Nature-Based Thesis
Ecosystem Dependence and Climate Risk
Ecosystems are integral to human survival and prosperity, providing essential resources such as fertile soils, forests, and raw materials. However, climate change, biodiversity loss, ecosystem destruction, land degradation, and pollution are threatening these natural systems, jeopardizing global societal stability. After two decades in international nature conservation, it is evident that long-term investment in holistic landscape management and restoration is critical to securing a sustainable future and fostering community livelihoods.
The Necessity of a Holistic Approach
The concept of "holistic" management is pivotal. Addressing only parts of an ecosystem, such as restoring a single tributary without considering the entire river basin, will result in recurring problems and ineffective investments. From a risk management perspective, it is essential to address the entire living system.
Establishing a Global Landscape Restoration Industry
A global industry dedicated to landscape restoration is necessary to protect and restore our planet's ecological infrastructure. The economic rationale for such an industry is increasingly compelling.
Economic Viability of Long-Term Investments
Restoring landscapes is a long-term endeavor, typically spanning at least a generation. Despite the inherent difficulty in quantifying the value of survival, economic analyses consistently show that the financial returns on restoration investments exceed initial costs by a factor of eight to ten across various ecosystems. For instance, in Europe, restoring biodiversity-rich land is projected to cost $167 billion, yet the benefits are valued at over $2 trillion.
Proactive Investment Strategies
Businesses must adopt proactive investment strategies to address the impending climate and biodiversity crises, which are poised to dominate the latter half of the 21st century. Investing in landscape rehabilitation now will mitigate future risks for investors, businesses, and local communities, ultimately yielding significant financial savings. A study by the Food System Economics Commission estimates that transitioning to sustainable food systems could generate over $10 trillion annually.
Social Transformation and Community Impact
Landscape restoration transcends economic benefits, fostering profound social transformations. Supply chains, often viewed in abstract corporate terms, consist of individuals whose livelihoods depend on them, including marginalized smallholder communities, women, and Indigenous peoples. These groups, frequently excluded from corporate decision-making, are crucial stewards of the ecosystems providing essential resources for food and consumer products.
Insetting as a Corporate Responsibility
To ensure long-term viability, companies must invest in nature-positive value streams through insetting, as opposed to traditional offsetting. Insetting involves direct investments in sustainable practices within a company's supply chain, thereby fostering environmental stewardship and securing the raw materials necessary for future production.
Enhancing Value through Ecosystem Restoration
Degraded landscapes render rural communities, often the most vulnerable, susceptible to the intensifying effects of climate change and biodiversity loss. By investing in ecosystem restoration, corporations can provide sustainable incomes for local communities, thereby maintaining the social fabric and ensuring the continued availability of natural resources. This investment also mitigates risks upstream, ensuring long-term business sustainability.
Community-Driven Restoration Projects
Successful landscape restoration requires large-scale, long-term vision and the collaboration of diverse stakeholders, including farmers, citizens, conservationists, government entities, and entrepreneurs. Community governance is vital for the success of such projects. For instance, long-term community involvement has been identified as crucial for forest restoration success.
Case Studies in Community and Business Collaboration
In Western Australia, Commonland collaborated with Wide Open Agriculture (WOA) to scale its regenerative agriculture business. This partnership, involving various community stakeholders, led to the development of plant-based protein products and carbon-neutral oat milk, generating significant revenue. Similarly, in The Netherlands, Commonland supported Wilder Land, a social enterprise producing wildflower tea and other products through biodiversity-enhancing farming practices, benefiting local farmers economically.
Framework for Integrated Restoration Efforts
Commonland's "4 Returns Framework," developed in 2013, unites stakeholders to restore degraded landscapes while fostering regenerative businesses and long-term investment opportunities. This framework redefines traditional return on investment by emphasizing the return on inspiration, aiming to build a shared vision for the land, which ultimately leads to social, ecological, and financial gains.
Global Partnerships and Scaling Restoration Efforts
Forming partnerships at local and global levels is crucial for scaling restoration efforts. Initiatives like the 1000 Landscapes for 1 Billion People demonstrate the importance of collaborative efforts to establish a robust restoration industry.
A Call to Action for Investment Bankers
Investment bankers and corporate leaders must adopt a landscape approach to ensure community welfare, supply chain resilience, long-term business sustainability, and ecological protection. This approach prioritizes people, safeguards ecosystems, and provides employment and skill-sharing opportunities for marginalized groups, fostering pride and stewardship of the land while delivering economic benefits. Investing in landscapes is fundamental to creating a sustainable and resilient restoration industry for the future.
