the ecosystems we rely on, leaving many on the brink of collapse.
The situation is so serious that the UK government has issued a National Security Assessment [3] warning about global ecosystem collapse and its effects on food security, national security, supply chain resilience and economic prosperity.
Here are four ways your business can start to address the risks from extreme weather, nature loss and climate change. These tools will also help your business build resilience for the future and help protect the ecosystems your business and many communities rely on.
- Assess the risks of nature loss and climate change to your business
- Understand what aspects of nature you depend on
- Set and implement science-based targets to reduce your impact
- Partner with science-based organisations to restore and protect ecosystems
If you'd like to discuss what more your business could do to support climate and nature, get in touch.
1. Assess the risks to your business
This summer’s extreme weather has exposed the vulnerability of many businesses and their supply chains. Extreme heat, drought and wildfires were mentioned on a record one in 10 earnings calls for large European companies, with many citing it as a commercial risk. [6]
As climate change makes these extreme weather events more common, where are you vulnerable? What might happen to your investment portfolio? Will the cost of insurance for fire, flooding or storm damage become prohibitive?
Asking questions like these now will help you stress test against very real future scenarios. Using tools like WWF's Biodiversity Risk Filter and our Environmental Crimes Financial Toolkit will help you see where you are exposed. See some of our recommended resources below.
2. Look at your dependencies
Does your business depend on healthy soils, clean water, or a regular harvest of certain crops? Which of the commodities that you source are at risk from a warming planet?
If you’re in finance, will your clients or customers be affected by flooding or heat? What about reduced agricultural yields or increased input costs? How will your investments be affected as the world becomes less predictable?
Analysing what aspects of the natural world your business depends on is a crucial discussion for every boardroom.
If you haven’t already started this assessment with a methodology like the Taskforce on Nature-related Financial Disclosures (TNFD), then this is a critical next step.
3. Identify your biggest impacts on nature
While you're looking at your risks and dependencies, you need to think about how your business affects the natural world. For example, are you sourcing your commodities from deforested landscapes, pushing nature further into the red? Are you checking that your investments aren't linked to nature-negative activities?
The best way you can reduce your impact is by setting and implementing Science-Based Targets for climate and for nature. This can be transformational – business action for climate and nature helps to shore up our defences against climate shocks and to protect ecosystems for the long-term.
Thousands of other businesses are already setting targets. See the links below.
4. Partner with WWF
Could your business work with us and set an example for others to follow? We want to work with businesses who are committed to genuine change and can help us protect and restore nature for this generation and the ones that follow.
Our corporate partnerships work with business to restore the resources and key ecosystems on which people and business depend. For example, we’re working with businesses to restore supply chain-critical water basins, scale up sustainable palm oil production, and accelerate the transition to clean, renewable energy. If your business could join us in this mission, we’d love to hear from you.
Resources
Here are the gold standard resources we recommend to help you identify and mitigate nature and climate-related risks, then to tackle your impact:
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© Chris J Ratcliffe / WWFWWF's biodiversity Risk Filter Suite
Check the Risk Filter -
© ScotlandBigPicture.com/ WWF-UKEnvironmental Crimes Financial Toolkit
Download the Toolkit -
© Martin Harvey / WWFSet Science Based Targets
Set your targets -
TNFD methodologies
Nature and decision-making
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