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1、December 2022Nature in the balance:What companies can do to restore natural capital Serts/Getty ImagesMcKinsey&CompanyDoluptatio volles consequi dolenis nonsequiatio erunt aciunt veliquam harum dolupta essinciur aribus,oditati re ni nusandae.Nequas adisquam,con poratibusci odit volorepudam as aut au
2、dit aut qui di in net optia veres vendis est rerere laborehendi dellaut latem fuga.Erume places dis am faccupt aturectaquas et reroreh endipsapis ea dolorum estio.Re magnime suntentur?Quia si vit quid modis et que sitae nist inis mo eum eum earum utatquam invendi osapide lloriost pres aceperu ptatio
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7、olupis ut et quibus non eum que excepellores molorite volorem aperfer fererro tem.Et laut aliquam et eatectas et quidus repe simint vellaut ea eossimu saest,ut quia aut erem fuga.Nam que eost,sa delesto conet,quam qui dolorib usantum que volorere,qui idendam et modipid magniat enienderibus excero qu
8、am dolendicabo.Ihil mint rem.Ullanihit vel mil im unto maio ipidit la consequidus coriberiam exceaquid utent.Ita eumquae ctasinc iendignam simi,omniet poreperspedi derchicit odi anturib usdae.Et dolupta epeliquis quam nonsequis et andene molupta temporem fugit poremos ea doluptio.Ut quia eiume sam,s
9、um am,vendaec toreces vella int que dis dolorunt doluptat et landerr orest,voluptatem.At velecea ruptaeped et maion pedit est laborem ra acimagn atemod essint omnihic aborehe nitibusciti dit incia iurit,corepedi alias aut pelenis conem reprae nihicia debit erum lacepti quas ut moluptatio dolori de o
10、mnieni mincil il moleni se volest accum re velitem rerem.Em licilig enderibusa secte voluptate excepressunt fugiatum rem fugiam accatur maximpe lentotate volupta tusape peles voluptatur sunt quam volluptatus.Nature in the balance:What companies can do to restore natural capitalAuthorsDaniel Aminetza
11、h,New YorkJulien Claes,BrusselsCaroline De Vit,MontralIvo Erben,DenverDuko Hopman,New JerseyKartik Jayaram,NairobiJoshua Katz,StamfordTomas Nauclr,StockholmHamid Samandari,New YorkTucker Van Aken,New YorkDee Yang,New YorkDecember 2022PrefaceFor much of human history,demands on natural capital were w
12、ell within what the planet could provide.Now,however,population growth and increases in per-capita consumption are depleting the worlds stock of natural capital more quickly than it is being replenished.What can be done to bring human activity within safe boundaries at this juncture,recognizing that
13、 our understanding of these boundaries and our ability to extend them will naturally shift over time?What are the specific opportunities for companies to lead in this undertaking?And how can companies embark on the journey?This report sets out to answer these questions by laying out our current best
14、 understanding of how demands on natural capital are affecting the planet and by identifying the actions that could help address those impacts.In doing so,it marks a first attempt to identify and size the actions corporations could take to catalyze action aimed at bringing demands on natural capital
15、 to within a safe operating space for humanity.The report joins a growing body of McKinsey research focused on the depletion of natural capital as well as the critical intersections between climate and nature.It builds on our previous work,dating back to 2007,to develop global greenhouse-gas(GHG)aba
16、tement cost curves,as well as on previous publications,including Climate risk and response:Physical hazards and socioeconomic impacts(January 2020),The net-zero transition:What it would cost,what it could bring(January 2022),Why investing in nature is key to climate mitigation(January 2021),Valuing
17、nature conservation(September 2020),and“Where the worlds largest companies stand on nature”(September 2022).1 The research was directed by McKinsey senior partners Daniel Aminetzah,Daniel Pacthod,and Hamid Samandari in New York;Kartik Jayaram in Nairobi;Tomas Nauclr in Stockholm;and Jonathan Woetzel
18、 in Shanghai.It was also directed by partners Julien Claes in Brussels,Duko Hopman in New Jersey,Joshua Katz in Stamford,and Dee Yang in New York.The research team was led by Tucker Van Aken and Antoine Stevens and comprised James Allan,Gijs De Cort,Caroline De Vit,Arthur Depicker,Ivo Erben,Hanzel G
19、regorius,Jacob Harrison,Lyna Kim,Tim Lenters,Sbastien Marlier,and Jeroen Verhagen.Many other colleagues within the firm provided valuable input and expertise:Deven Azevedo,Jordan Bar Am,Ryan Barrett,Tom Brennan,Shane Bryan,Adriano Canela,Celia Chaiban,Mark Conrad,Charlie Dixon,Spencer Dowling,Julia
20、Engstrm,Per-Anders Enkvist,Karilyn Farmer,Nelson Ferreira,Patricia Fletcher,Anders Milde Gjendemsj,Will Glazener,Dave Goddard,Ashley Gorst,Thomas Hundertmark,Martin Joerss,Sean Kane,Arjen Kersing,Mekala Krishnan,Floris Leijten,Megan Leitch,Oskar Lingqvist,Jukka Maksimainen,Diana Menzies,Hiren Mulcha
21、ndani,Karl Murray,Jesse Noffsinger,Glen OKelly,Lesley Pandey,Dickon Pinner,Sergio Nistal Prieto,Giulia Reggiani,Sebastian Reiter,Justin Rosenthal,Olivia Sanchez Badini,Jimmy Sarakatsannis,Mohsen Shahi,Erik Sjdin,Robin Smale,Moa Strand,Rory Sullivan,Anders Suneson,Michael Taksyak,Bryan Vadheim,Gregor
22、y Vainberg,Alexander van de Voorde,Otto van der Ende,Jeremy Wallach,Joel Wllgren,Daan Walter,Andr Wise,Bart Woord,and Benedikt Zeumer.1“Why investing in nature is key to climate mitigation,”McKinsey,January 25,2021;“Valuing nature conservation,McKinsey,September 22,2020;“Where the worlds largest com
23、panies stand on nature,”McKinsey,September 13,2022.iiNature in the balance:What companies can do to restore natural capitalThe authors wish to thank the many other organizations and individuals who generously contributed their time and expertise.In particular:at Birdlife International,Stephanie Borr
24、elle,marine and pacific regional coordinator;at Business for Nature,Michael Ofosuhene-Wise,climate and nature manager,and Eva Zabey,executive director;at Conservation International,Dave Hole,vice president,Michael B.Mascia,senior vice president for strategic initiatives and senior scientist,Patrick
25、Roehrdanz,manager of spatial planning for area conservation in response to climate change,and Margot Wood,director,Nature-Positive Science;Davy Vanham,independent researcher,Ispra,Italy;at the Natural History Museum in London,Adriana de Palma,senior researcher,and Andy Purvis,research leader,Diversi
26、ty and Informatics Division;Lena Schulte-Uebbing,PBL Netherlands Environmental Assessment Agency,The Hague;at the Potsdam Institute for Climate Impact Research(PIK),Dieter Gerten,research group leader and coordinator for Earth Modelling,and Johan Rockstrm,director,PIK,and chief scientist of Conserva
27、tion International;at Stockholm Resilience Centre,Stockholm University,Lan Wang-Erlandsson;at the Nature Conservancy,Noor Yafai-Stroband,Europe director global policy and institutional partnerships,and Andras Krolopp,head of biodiversity policy Europe;Tim Newbold,Centre for Biodiversity and Environm
28、ent Research,Department of Genetics,Evolution and Environment,University College London;Sophus zu Ermgassen,Department of Biology,University of Oxford;at the World Business Council for Sustainable Development,Giulia Carbone,director,and Tom Williams,senior director,Nature Action;and Akanksha Khatri,
29、head of nature and biodiversity,World Economic Forum.December 2022iiiNature in the balance:What companies can do to restore natural capitalivNature in the balance:What companies can do to restore natural capitalThe business case for a nature-positive path 19ContentsPreface iiIn brief viExecutive sum
30、mary 1A future within the planets boundaries 27How companies can address impacts on nature 47A road map for corporate action 77Bibliography 106Chapter 1Chapter 2Chapter 3Chapter 4Chapter 5Enabling the nature transition 93vNature in the balance:What companies can do to restore natural capitalIn brief
31、Economic activity fundamentally depends on natural capital,the worlds stock of natural assets.But today,natural capital is being rapidly depleted,with increasingly tangible consequencesfrom water shortages in California to a nitrogen crisis in the Netherlands.In this report,we examine the state of n
32、atural capital,the economic sectors depending on and affecting it,and the opportunities for companies to help reduce those demands.Our key findings include the following:Human activity appears to be outside a safe operating space on at least four of nine planetary boundaries identified by leading Ea
33、rth system scientists.The four are biodiversity loss,chemical and plastic pollution,nutrient pollution,and greenhouse-gas(GHG)emissions.Two other boundariesforest cover loss and freshwater consumptionappear to be in the“zone of uncertainty.”The destabilization of any of these systems could result in
34、 irreversible and adverse environmental changes that would affect societies across the globe.Agriculture is the largest contributor to the depletion of natural capital,followed by retail sales and services and the power sector.Crop agriculture accounts for 72 percent of freshwater consumption,61 per
35、cent of nitrogen runoff pollution(a component of nutrient pollution),and 32 percent of terrestrial biodiversity loss,according to the midpoint of our estimates.Livestock agriculture is the largest contributor to biodiversity loss,at 53 percent,and to phosphorus pollution(another component of nutrien
36、t pollution),at 51 percent.It is also the second-largest contributor to nitrogen runoff and deposition.Agricultures preponderant role stems from its direct land footprint and its position upstream of other sectors.Farmers are already profitably pursuing several on-farm opportunities to address these
37、 challenges,such as regenerative and precision agriculture.Corporate action could play a key role in setting the globe on the path to recovery by 2050.Our estimate of 47 potential levers,each of which could be implemented today using existing commercial technologies,suggests that corporate action co
38、uld fully return the world to within the planetary boundaries for freshwater consumption,nutrient pollution,and forest cover loss.Companies could also address almost half of the projected gap to the biodiversity loss boundary through 2050 and 60 percent of chemical and plastic pollution.Nature conse
39、rvation,consumer dietary shifts,and other“whole of society”levers,while not sized,could also mitigate depletion of natural capital.Corporate action on nature has meaningful overlap with climate action.Nine of the 47 levers identified have significant abatement potential for both carbon and other pla
40、netary boundaries.Together,these nine levers could provide 15 gigatons of CO2-equivalent(GtCO2e)abatement per year,or about 40 percent of annual emissions in 2020.They comprise eight agricultural levers,including regenerative and precision agriculture,and solar and wind power.Our estimates suggest t
41、hese levers could address 64 percent of projected freshwater consumption,44 percent of projected nutrient pollution,and 5 percent of projected biodiversity loss.viNature in the balance:What companies can do to restore natural capitalTwelve corporate actions with an estimated net-positive ROI of arou
42、nd$700 billion could potentially deliver about 45 percent of the abatement potential we identify.The 12 actions include regenerative-agriculture techniques,food waste reduction,and new delivery models that reduce plastic production(for instance,returnable and reusable container programs).Taken toget
43、herand if fully implementedthese 12 levers could achieve an annual benefit of around$700 billion,net of costs.Four other levers are low cost but have potentially high impact,delivering 8 percent of the identified mitigation potential at a net cost of around$15 billion per year,according to our estim
44、ates.These four are precision agriculture for cropland,regenerative agriculture in pastures,the recycling of construction plastic,and mechanical recycling.An additional 20 levers,representing 47 percent of the abatement potential,are ROI negative with todays technologies and no pricing of externalit
45、ies or avoided risks.We estimate that these levers could be achieved at a net cost of up to$1.5 trillion per year.As markets and technologies mature,the ROI of those actions could increase.The efforts that companies have made on climate action and the lessons they have learned could serve as a start
46、ing point for action on nature.As with climate,the first step is to measure and understand a companys current footprint,and the second is to identify actions each company can take,with an initial focus on those that have positive returns and are easier to implement.Many actions that benefit nature w
47、ould simultaneously yield positive returns for companies.Corporate action,while a crucial catalyst,will not be sufficient on its own.Public institutions,civil society,academia,and citizens at large all have a role to play,and government leadership needs to coordinate and encourage broad action.Criti
48、cal enablers include setting clear standards and guardrails for corporate efforts;providing nature-related infrastructure,including data and skills;and creating new approaches to financing and financial accounting.viiNature in the balance:What companies can do to restore natural capital Ismael Juan
49、Salcedo/EyeEm/Getty ImagesviiiNature in the balance:What companies can do to restore natural capitalThis report is part of a growing body of McKinsey research focusing on the depletion of natural capital and its potential consequences.2 It marks a first attempt to identify and size the actions corpo
50、rations could take to act as catalysts to return the planet to a“safe operating space for humanity.”The issue is a critical one:natural capital is in decline across multiple dimensions(Exhibit E1).By one estimate,current demands require resources at least 1.8 times greater than what the Earth appear
51、s to be able to sustain at this point.3 Yet fatalism would be misplaced:one of our key findings is that while a range of economic sectors contribute to this depletion of natural capital,specific actions by companies using current technologiesand supported by broader enabling actions by the whole of
52、societycould not only reverse the trend but also generate positive return on investment in a substantial number of cases.The issues of climate and nature are closely intertwined.Addressing the natural-capital challenge is crucial to mitigating climate change,while addressing climate change could hel
53、p avert or delay several emerging nature-related tipping points.4 Nature itself provides proven technologies that are available now,cost little,and can remove carbon from the atmosphere and increase resilience to the effects of climate change.5 Altogether,investing in opportunities to protect,manage
54、,and restore natureas well as enabling technologies and services such as measurement and verificationcan address climate and be attractive today.Time is not unlimited,however.The economic impacts of climate change and intensive natural-capital use are becoming clearer.6 In California,water shortages
55、 threaten the Central Valley,which accounts for 25 percent of US food production.7 In Europe,environmental damage stemming from nitrogen pollution has spurred governments to try to reduce the scale and intensity of agriculture.8 In the Amazon,deforestation has reduced rainfall and is harming agricul
56、tural productivity.9 Worldwide,less than 65 percent of fishery stocks are biologically sustainable,compared to 90 percent in 1974,and some fisheries have collapsed.10 Should these trends continue,economic activity could be curtailed,in some cases quite severely,depending on the location and conditio
57、ns.And this could in turn have broader implications,potentially including aggravated supply chain disruptions,population displacements,and conflicts.While business leaders face many immediate challenges,a failure to address 2 McKinsey research on natural capital includes the reports Valuing nature c
58、onservation(September 2020),Why investing in nature is key to climate mitigation(January 2021),and Blue carbon:The potential of coastal and oceanic climate action(May 13,2022).It also includes articles such as“Reduced dividends on natural capital?”(June 29,2020)and“Where the worlds largest companies
59、 stand on nature”(September 13,2022),as well as targeted research on nature risk,fashion,fisheries,forestry,water,and more.McKinseys research is supported by sustainability practitioners,Material Economics,McKinsey Nature Analytics,the McKinsey Global Institute,and Vivid Economics.3 As measured by b
60、iocapacity,or“the capacity of ecosystems to regenerate what people demand from them.”See How many Earths?How many countries?,Earth Overshoot Day,accessed November 9,2022.4 Timothy M.Lenton et al.,“Climate tipping points too risky to bet against,”Nature,November 2019,Volume 575;Johan Rockstrm et al.,
61、“A safe operating space for humanity,”Nature,September 2009,Volume 461;Will Steffen et al.,“Planetary boundaries:guiding human development on a changing planet,”Science,January 2015,Volume 347,Number 6223.5“Why investing in nature is key to climate mitigation,”McKinsey,January 2021.6“Climate risk an
62、d response:Physical hazards and socioeconomic impacts,”McKinsey Global Institute,January 16,2020.7 Mu Xiao et al.,“How much groundwater did Californias Central Valley lose during the 20122016 drought?,”Geophysical Research Letters,April 2017,Volume 44,Number 10;Alan M.Rhoades et al.,“The changing ch
63、aracter of the California Sierra Nevada as a natural reservoir,”Geophysical Research Letters,November 2018,Volume 45,Number 23;Californias Central Valley,United States Geological Survey,accessed November 9,2022.8 See Box 3,“How the Netherlands is seeking to tackle its nitrogen crisis,”in chapter 1.9
64、 Deborah Lawrence and Karen Vandecar,“Effects of tropical deforestation on climate and agriculture,”Nature Climate Change,January 2015,Volume5,Number 174.10 The state of world fisheries and aquaculture 2022:Towards blue transformation,Food and Agriculture Organization,2022;Malin L.Pinsky et al.,“Une
65、xpected patterns of fisheries collapse in the worlds oceans,”Proceedings of the National Academy of Sciences,May 2011,Volume 108,Number 20.Executive summary 1Nature in the balance:What companies can do to restore natural capitalthe challenge of natural capital could exacerbate macroeconomic instabil
66、ity,public-health crises,and geopolitical risk,among other considerations.What could be done to move the economy back within what nature can afford?What are the specific opportunities for corporations to lead in this transition?And how could companies benefit?This reportusing the best available curr
67、ent sciencesets out to answer these questions.First,we lay out our current best understanding about how demands on natural capital are affecting the planet,and then we identify the actions that could help address those impacts(see Box E1,“Our approach and its limitations”).Companies have many compel
68、ling reasons beyond good stewardship of the planet in general to act now to replenish natural capital,as we outline in chapter 1.First,many of the potential actions we identify provide a positive ROI;altogether,our midpoint estimate is that there is an annual opportunity of about$700 billion for bus
69、inesses to reduce operating costs while benefiting the natural environment.Second,transitioning to a nature-positive future can create new business opportunities because new technologies,services,and processes will be needed.Third,as nature degradation spurs stronger calls for action,investors and p
70、olicy makers may push companies to actfor instance,through new investing criteria or regulations.Finally,failing to take meaningful action on nature could entail operational,transition,reputational,and market risks for companies.11 11 Samantha McCraine et al.,The nature of risk:A framework for under
71、standing nature-related risk to business,World Wildlife Fund,2019.Exhibit E1decline in forested areas20%of topsoil degraded33%of wetlands lost85%of coral reef system destroyed50%1.00.10.900.30.80.70.50.40.22005197020100.620000519750.31decrease in relative abundance of monitored
72、 wildlife populations69%Other indicators of natures declineLiving Planet Index,19702018The Living Planet Index(LPI)“is a measure of the state of the worlds biological diversity based on population trends of vertebrate species from terrestrial,freshwater,and marine habitats.”Globally,monitored popula
73、tions of birds,mammals,fsh,reptiles,and amphibians have declined in abundance by 69 percent,on average,between 1970 and 2018.In other words,the average change in population size in the LPI is a decline of 69 percent.This does not mean that 69 percent of the species or populations are declining nor t
74、hat 69 percent of populations or individual animals have been lost.Source:See bibliographyNature is in rapid decline across dimensions.McKinsey&Company2Nature in the balance:What companies can do to restore natural capitalBox E1 Our approach and its limitations In this report,we propose an analytica
75、l framework for private-and public-sector decision makers to evaluate the impact of human activity on nature and to take action to bring the economys use of natural capital within a safe operating space for humanity.Our approach builds on decades of work by scientists,policy makers,and businesses,as
76、 well as by organizations such as the Stockholm Resilience Centre,Science Based Targets Network(SBTN),and the Taskforce on Nature-related Financial Disclosures(TNFD).We also build on our experience in helping companies address climate change,which intersects and has significant synergies with nature
77、-related efforts.1 Through our analysis,we seek to accomplish the following:establish a holistic framework for thinking about natural capital,based on the notion of a“safe operating space for humanity,”or planetary boundaries size sectoral contributions to the current and future state of natural cap
78、ital across five planetary boundaries for five boundaries,identify a set of discrete levers that companies could implement,and estimate the associated costs and benefits define an approach for corporate actors to move forward on near-term,no-regret actions,and plan for additional future actions outl
79、ine the additional actions that would be needed from international institutions,policy makers,1 For more,see“Greenhouse gas abatement cost curves,”McKinsey,accessed November 8,2022.2 In general,this report excludes levers that have obvious negative second-order impacts or where there is a clear lack
80、 of scientific alignment(for example,clearing forest undergrowth to abate forest fires).Nevertheless,implementing any levers at a local or company level will require case-by-case analysis and engagement with local stakeholders to better understand local impacts.3 The planetary-boundaries framework h
81、ighlights that both“top down”(global)and“bottom up”(local)impacts must be addressed to maintain a safe operating space for humanity.See Johan Rockstrm et al.,“A safe operating space for humanity,”Nature,September 2009,Volume 461.and consumers in addition to corporate actionThis analysis represents a
82、 partial view of what it will take for the economy to transition to a nature-positive footing;by“nature positive,”we mean any activity or action that could contribute to reducing negative impacts or generate positive impacts on nature.The sized levers are globally relevant actions that nonfinancial
83、corporate leaders can implement directly,using available technologies,without reducing overall output.For clarity,we report our estimates as global averages or midpoint values where we have estimated high and low values.We did not size actions that would have to be driven by policy actors(for exampl
84、e,subsidy reform),financial actors(for example,green financing),and consumers(for example,global demand reduction),although such actions can help support and enable corporate action.As such,this report focuses on how companies could lead the way and highlights how much additional action would be req
85、uired from other stakeholders.There is much this report does not cover.For instance,there are insufficient data for two of the nine planetary boundaries to allow meaningful analysis.Our analysis does not include systematic consideration of second-order effects,upstream and downstream relationships b
86、etween sectors,or issues of social impact and environmental justice,though these are critical.2 Nor do we consider impacts not captured in the metrics used in the planetary-boundaries framework,which focuses on global systems.Actions that have a meaningful local impact but generate limited contribut
87、ions to planetary boundaries(for example,water pollution,chemical spills,nuclear waste,or sulfur emissions)would nonetheless be crucial.3 An important challenge is the current state of planetary science.While there is a broad scientific consensus about the existence of planetary boundaries and the m
88、omentum toward breaching them,scientists continue to debate which planetary systems are most critical and the exact thresholds beyond which the world would risk triggering potentially irreversible tipping points.This report relies on a range of assumptions to project where the planet could stand aga
89、inst the planetary boundaries in 2050,to attribute impacts to specific sectors,and to identify,size,and price actions that could bring us back within those boundaries.More-refined analyses will doubtless be possible in the future as the underlying science advances,as better data are gathered,and as
90、methodologies mature.But the humility that the current state of knowledge and analysis imposes should not obscure the urgency to initiate or accelerate efforts on the path to a nature-positive economy.Full details of our methodology can be found in the relevant chapters and the technical appendix.Fo
91、r details on exhibit sources,see the bibliography.3Nature in the balance:What companies can do to restore natural capitalHuman activity seems to have pushed the planet outside a safe operating space for humanity on four planetary boundariesTo frame our research,we use the latest scientific research
92、on planetary boundaries.Introduced in 2009 and updated in 2015,these boundaries provide a framework for tracking the planets ability to support human development.The framework defines a“safe operating space for humanity”with respect to the systems and processes that govern the stability of the Earth
93、s atmosphere,oceans,and ecosystems.12 While climate change and some of its cascading impacts are now more familiar,the planetary-boundaries framework outlines eight additional Earth systems that,if destabilized beyond a defined level,could trigger a tipping point and lead to irreversible environment
94、al changes,according to what we know today.13 For this research,we focused on five of the seven planetary boundaries for which reliable data are available.We exclude ozone depletion,which is on a path to recovery thanks to the success of international efforts under the Montreal Protocols,14 and cond
95、uct limited analysis on climate change,which has been covered extensively in other research.Our findings highlight the current challenge:the impact of human activity is already extending beyond the safe space for at least four boundaries:biodiversity loss,chemical and plastic pollution,nutrient poll
96、ution,and greenhouse-gas emissions(Exhibit E2).15 For the two other boundariesforest cover loss16 and freshwater consumptionthe current impact of human activity is deemed to be in the“zone of uncertainty.”17 Terrestrial biodiversity loss stands out,at an estimated 2.7 times beyond the planetary boun
97、dary as currently understood and 1.4 times beyond 1970 levels.This raises an alarm not only because of its direct impact on humanity but also because of the feedback loops between biodiversity and the other boundaries.For example,ecosystem degradation can alter precipitation patterns and river flow
98、at subglobal scales and reduce ecosystem capacity for retaining nitrogen and phosphorus,thus increasing nutrient pollution.18 Another standout is the chemical and plastic pollution boundary.We estimate that the world economy currently emits 2.6 times more plastic into water sources each year than in
99、 2010negatively affecting species,ecosystems,and food webs and reducing the ability of oceans to sequester carbon.19 12 Ibid.13 Nico Wunderling et al.,“Interacting tipping elements increase risk of climate domino effects under global warming,”Earth System Dynamics,June 2021,Volume 12.14 Kelsey Piper
100、,“The shrinking ozone hole shows that the world can actually solve an environmental crisis,”Vox,October 27,2022.15 Outside of the“safe space”is defined as being outside of the identified“zone of uncertainty”(for biodiversity and climate change)or beyond the planetary boundary where there is no defin
101、ed“zone of uncertainty.”This reports use of control variables and planetary-boundary thresholds are explained in detail in Box 1 in chapter 2.16 This report uses a data set from the Food and Agriculture Organization(FAO),focusing on deforestation since 2000,and defines deforestation as a persistent
102、conversion of forest to any other land use.This differs from other databases,such as Global Forest Watch(GFW),which classifies any sort of forest degradation as deforestation.Natural forest conversion to plantation forests is not considered forest cover loss in the planetary boundaries framework bec
103、ause plantation forests still enable landclimate interactions.17 The creators of the planetary boundaries include both a strict,inner threshold(the“boundary”)informed by the precautionary principles and a looser,outer threshold,which corresponds to being outside the“zone of uncertainty.”The risks ar
104、e characterized as tipping points that could cause sudden,significant,and irreversible shifts in life-supporting Earth systems.Beyond the“boundary,”risks of triggering a tipping point begin to increase,while beyond the“zone of uncertainty,”those risks increase further.18 Georgina M.Mace et al.,“Appr
105、oaches to defining a planetary boundary for biodiversity,”Global Environmental Change,September 2014,Volume 28.19 This report follows recent scientific literature to focus on plastic-waste emissions to aquatic environments as the control variable of interest for“the introduction of novel entities”bo
106、undary,which this report refers to as“chemical and plastic pollution”or simply“plastic pollution.”Although there is no“official”boundary for plastic-waste emissions to aquatic environments,following the suggestion of leading plastic-waste emissions scientists and research by the United Nations Envir
107、onment Programme,this report uses 2010 plastic-waste emissions to aquatic environments as a reference boundary,which equates to eight metric megatons(Mt)per year.See Linn Persson et al.,“Outside the safe operating space of the planetary boundary for novel entities,”Environmental Science&Technology,J
108、anuary 2022,Volume 56,Number 3;Stephanie B.Borrelle et al.,“Predicted growth in plastic waste exceeds efforts to mitigate plastic pollution,”Science,September 2020,Volume 369,Number 6510;Sarah E.Cornell,Joan Fabres,and Patricia Villarrubia-Gmez,“Marine plastic pollution as a planetary boundary threa
109、t The drifting piece in the sustainability puzzle,”Marine Policy,October 2018,Volume 96;and United Nations Environmental Assembly,2019.4Nature in the balance:What companies can do to restore natural capitalExhibit E2BoundaryControl variableBiodiversity lossBiodiversity intactness index(BII)Forest co
110、ver lossForested land as a percent of potential forest coverFreshwater consumptionBlue-water consumptionChemical and plastic pollutionPlastic-waste emissions to aquatic environmentsNutrient pollutionNitrogen runof,nitrogen deposi-tion,and phosphorous pollution Climate changeContribution of GHG emiss
111、ions to warming Aerosol pollutionNot analyzedlack of reliable dataOcean acidifcationNot analyzedlack of reliable dataOzone depletionNot analyzedon path to recoveryPlanetary boundary1Current state2030 projection2050 projectionNote:Refer to technical appendix section 2 for a detailed analytical approa
112、ch for each boundary.This chart only reports the planetary boundary and does not include the looser,outer“zone of uncertainty.”Beyond the strict boundary there is a nonzero risk of triggering a“tipping point”(systems collapse).BII is an estimated percentage of the preindustrial(pre-1750)number of sp
113、ecies that remain and their abundance in any given area,given the prevalence of human impact in that area.BII does not extend to marine environments.This report uses a data set from the Food and Agriculture Organization(FAO),focusing on deforestation since 2000,and defnes deforestation as a persiste
114、nt conversion of forest to any other land use.This difers from other databases,such as Global Forest Watch,which classifes any sort of forest degradation as deforestation.Natural forest conversion to plantation forests is not considered forest cover loss in the planetary-boundaries framework because
115、 plantation forests still enable landclimate interactions.Nutrient pollution includes three separate control variables:terrestrial nitrogen deposition,nitrogen surface water runof,and phosphorus pollution.The exhibit shows the current state and projections for phosphorous pollution,which is the furt
116、hest beyond the boundary of the three.This reports analysis follows the planetary-boundaries literature to use“radiative forcing,”which measures excess Earth system energy and,when positive,causes warming.Radiative forcing is driven in large part by GHG emissions.Greenhouse gas.Source:See bibliograp
117、hyCurrent and projected status against planetary boundaries,multiples beyond planetary boundaryHuman activity seems to have pushed the planet two times beyond the safe operating space on at least four boundaries.McKinsey&CompanyNot analyzed Further outside boundary54321Biodiversity lossForest cover
118、lossFreshwater consumptionChemical and plastic pollutionNutrient pollutionClimate changeAerosol pollutionOcean acidifcationOzone depletion5Nature in the balance:What companies can do to restore natural capitalAgriculture is the largest contributor to exceeding planetary boundaries,as currently under
119、stood As part of our analysis of planetary boundaries,we estimate the contributions of economic sectors to the current position against each boundary.This analysis only looked at direct impacts,rather than indirect ones manifesting themselves throughout an industrys entire value chain,even though th
120、ose impacts are also critical.One sector in particularagriculturehas the largest single direct impact,based on this analysis(Exhibit E3).The retail sales and services sectorwhich includes retail,accommodation and food services,IT,finance,insurance,professional and support services,education,health,a
121、nd entertainmentis also a major contributor to some of the boundaries,according to this analysis,notably chemical and plastic pollution.Exhibit E3BoundaryControl variablePercentage contributionBiodiversity lossForest cover loss3Freshwater consumptionChemical and plastic pollutionNutrient pollution4P
122、hosphorous pollutionForested land as a percent of potential forest coverPlastic-waste emissions to aquatic environmentsBiodiversity intactness index(BII)2Blue-water consumptionNitrogen deposition(terrestrial)Nitrogen runof(aquatic)ForestryCrop agricultureConstruction and buildingsOther6ExtractivesLi
123、vestock agricultureWater and wasteManufacturingTransportationRetail sales and services5PowerSectoral contributions toward each planetary boundary,%on relative scaleNote:Analysis focuses on fve of the nine planetary boundaries.For two planetary boundaries(ocean acidifcation and atmospheric aerosol lo
124、ading),an absence of reliable data prevented analysis,while the analysis excludes ozone depletion since it is on a path to recovery.Greenhouse-gas emissions are excluded because they are well covered in other reports.Refer to technical appendix section 2 for a detailed analytical approach for each b
125、oundary.Sectoral contributions are calculated based on direct operations and do not account for upstream or downstream impacts(for example,construction contrib-utes to biodiversity loss primarily through the purchase of materials,not directly).The biodiversity intactness index(BII)is an estimated pe
126、rcentage of the preindustrial(pre-1750)number of species that remain and their abundance in any given area,given the prevalence of human impact in that area.BII does not extend to marine environments.This report uses a data set from the Food and Agriculture Organization(FAO),focusing on deforestatio
127、n since 2000,and defnes deforestation as a persistent conversion of forest to any other land use.This difers from other databases,such as Global Forest Watch,which classifes any sort of forest degradation as deforestation.Natural forest conversion to plantation forests is not considered forest cover
128、 loss in the planetary-boundaries framework because plantation forests still enable landclimate interactions.Report assumes no forestry-induced forest cover loss because that sector converts primary forest to secondary and plantation forest,which still conserves total forest cover.Nitrogen runof:glo
129、bal nitrogen runof contributing to surface water eutrophication risk;nitrogen deposition:global nitrogen deposition contributing to terres-trial ecosystem eutrophication and acidifcation risk;phosphorus pollution:global phosphorus pollution contributing to surface water eutrophication risk.This repo
130、rts calculation for phosphorus pollution attributed to livestock agriculture includes both runof and leaching from pastureland and excess manure waste.Includes retail,accommodation and food services,IT,fnance and insurance,professional and support services,education,health,and entertainment.This cat
131、egory includes biodiversity and forest loss attributed to grassland,peatland,bare land,and shrubland on primary forest which is not directly attribut-able to sectoral activities,as well as a very small contribution from urban land use.Source:See bibliographyAgriculture is the largest contributor to
132、exceeding planetary boundaries,as currently understood,followed by retail sales and services.McKinsey&Company6Nature in the balance:What companies can do to restore natural capitalFood systems have the most significant impact on the environment:they are the largest contributing sector in five of the
133、 nine planetary-boundary control variables we assessed.Our midpoint estimates suggest that crop agriculture accounts for 72 percent of freshwater consumption,61 percent of nitrogen runoff pollution,and 32 percent of terrestrial biodiversity loss.We estimate that livestock agriculture is the largest
134、contributor to biodiversity loss(53 percent)and phosphorus pollution(51 percent)20 and is the second-largest contributor for nitrogen runoff and deposition.The disproportionate estimated impact of agriculture stems from its direct land footprint(50 percent of total habitable land,far more than any o
135、ther use21)and from the strong influence of downstream sectors such as the food-processing industry.Therefore,many actions that would address the impact of agriculture on natural capital would require sustained behavioral and operational changes from downstream actors.Examples include individual hou
136、seholds(for instance,changes in diet and total fuel consumption)and buyers of agricultural products(for instance,reducing waste in food processing,groceries,and restaurants or purchasing sustainably cultivated fibers for textile manufacturing).22 Retail sales and services account for 77 percent of c
137、hemical and plastic pollution(as measured by plastic-waste emissions to aquatic environments),according to our midpoint estimates.Previous McKinsey research has identified the power sector and industry(including manufacturing and extractives)as the largest contributors to the GHG emissions that driv
138、e climate change.23Corporate action could help set the planet on a path to recovery by 2050Our research suggests that companies have the potential to shift the worlds trajectory on natural capital and usher in a return to a safe operating space for humanity by 2050.It also suggests that they could d
139、o so through a set of targeted actions that use existing technologies and that in many cases could provide positive returns on investment.Our research assesses the holistic effect of 47 potential corporate actions,24 or levers(detailed below),across five planetary boundaries:biodiversity loss,forest
140、 cover loss,freshwater consumption,chemical and plastic pollution,and nutrient pollution.25 Our analysis includes only levers that do not have a significant negative impact on other planetary boundaries.For example,a recent McKinsey report highlights that in many applications,plastics have a lower t
141、otal GHG contribution than currently available alternatives and help reduce food waste from spoilage.26 Because of these potential trade-offs,we largely exclude levers related to replacing plastics with alternative materials.20 This reports calculation for phosphorus pollution attributed to livestoc
142、k agriculture includes both runoff and leaching from pastureland and excess manure waste that is lost to the environment(that is,manure that is left over once manure has been processed or used for other agricultural applications).See Sanna Ltjnen,Markku Ollikainen,and Esa Temmes,“Dairy farm manageme
143、nt when nutrient runoff and climate emissions count,”American Journal of Agriculture Economics,May 2020,Volume 102,Number 3;and Fei Lun et al.,“Global and regional phosphorus budgets in agricultural systems and their implications for phosphorus-use efficiency,”Earth System Science Data,2018,Volume 1
144、0.21 Hannah Ritchie and Max Roser,“Land use,”Our World in Data,September 2019.22 True cost of food:Measuring what matters to transform the U.S.food system,Rockefeller Foundation,July 2021.23“The net-zero transition:What it would cost,what it could bring,”McKinsey,January 2022.24 This report used a b
145、ottom-up process to identify almost 900 lever ideas from various sources,including peer-reviewed articles,external industry experts,internal knowledge experts,and corporate and industry reports.We also drew on our experience serving a wide range of companies.25 See“Climate math:What a 1.5-degree pat
146、hway would take,”McKinsey Quarterly,April 2020;“The net-zero transition,”January 2022;and Agriculture and climate change,McKinsey,April 2020.26“Climate impact of plastics,”McKinsey,July 2022.7Nature in the balance:What companies can do to restore natural capitalOverall,the midpoint results of our an
147、alysis suggest that corporate action could potentially return the world to safety in three of the planetary boundaries:forest cover loss,freshwater consumption,and nutrient pollution.The sized levers could also address 48 percent of the projected overage of the boundary for biodiversity(getting clos
148、e to a pre-1970 level)and 60 percent of the identified boundary for chemical and plastic pollution.Exhibit E4 highlights the abatement potential identified across all boundaries examined.Exhibit E4030004860371Mitigation potential,%of projected 2050 overage of planetary boundaryManufacturi
149、ngLivestock agricultureExtractivesRetail sales and services5ConstructionPowerWater and wasteTransportationForestryCrop agricultureBiodiversity in 19701Safe operating spacePlanetary boundaryBiodiversity lossBiodiversity intactness index(BII)2Forest cover loss3Forested land as a percent of potential f
150、orest coverFreshwater consumptionBlue-water consumptionChemical and plastic pollutionPlastic-waste emissions to aquatic environmentsNutrient pollutionNitrogen runof,nitrogen deposition,and phosphorous pollution4All sectors,by sectorNote:Analysis focuses on fve of the nine planetary boundaries.For tw
151、o planetary boundaries(ocean acidifcation and atmospheric aerosol loading),an absence of reliable data prevented analysis,while the analysis excludes ozone depletion since it is on a path to recovery.Greenhouse-gas emissions are covered in other reports and not recreated here.See“The net-zero transi
152、tion:What it would cost,what it could bring,”McKinsey,January 2022;“Climate math:What a 1.5-de-gree pathway would take,”McKinsey Quarterly,April 2020;and Agriculture and climate change,McKinsey,April 2020.Refer to technical appendix section 3 for a detailed analytical approach for each boundary and
153、sector.In the literature,the biodiversity intactness index(BII)zone of uncertainty ranges from 10 to 70 percent loss.However,this is subject to a great deal of debate and uncertainty,so the report uses the 1970-level of BII loss to contextualize a potential zone of uncertainty.BII is an estimated pe
154、rcentage of the preindustrial(pre-1750)number of species from remain and their abundance in any given area,given the prevalence of human impact in that area.BII does not extend to marine environments.This report uses a data set from the Food and Agriculture Organization(FAO),focusing on deforestatio
155、n since 2000,and defnes deforestation as a persistent conversion of forest to any other land use.This difers from other databases,such as Global Forest Watch,which classifes any sort of forest degradation as deforestation.Natural forest conversion to plantation forests is not considered forest cover
156、 loss in the planetary-boundaries framework because plantation forests still enable landclimate interactions.Report assumes no forestry-induced forest cover loss because that sector converts primary forest to secondary and plantation forest,which still conserves total forest cover.Nutrient pollution
157、 includes three separate control variables:terrestrial nitrogen deposition,nitrogen surface water runof,and phosphorus pollution,all weight-ed equally.This reports calculation for phosphorus pollution attributed to livestock agriculture includes both runof and leaching from pastureland and excess ma
158、nure waste.Includes retail,accommodation and food services,IT,fnance and insurance,professional and support services,education,health,and entertainment.Source:See bibliographyAgriculture and retail sales and services seem to have the most abatement potential,though all sectors have a role to play.Mc
159、Kinsey&Company8Nature in the balance:What companies can do to restore natural capitalOur analysis demonstrates that corporate action,using technologies and approaches available today,could make a meaningful contribution to addressing the challenge of the planetary boundaries.But corporate action alo
160、ne is not sufficient(Exhibit E4).“Whole of society”levers such as nature conservation could help close the remaining gaps,as could technologies not yet widely available and thus not included in our analysis,such as novel enzymes that can break down plastic and technologies to extend the shelf life o
161、f foods.Of course,demonstrating a potential for abatement does not ensure its realization.Any given lever represents a fundamental change in the way companies operateand,by extension,in the way people consume their products and services.The abatement potential we present assumes that each opportunit
162、y is pursued systematically and completely,where feasible,across the world;that there is collaboration and coordination between upstream and downstream partners(for instance,between farmers and the buyers of agricultural products);and that policy makers and other stakeholders create enabling conditi
163、ons.Almost half of the estimated abatement potential could provide a positive return on investment Based on our midpoint estimates(and subject to the limitations outlined in Box E1,“Our approach and its limitations”),12 levers would have a net-positive ROI in 2022 dollars.If fully implemented,these
164、12 levers could deliver around 45 percent of the total identified mitigation potential,amounting to an annual benefit of about$700 billion,net of costs.27 These levers include switching to regenerative agriculture,reducing food waste,and implementing new delivery models(for instance,returnable and r
165、eusable container programs)to reduce plastic production and pollution.Four leversprecision agriculture for cropland,regenerative agriculture in pastures,the recycling of construction plastic,and mechanical recyclingare defined as low cost.28 Estimates suggest that together,they could deliver 8 perce
166、nt of the identified mitigation potential at a net cost of around$15 billion per year.Twenty levers29 are estimated to be ROI negative in 2022 dollars.If fully implemented,they could deliver around 55 percent of the identified mitigation potential at an annual cost,net of savings,of about$1.5 trilli
167、on.30 Of these 20 levers,13 are defined as moderate cost and could together deliver 32 percent of the identified mitigation potential at a net cost of around$1.1 trillion per year.These include agroforestry,biological pest control,drip irrigation,water-efficient manufacturing techniques,and biodegra
168、dable plastic for packaging.27 This report defines ROI in net terms for each lever,meaning that the reported figures include estimates of both costs and savings.Hence,ROI-positive levers are defined as levers where the estimated capital and operational savings exceed capital and operational costs on
169、 an annual basis.The net costs and savings are calculated in todays dollars(2022)based on three components:(1)incremental capital expenditures required to implement the lever,calculated by dividing total incremental capital expenditure by the lifetime of the capital;(2)incremental operating expendit
170、ures required to implement the lever;and(3)incremental operating savings resulting from implementing the lever.We report midpoint estimates based on maximum feasible adoption of each lever.28 The cutoff between moderate and high cost is defined for each boundary.Biodiversity loss:$500 per hectare(ha
171、),one-third the average agriculture operational cost in the United States;freshwater consumption:90 cents per cubic meter,the average municipal price of water in the United States;chemical and plastic pollution:$22 per kilogram(kg)of plastic pollution,the average cost of plastic production that resu
172、lts in one kg of plastic pollution to aquatic environments;nutrient pollution:$1 per kg of nitrogen runoff,the average cost of nitrogen fertilizer production.The cutoff between low and moderate cost is defined as 10 percent of the medium to high cutoff.29 We exclude 11 other higher-cost levers in th
173、e topline ROI numbers,such as the use of nitrogen inhibitors in cropland and desalination,because these could provide mitigation above what is needed to address the freshwater and nutrient boundaries(and do not address other boundaries).They may have local applications.30 These figures represent a l
174、ower bound to the overall cost of bringing the world within planetary boundaries,given that the sized levers do not completely address biodiversity loss and plastic pollution.They also do not include the other,unsized boundaries.9Nature in the balance:What companies can do to restore natural capital
175、The seven remaining levers of the 20 are defined as high cost and could together deliver 15 percent of the identified mitigation potential at a net cost of around$370 billion per year.These include the use of manure management,mine reclamation,and wastewater treatment.These rough ROI estimates are b
176、ound to change over time.New technologies can reduce costs,and new policies and new investor expectations could encourage greater accounting of nature impacts.Conversely,costs may be higher,or returns lower,due to localized challenges in implementing levers or slow adoption.One limitation of our ana
177、lysis is that the underlying models do not account for the cost of negative externalities or include an assessment of nature risk.31 If included,such measures could make levers that are currently ROI negative more attractive.Corporate action on nature would have meaningful overlap with climate actio
178、nAction to address loss of natural capital overlaps with decarbonization activities that companies are already contemplating or pursuing.The costs above exclude the total cost of action on climate,which is covered in more depth in other McKinsey research,32 but there are synergies.For our research,w
179、e include carbon abatement levers only if they provide abatement potential across noncarbon planetary boundaries13 of 47 levers meet this criteria.Nine of the 13,including regenerative and precision agriculture,drip irrigation,and switching to solar and wind power generation,are included above and t
180、ogether could address 64 percent of the projected gap to the freshwater boundary,44 percent of the gap for nutrient pollution,and 5 percent of the gap for biodiversity loss.33 Estimates suggest these nine levers could also abate 15 GtCO2e of emissions per year,or about 40 percent of annual emissions
181、 in 2020.34 We exclude four of the 13 levers from top-line numbers because they are more expensive and exceed the requirements to address the five planetary boundaries analyzed.While we did not size CO2 potential for the 34 other levers,many of them could also have a net climate benefit.All sectors
182、could meaningfully contribute to abating loss of natural capitalOf all sectors,agriculture seems to have the greatest opportunity to address projected overages or gaps in the biodiversity,freshwater,and nutrient planetary boundaries by 2050.Agriculture levers account for 72 percent of the total iden
183、tified improvement in biodiversity loss,addressing 35 percent of the global overage in 2050,according to the midpoint estimate of our analysis.Agriculture could also bring the world entirely within the planetary boundary for forest cover loss,address 82 percent of the gap to the freshwater consumpti
184、on boundary,and meet 94 percent of the gap for nutrient pollution in 2050.Exhibit E5 depicts the cost curve for biodiversity,highlighting the most cost-effective levers as understood today.The gap to the planetary boundary highlights the challenge of returning to the safe operating space for humanit
185、y by 2050.31 Financial markets typically do not value nature or externalities that negatively affect nature unless they are associated with a defined asset value or cash flow.Economic models also typically undervalue or fail to value nature due to several interconnected market failures:the benefits
186、of natural capital are often public goods that are nonexcludable and non-rivalrous,the costs and benefits of nature are external to actors who conserve or destroy nature,and discount rates underestimate the value of long-term ecosystem stability compared with economic returns from short-term natural
187、 asset consumption.The immense complexity of interdependent and dynamic natural systems also poses a challenge.For a deeper discussion of these issues,see Andrew Deutz et al.,Financing Nature:Closing the global biodiversity financing gap,Paulson Institute,Nature Conservancy,and Cornell Atkinson Cent
188、er for Sustainability,2020;Partha Dasgupta,The economics of biodiversity:The Dasgupta review,London:HM Treasury,February 2021.32“The net-zero transition,”January 2022;“Climate math,”April 2020;Agriculture and climate change,April 2020.33 See Agriculture and climate change,April 2022 and“The net-zero
189、 transition,”January 2022.34 15 GtCO2e divided by 38 Gt emitted in 2020.10Nature in the balance:What companies can do to restore natural capitalExhibit E5400400609020030200300805050010040300Unit cost,$per hectareMitigation potential,%of projected 2050 overageof planetary boundaryManufactu
190、ringForestryExtractivesConstructionLivestock agricultureRetail sales and services1Crop agriculturePlanetary boundaryBiodiversity in 19702Food waste reductionFood loss reductionPlant-based alternativesAgroforestry(crops)Regenerative agriculture(pastures)Advanced seed technologyRegenerative agricultur
191、e(crops)Sustainable forestryBiological pest controlSafe operating spaceZone of uncertainty Agroforestry(pastures)Mine reclamation210,900Urban greenifcation1,000Urban expansion site optimization1,000Corporate levers to mitigate biodiversity loss,volumes represent lever mitigation potentialNote:Refer
192、to technical appendix section 3 for detailed analytical approach for each boundary and sector.Includes retail,accommodation and food services,IT,fnance and insurance,professional and support services,education,health,and entertainment.Biodiversity loss is calculated using the the biodiversity intact
193、ness index(BII),which is an estimated percentage of the preindustrial(pre-1750)number of species that remain and their abundance in any given area,given the prevalence of human impact in that area.BII does not extend to marine environments.In the literature,the BII zone of uncertainty ranges from 10
194、 to 70 percent loss.However,this is subject to a great deal of debate and uncertainty,so the report uses the 1970-level of BII loss to contextualize a potential zone of uncertainty.Source:See bibliographyThe biodiversity cost curve highlights the most cost-efective levers we identifed and the challe
195、nge in closing the gap to the planetary boundary.McKinsey&Company11Nature in the balance:What companies can do to restore natural capitalMidpoint estimates suggest that eight levers,if fully implemented,could have the largest effect in addressing the agriculture sectors impacts on nature.Four of the
196、se levers require collaboration across the supply chain,but the agricultural sector could implement four directly:Regenerative agriculture,which includes planting cover crops and using no-till farming,could address three out of five planetary boundaries by minimizing soil disturbance,limiting consum
197、ptive water losses,and enhancing habitats.At scale,it could mitigate 8 percent of the projected 2050 gap to the biodiversity boundary,5 percent of the gap to the freshwater consumption boundary,and 16 percent of the gap to the nutrient pollution boundary.We estimate that regenerative agriculture,if
198、fully implemented,could reduce farm operational and input costs and would therefore be ROI positive,potentially providing$65 billion in value annually.Agroforestry,which includes planting trees in cropland and pastureland and implementing buffer strips of natural vegetation cover,is the largest leve
199、r for biodiversity,according to our estimates.Like regenerative agriculture,it could help improve the biodiversity potential of working lands.We assume that it would be implemented in a way that does not affect output(meaning that greater implementation is possible,although at a cost of lost product
200、ivity).Combined,agroforestry in cropland and pastureland could reduce 11 percent of the projected 2050 gap to the biodiversity boundary across cropland and pastureland for a cost of approximately$180 per hectare.We estimate that full mitigation would cost$300 billion globally each year.Water-efficie
201、nt agriculture techniques,including alternate-furrow irrigation,optimized-drip irrigation,and water-efficient seeds,could reduce freshwater consumption to address 19 percent of the projected 2050 global overage.We estimate that water-efficient agriculture could provide$40 billion in net value global
202、ly each year from reduced water consumption when fully implemented.Manure management techniques,including anaerobic digesters on large farms and manure sequestration on smaller farms,could be a large part of the solution for nutrient pollution,potentially addressing 39 percent of the projected nitro
203、gen surface runoff overage and 32 percent of the projected phosphorus pollution overage.Both techniques would involve increased costs,such as investing in necessary infrastructure and operational costs.We estimate the net annual global cost to be$45 billion.Four additional levers could affect the ag
204、riculture baseline but would require close partnership between the agriculture sector and downstream sectors.Our estimates suggest that plant-based alternatives for meat and dairy;advanced seed technology,including genetically modified seeds;and reduction of food loss and food waste through supply o
205、ptimization could help pull the economy back toward the boundaries.35 The impact could play out in reducing the amount of land converted to agriculture or in enabling rewilding of current agriculture land.Taken together,these levers could address 23 percent of the gap to the biodiversity planetary b
206、oundary,100 percent of the gap to the forest cover loss boundary,45 percent of the gap for freshwater consumption,and 55 percent of the gap for nutrient pollutionwhile simultaneously generating net savings for companies.Advanced seed technology and food waste reduction would be ROI positive,with an
207、estimated net annual savings opportunity of$320 billion.Corporate-driven adoption of plant-based alternatives(which would require pricing at a loss to achieve parity with animal-based products and to drive adoption)is currently estimated to be ROI negative and could cost$370 billion annually.36 35 M
208、oira Borens,Sebastian Gatzer,Clarisse Magnin,and Bjrn Timelin,“Reducing food loss:What grocery retailers and manufacturers can do,”McKinsey,September 7,2022.36 Wider adoption of plant-based alternatives would require broader policy incentives and is outside the scope of the corporate abatement poten
209、tial identified.12Nature in the balance:What companies can do to restore natural capitalNonagricultural actors can also implement levers to address their direct footprints.The following four actions have significant potential for abatement:Switching to solar and wind power could reduce freshwater co
210、nsumption by 12 percent of the gap to the planetary boundary and nutrient pollution by 4 percent.Our estimate suggests that implementing low-cost power generation switching could provide net value of$95 billion annually through lower operating costs.37 Addressing plastic wasteby reducing the amount
211、of plastic in packaging,implementing new delivery models(for instance,returnable and reusable container programs),expanding mechanical and chemical recycling of plastics,and using compostable bioplasticscould help the retail sales and services sector address 52 percent of the plastic pollution overa
212、ge.Plastic reduction and alternative delivery models would be ROI positive,providing an estimated$35 billion annually in value by reducing the amount of plastic needed.The remaining levers are ROI negative,costing$40 billion annually from increased capital and operational costs.While the levers abov
213、e could reduce plastic-waste emissions to aquatic environments in the long run,improved plastic-waste management will be critical in the short term because plastic production is expected to remain high.Sustainable-forestry measuresincluding variable thinning instead of clear-cutting,the creation of
214、buffers,subsoiling,and multispecies forestry techniquescould help the forestry sector address 5 percent of the overage on biodiversity.These measures could result in an estimated net cost of$300 billion annually because of reduced profitability from variable thinning and buffers and the operational
215、costs of implementing subsoiling.Mine reclamation,specifically in regions where it is not currently required,is unlikely to be able to address more than 0.1 percent of the projected 2050 overage of biodiversity loss.But it would be important at a local level and for other measures not quantified in
216、this analysis,including water pollution,chemical pollution,and heavy-metal contamination,all of which have biodiversity impacts not captured in measures of minings direct footprint.38 Expanded mine reclamation efforts could cost up to$60 billion annually.Four actions could guide corporate efforts on
217、 nature There has been an increasing focus on how to define corporate road maps to climate action,but the playbook for corporate engagement on nature is still in early development.Some companies are starting to acknowledge dimensions of nature such as biodiversity loss,but very few have set quantifi
218、ed targets,and those commitments vary(Exhibit E6).39Companies that have set targets include French beauty-care firm LOral,which has developed more than 15 targets for 2030 for“managing water,respecting biodiversity,and preserving natural resources”based on the planetary boundaries framework,40 and r
219、sted,a Danish power company that has set targets for circular resource use and has committed to a net-positive impact on biodiversity for all of its projects starting in 2030.41 In the United States,retailer Walmart has committed to protect,restore,or improve the management of 37 Cost is based on es
220、timates from McKinseys Global Energy Perspective and was updated in May 2022.Estimates are forward looking,accounting for future returns over the lifetime and using future forecasts for electricity and gas prices.Actual returns may vary due to the complex and volatile global environment and local va
221、riation.Companies may experience higher prices today because of exceptionally high demand and elevated gas prices,among other factors.38 The direct land footprint of mining is relatively small on a planetary basis,although indirect impacts can be larger.The planetary boundaries framework may,therefo
222、re,underestimate the impact of mining.For instance,mining has been shown to increase deforestation up to 70 kilometers beyond mining lease boundaries,causing 12 times more deforestation than within the lease alone.See Laura J.Sonter,“Mining drives extensive deforestation in the Brazilian Amazon,”Nat
223、ure Communications,October 2017,Volume 8.39“Where the worlds largest companies stand on nature,”McKinsey,September 13,2022.40 LOral for the Future:Our sustainability commitments for 2030,LOral,June 2020.41 Green energy for the planet and its people,rsted,2021.13Nature in the balance:What companies c
224、an do to restore natural capitalat least 50 million acres of land and one million square miles of ocean by 2030,among other detailed and metrics-based nature goals.42 Given all the demands facing companies in a challenging macroeconomic environment,it can be hard to know where to start.Four steps co
225、uld help companies find their way:First,companies can assess their nature footprintthat is,the types,magnitude,and materiality of their impacts and dependencies on nature.43 Before defining a nature strategy,companies would need transparency to ensure they can mitigate risks,address impacts on natur
226、al capital,and identify business opportunities.Companies can select metrics that broadly address impacts across their footprints from among numerous indicators already available.Second,companies can identify which of their own activities have the potential to both reduce impacts on nature and improv
227、e company performance.For each potential company-specific lever,companies can determine the abatement potential,how long it would take to have impact,sources of financing,and possible returns,among other factors.The“mitigation hierarchy”an international framework from the World Banks International F
228、inance 42 Sustainability,Walmart,2022.43 For a methodology that can help companies“identify which environmental issues to set targets on,for which parts of the business,”see Technical guidance for Step 1:Assess and Step 2:Prioritize,Science Based Targets Network,September 2022.Exhibit E6832520951549
229、496044791Biodiversity lossNutrient pollutionChemical and plastic pollutionForest cover lossFreshwater consumptionClimate changeAcknowledgment and target setAcknowledgment without targetNo acknowledgment or targetFortune Global 500 companies nature-related targets and acknowledgments,%shar
230、eNote:Analysis focuses on six of the nine planetary boundaries.For two planetary boundaries(ocean acidifcation and atmospheric aerosol loading),an absence of reliable data prevented analysis,while the analysis excludes ozone depletion since it is on a path to recovery.Figures may not sum to 100%,bec
231、ause of rounding.Includes 460 of the Fortune Global 500 companies.A target is defned as a company having set a quantifed,time-bound,and outcome-oriented target across the entire organization.A commitment to spend a certain dollar amount without a target outcome or time period did not count as a targ
232、et.An acknowledgment means that a company refers to that dimension of nature and either acknowledges its importance or reports ad hoc steps or initiatives it has taken to mitigate impacts,without specifying a concrete goal.Source:See bibliographyCorporate targets are common for climate change but fa
233、r less common for other dimensions of nature.McKinsey&Company14Nature in the balance:What companies can do to restore natural capitalCorporationcould provide guidance on the priority order of actions to take.44 A range of ROI-positive activities could improve operational efficiency and reduce depend
234、encies.Companies may choose to tackle these ROI-positive levers first but would likely want to keep sight of the abatement potential of each lever and what it would take to address the companys overall nature footprint.Third,companies could set initial targets for nature and levels of commitment,def
235、ine a set of actions,and integrate them into a broader portfolio of initiatives.Companies may look to organizations such as the Science Based Targets Network(SBTN)for guidance on how to set time-bound,science-based,and quantitative targets in line with the planetary boundaries.45 Companies can also
236、choose to make their nature commitments public,which provides an opportunity to build an identity around nature commitments.Nimbleness and flexibility are the name of the game,particularly in todays evolving environment,so company approaches may evolve over time.Fourth,companies can closely monitor
237、progress against their goals and may prepare to disclose that progress as it unfolds.Various organizations are working to develop standardized voluntary reporting metrics,and the Taskforce on Nature-related Financial Disclosures(TNFD)has developed detailed guidance across four pillars of disclosure:
238、governance,strategy,risk management,and metrics and targets.46 For companies that have made public commitments,disclosure is an opportunity to provide a progress update and help inspire broader action on nature.These actions would all require an iterative test-learn-refine approach.As companies moni
239、tor progress and learn,they can refine their approach and test new levers.They can also integrate new technologies and the latest scientific thinking and respond to changes in market conditions,regulatory and consumer expectations,and more.Corporate action on nature would need to be accompanied by e
240、nabling actions from other stakeholders Companies can do much to support the return to a safe operating space for humanity,but they cannot do it on their own.Other stakeholders in both the public and social sectors would have a critical role to play in tackling issues including evolving regulatory a
241、nd policy guidance,a lack of standardized metrics or definitions of nature,widely distributed and nonstandard nature-related data,a lack of funding and financial incentives,limited options for investing in natures recovery,and a shortage of needed“green”skills.Three broad sets of enabling actions ar
242、e required to overcome these and other barriers:1.Providing a framework for corporate nature efforts.Standard nature reporting requirements would be needed to increase transparency,help companies identify which metrics are most critical,and make company disclosures consistent and comparable.Addition
243、ally,while companies could set ambitious targets on their own,governments can help encourage broader corporate action by setting clear guidance for nature actions and the outcomes to target.44 The mitigation hierarchy provides guidance on the priority order for companies to take in identifying and i
244、mplementing actions to reduce their impact on nature.As outlined in the International Finance Corporations Performance Standard 6,it includes,in order of priority,avoiding negative impacts,reducing negative impacts,restoring nature when negative impacts are unavoidable,and offsetting impact by resto
245、ring and protecting habitats that are off site from the project.Since nature is not perfectly fungible,many organizations exclude offsetting from the mitigation hierarchy.See International Finance Corporations guidance note 6:Biodiversity conservation and sustainable management of living natural res
246、ources,IFC,January 1,2012;Samuel Sinclair et al.,The conservation hierarchy underpinning the post-2020 biodiversity framework,Convention on Biological Diversity,2020.45 Science-based targets for nature:Initial guidance for business,Science Based Targets Network,September 2020.46 The TNFD nature-rela
247、ted risk and opportunity management and disclosure framework,Taskforce on Nature-related Financial Disclosures,June 2022.15Nature in the balance:What companies can do to restore natural capital2.Developing and investing in the infrastructuredata,skills,and opportunitiesthat would help inform company
248、 actions.Although data on nature are often publicly accessible,they are frequently spread across sources and can be difficult to aggregate and use.Improving data availability and supply chain traceability are key enabling measures,along with more training to develop a workforce with the broad set of
249、“green skills”necessary to interpret and use nature-related data to inform decision making.Corporations would also need more options for investing in natural-capital preservation,which scientifically rigorous and well-regulated credit markets(including carbon credits,nature credits,and biodiversity
250、credits)can help provide.While such infrastructure could be an opportunity for new businesses(such as data brokerages),the public and social sectors could play a key supporting role by helping aggregate open-source data,providing job training,and fostering credit initiatives.47 3.Expanding financing
251、 and incentives.Financing a nature-positive path would likely require more resources than todays approaches to nature finance can muster.Mitigating the impact of operations on nature could increase resilience and would provide a better long-term investment.48 However,given that 55 percent of the ide
252、ntified abatement potential does not generate a near-term return on investment under current assumptions,new financing,incentives,and ways of thinking would be needed to address the funding gap.For example,governments could consider reassessing subsidies or use internal accounting to price nature ex
253、ternalities and guide decision making.49 Financial stakeholders could also implement policies and create new financial products that would help direct funding flows toward nature-oriented outcomes.50In the current economic environment,companies face a multitude of challenges,including talent retenti
254、on,macroeconomic pressures,geopolitical instability,and supply chain problems.But taking action on nature would not add to existing burdens.It could bring tangible benefits for both natural capital and company revenue.Companies could start the journey by understanding their footprint and implementin
255、g ROI-positive actions that address both climate and nature capital.Over time,companies could adopt increasingly ambitious targets for nature and start to build new businesses around the technologies and approaches that can help return the economy to a safe operating space for humanity.Building a na
256、ture-positive economy is not the responsibility of corporate actors alone.It will require multiple actors to invest in science to better understand the problem and its potential solutions,collaborate to define standards and the right level of ambition as knowledge accumulates,and overcome a range of
257、 technical and financial barriers.It will be a journeybut it will lead to a destination of much greater prosperity and an economy operating within safe limits.47 The future of nature and business,World Economic Forum,2020.48“Does ESG really matter?,”McKinsey Quarterly,August 10,2022.49 Jessica Fan,W
258、erner Rehm,and Giulia Siccardo,“The state of internal carbon pricing,”McKinsey,February 10,2021.50“Does ESG really matter?,”August 10,2022.16Nature in the balance:What companies can do to restore natural capitalThe issues of climate and nature are closely intertwined.Addressing the natural-capital c
259、hallenge is crucial to mitigating climate change,while addressing climate change could help avert or delay several emerging nature-related tipping points.17Nature in the balance:What companies can do to restore natural capital RichVintage/Getty Images18Nature in the balance:What companies can do to
260、restore natural capitalThe business case for a nature-positive path1The nature crisis is generating growing attention from central banks,the financial sector,51 and prominent global organizations such as the World Economic Forum,the Paulson Institute,the World Bank,Business for Nature,and the World
261、Business Council for Sustainable Development.52 This attention is spurring an increasing number of businesses to make pledges related to biodiversity or becoming“nature positive”(see Box 1,“What we mean by nature positive”).53 Meanwhile,the Taskforce on Nature-related Financial Disclosures(TNFD)is e
262、stablishing a framework for how businesses report and act on nature-related risks and opportunities,while the Science Based Targets Network(SBTN)is developing methods to help companies set science-based targets for nature.54Such calls and actions amount to a recognition that the impact of economic a
263、ctivity on natural capitalan“externality,”in economic termshas reached such a level that it can no longer be ignored.A failure to take meaningful action on nature could potentially have operational,transition,reputational,and market risks for companies.55 Localized depletion of natural capital may a
264、lready be a threat to corporations business models and supply chains.56Companies could act now to seize the business opportunities and minimize risks created by the depletion of natural capital.First,many of the levers or corporate actions we have identified are ROI positive,according to our estimat
265、es.These include crop fertilizer reduction,water system leak management,food waste reduction,and alternative delivery models for packaging,among many others.As outlined in chapter 3,we estimate that,on average,nature-positive action could also benefit companies,providing a combined value opportunity
266、 of nearly$700 billion annually through reduced operating costs.Second,transitioning to a nature-positive future could create new business opportunities because new technologies,services,and processes will be needed.Third,as nature degradation spurs stronger calls for action,investors and policy mak
267、ers may push companies to actfor instance,through new investing criteria or regulations.Acting now could better position companies to benefit from these changes.51“Nature positive”language was included during the most recent G-7 and G-20 meetings,at COP26,and by the Network for Greening the Financia
268、l System(NGFS)representing 114 central banks and financial supervisors.52 The global risks report 2022,17th edition,World Economic Forum,2022;see also Global assessment report on biodiversity and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Servic
269、es,IPBES,2019.Andrew Deutz et al.,Financing nature:Closing the global biodiversity financing gap,Paulson Institute,Nature Conservancy,and Cornell Atkinson Center for Sustainability,2020;The economic case for nature:A global Earth-economy model to assess development policy pathways,World Bank,2021.As
270、 of November 2022,more than 1,100 companies have signed on to Business for Natures“Nature is everyones business”call to action.See Business for Natures call to action,Business for Nature,accessed November 11,2022.53“Where the worlds largest companies stand on nature,”McKinsey,September 13,2022.54“Na
271、ture risk is the next challenge that demands a global solution,”McKinsey,May 20,2022;“For sustainable business,planetary boundaries define the new rules,”Global Commons Alliance,November 18,2020.55 Samantha McCraine et al.,The nature of risk:A framework for understanding nature-related risk to busin
272、ess,World Wildlife Fund,2019.56 For example,CDP reports that suppliers expect$1.26 trillion in revenue losses in the next five years due to climate change,deforestation,and water insecurity.Transparency to transformation:A chain reaction(global supply chain report 2020),CDP,February 2021.See also“Ri
273、sk,resilience,and rebalancing in global value chains,”McKinsey Global Institute,August 6,2020.19Nature in the balance:What companies can do to restore natural capital KDP/Getty ImagesBox 1 What we mean by nature positive The term“nature positive”has become increasingly prevalent in the business and
274、political communities,1 reflecting a broad desire on the part of leaders to address the nature crisis and capture their intent in a simple phrase.2 There is no consensus on what nature positive means for businesses.3 By one definition,nature positive is“a high-level goal and concept describing a fut
275、ure state of nature(e.g.,biodiversity,ecosystem services and natural capital)which is greater 1“Where the worlds largest companies stand on nature,”McKinsey,September 13,2022;“Nature risk is the next challenge that demands a global solution,”McKinsey,May 20,2022.2 Sophus O.S.E.zu Ermgassen et al.,“A
276、re corporate biodiversity commitments consistent with delivering nature-positive outcomes?A review of nature-positive definitions,company progress and challenges,”SocArXiv,July 2022.3 EJ Milner-Gulland,“Dont dilute the term Nature Positive,”Nature Ecology&Evolution,2022;Martine Maron et al,“Setting
277、robust biodiversity goals,”Conservation Letters,May 2021.4 Glossary of Key Terms,Taskforce on Nature-related Financial Disclosures;Develop and implement a transformational and effective post-2020 global biodiversity framework,International Union for Conservation of Nature,2020;“Nature-positive”an op
278、portunity to get it right,Science Based Targets Network,July 11,2021;FAQs,Get Nature Positive,accessed November 11,2022.5 Harvey Locke et al.,A nature-positive world:The global goal for nature,2021.6 Oliver Balch,Michael Ofosuhene-Wise,and Eva Zabey,How business and finance can contribute to a natur
279、e positive future now,Business for Nature,October 2022.7 The TNFD nature-related risk and opportunity management and disclosure framework,June 2022.than the current state,”4 reflecting an intent to align stakeholders around a goal of generating“net gains in nature”by 2030.5 Absent specific and stand
280、ardized metrics,it will be difficult to measure whether a business aligns with this definition.6In this report,we use the term“nature positive”to mean any activity or action that could reduce negative impacts or generate positive impacts on nature.However,the pursuit of one or even many such activit
281、ies does not necessarily qualify a company as nature positive.Similar to the approach of the Taskforce on Nature-related Financial Disclosures beta framework,this report does not attempt to define“nature positive”at the company level.Instead,it looks to the many organizations working to define the t
282、erm to inform its findings,including the Global Biodiversity Framework of the Convention on Biological Diversity(CBD).720Nature in the balance:What companies can do to restore natural capitalNew businesses and technologies are needed to drive the transition to a nature-positive future While the tran
283、sition to a nature-positive global economy would entail significant costas well as structural changes in everything from how we produce and consume goods to where we liveit could also generate opportunities for new growth,products,and services for the companies that choose to act with the appropriat
284、e mix of foresight and strategic nimbleness.First is the opportunity to provide the solutions underpinning the corporate actions,or levers,identified in chapter 3.For instance,sustainable agricultural equipment,part of the agricultural decarbonization lever,could present a market opportunity of up t
285、o$50 billion by 2030.57 As another example,the market for alternative protein could reach well over$100 billion by 2030 and many multiples of that by 2050.58 Second,companies can capitalize on the opportunity to improve the technologies identified in these same levers.For instance,while plant-based
286、proteins are already included in the cost curves,further or faster advances in animal meat replacements could create cost savings and scale for lab-grown protein and fats,as well as alternative protein fermentation,alternative animal feed using single-cell protein production from manure,insect-based
287、 feed,and fish-meal alternatives.59 As another example,chemical conversion to reduce plastic waste currently has a high cost to implement,partly because of the extremely high temperatures required.However,research has identified new catalysts that could speed the conversion and decrease the temperat
288、ure required,which could reduce the cost.60Third,companies can provide the new technologies needed to address the depletion of natural capital.The levers discussed in this report are based on technologies that are commercialized(or nearly commercialized)today and therefore do not address the full se
289、t of technologies that could be available during the next decades.Research attention and early-stage funding have already identified many of these opportunities,and others could emerge in coming years and decades.Several emerging technologies show promise,including the following:1.Forestry and agrof
290、orestry.A large range of relevant technologies could help bring down the cost of growing,planting,and monitoring the health of trees.61 These range from advanced planting using drones to remote sensing and machine-learning technologies used for monitoring forest health.62 Tree genetics and climate s
291、mart forestry practices could help increase carbon uptake of forests.63 These technologies could reduce costs,create alternative revenue streams(for example,through carbon sequestration),and further address biodiversity loss.2.Food waste technologies.Reducing food waste could release the pressure on
292、 land use and help nonagricultural companies reduce their upstream impacts.These include shelf-life extension(for example,biodegradable films and hydrogels)and sensors and 57 McKinsey analysis.58 Vivid Economics Alternative Proteins Model,November 2022.59 Tomas Laboutka,“Make room for alternative pr
293、oteins:What it takes to build a new sector,”McKinsey,March 25,2022;Hermione Dace and Karen Hooper,The protein problem:How scaling alternative proteins can help people and planet,Tony Blair Institute for Global Change,November 17,2021;Simon Creasey,“The fermentation flurry in plant-based food,”Just F
294、ood Magazine,February 2021;Sirada Patthawaro and Chewapat Saejung,“Production of single cell protein from manure as animal feed by using photosynthetic bacteria,”Microbiology Open,December 2019,Volume 8;Kristin Elliott,“Alternative aquaculture feeds,”Aquasend,June 5,2019.60 Chuhua Jia,“Converting pl
295、astic waste into fuel,”Harvard Science in the News,June 30,2021.61 Dan Guida,“How automation is transforming greenhouses and nurseries,”NIP Group,March 31,2020.62“Touch the sky to plant trees yes,there are companies using drones to plant trees,”Change Started,July 25,2020;Narayan Kayet,“Forest healt
296、h monitoring using hyperspectral remote sensing techniques,”Spatial Modeling in Forest Resources Management,October 9,2020.63 Yumin Tao et al.,“Enhanced photosynthetic efficiency for increased carbon assimilation and woody biomass production in hybrid poplar INRA 717-1B4,”BioRxiv,March 9,2022.21Natu
297、re in the balance:What companies can do to restore natural capitalmonitors in the supply chain.64 The global market for smart packaging,including foods,pharmaceuticals,and other products,could reach$26.7 billion by 2024.653.Plastic waste.Novel enzymes could reduce plastic pollution by degrading plas
298、tics in a matter of days.66 While this would not address the more pressing collection problem,it has the potential to help address the quantity in landfills.Beyond traditional mechanical recycling,chemical recycling technology including chemolysis,hygrothermal recycling,and gasification could provid
299、e new opportunities for plastic reuse.67 Finally,there is an opportunity to help provide the cross-cutting enabling technologies and services that would be needed to support corporate action.For example,supply chain transparency is critical for companies to measure and monitor their footprint.The Wo
300、rld Economic Forum estimates that there is a$515 billion opportunity in transitioning to more transparent supply chains,with opportunities ranging from QR codes and IoT-sensor devices to blockchain applications.68 New reporting requirements could also create market opportunities for tracking and tra
301、cing technologies and monitoring services.As an indication of the size of the nature reporting opportunity,the carbon footprint management market could reach a value of more than$18 billion by 2031.69 Early action is an opportunity to get ahead of stakeholder action and regulatory change As the effe
302、cts of natures degradation become increasingly visible,investors,consumers,and policy makers may push companies to address their impacts on nature.Action now would help companies get ahead of such changes and build an identity around nature-positive actions.Investor actionThe risk of negative reperc
303、ussions for a failure to act on nature is growing.For instance,111 financial institutions managing more than 16.3 trillion in assets have committed to set targets on their impacts on nature,which will influence the projects they choose to finance.70 In February 2022,BlackRock said it“may withhold su
304、pport for management proposals”if it is“concerned that natural capital-related risks and opportunities are not being effectively managed,overseen,or disclosed.”71 And Norways sovereign wealth fund sold its stake in more than 60 companies due to deforestation concerns.72 As McKinsey research on ESG h
305、as highlighted,companies that do not address such concerns may not endure in the long run.73 To the extent that investor expectations grow in this arena,new opportunities could also begin to emerge.Financial institutions increasingly offer preferential access to capital for 64 Grant Gerke,“Rethinkin
306、g barrier films,food waste and the circular economy,”Flexible Packaging,October 12,2021;Emma Shipman et al.,“Can gene editing reduce postharvest waste and loss of fruit,vegetables,and ornamentals?,”Horticulture Research,January 1,2021,Volume 8.65 Wai Cheung and Dirk Schaefer,“Smart packaging:Opportu
307、nities and challenges,”Procedia CIRP,June 27,2018,Volume 72.66 Hongyuan Lu et al.,“Machine learning-aided engineering of hydrolases for PET depolymerization,”Nature,April 27,2022,Volume 604.67 Chemolysis is the use of water or a chemical agent such as methanol or glycol to break down plastic materia
308、l into monomers.Hydrothermal recycling uses water at an elevated pressure and temperature to cut long-chain hydrocarbon bonds into plastics to produce oils and chemicals.Gasification is a high-temperature,high-pressure environment where oxygen or steam is in contact with the feed material to produce
309、 synthesis gas that can be converted into monomers.See“Rethinking plastics in a circular economy,”Economist Impact,2021.68 The future of nature and business,World Economic Forum,2020.69 Carbon footprint management market by component(solution and services),by deployment mode(on premise,cloud),by ind
310、ustry vertical(energy and utilities,manufacturing,residential and commercial buildings,and transportation and logistics,IT and telecom):Global opportunity analysis and industry forecast,2021-2031,Allied Market Research,May 2022.70 Finance for Biodiversity Pledge website,accessed October 30,2022.71 O
311、ur approach to engagement on natural capital,BlackRock,February 2022.72 Michael Taylor,“Norways wealth fund ditches 33 palm oil firms over deforestation,”Reuters,February 28,2019.73“Does ESG really matter?,”August 10,2022.22Nature in the balance:What companies can do to restore natural capitalgreen
312、actors,reducing the overall cost of capital.74 For example,Louis Dreyfus Company B.V.renewed its$750 million revolving credit facility to include a sustainability-linked interest rate measured against environmental outcomes.75 Consumer demand Businesses that adopt and maintain nature-conscious pract
313、ices,especially first movers that act with conviction,could accrue a green premiumor“greenium”for their offerings.Surveys show that 67 percent of global consumers say that environmental health and the impact of their choices on the planet are important to them.76 Between 12 and 25 percent of custome
314、rs say they would be willing to pay more for certain sustainability labels,such as“all natural,”“eco-friendly,”or“sustainably produced,”although those claims must be backed up by real action.77 Other indicators suggest that nature action will be increasingly important.For example,generational shifts
315、 in attitude may also make corporate environmental claims more important over time.78 There are also indications that nature-conscious companies perform better on employee retention.79 Policy changeMultiple nature-related policies are coming online and could influence business operations and profita
316、bility.Companies that can get ahead of new regulations and policies may have the opportunity to build a durable competitive advantage,as has happened with previous environmental regulations.80 The longer companies wait,the more difficult and costly it would be to make the transition and the more lik
317、ely that new regulation may be abruptly imposed.At a global level,governments aim to agree to a new set of goals for nature at the 2022 UN Biodiversity Conference.Among the targets to be outlined,Target 15 is most relevant to businesses andin the current draftincludes the expectation that businesses
318、 would assess and report on their dependencies and impacts on biodiversity,measurably reduce negative impacts by 2030,and increase positive impacts.81 It will most likely take some time for agreements made at the biodiversity conference to translate to national and regional policies and regulations
319、for corporations,and a number of governments may choose not to enact them,particularly given current macroeconomic conditions.Nevertheless,national and jurisdictional-level policies are already in place or in preparation:In France,article 29 of a 2019 energy-climate law requires that companies discl
320、ose biodiversity risks and adverse impacts,as well as their strategy for reducing biodiversity risks.82 The United Kingdoms new policy paper,“Greening finance:A roadmap to sustainable investing,”requires disclosure of both climate risk and other environmental impacts.83 74 Research by ING has found
321、that issuers of green bonds save,on average,between one and ten basis points,while research by the Climate Bonds Initiative has found green bonds are typically oversubscribed compared with their vanilla counterparts.See Padhraic Garvey and Benjamin Schroeder,“The corporate premium in green finance,”
322、ING,June 9,2021;Caroline Harrison,Green bond pricing in the primary market H1 2021,Climate Bonds Initiative,September 2021.75 The key metrics were CO2 remissions,electricity consumption,water usage,and solid waste sent to landfills.See“Louis Dreyfus Company announces its first sustainability-linked
323、revolving credit facility,”Louis Dreyfus Company,May 28,2019.76“How health-conscious consumers want to live in a healthy world,”NielsenIQ,October 2021.77 Jurgita Biceika and Maria Coronado Robles,“Sustainable food:Will consumers pay a premium?,”Euromonitor International,April 21,2022.78“Meet Generat
324、ion Z:Shaping the future of shopping,”McKinsey Podcast,August 4,2020.79 Oliver Balch,Michael Ofosuhene-Wise,and Eva Zabey,How business and finance can contribute to a nature positive future now,Business for Nature,October 2022.80 Stefan Ambec et al.,“The Porter Hypothesis at 20,”Resources for the Fu
325、ture,2011;Pierre Mohnen and George van Leeuwen,“Revisiting the Porter hypothesis:an empirical analysis of Green innovation for the Netherlands,”Economics of Innovation and New Technology,2017,Volume 26.81 First draft of the post-2020 global biodiversity framework,United Nations Environment Programme
326、,July 5,2021.82“Frances law on energy and climate adds coverage of biodiversity,ecosystems,and renewable energy to investors non-financial reporting,”Green Finance Platform,2021.83 Greening finance:A roadmap to sustainable investing,HM Treasury,October 2021.23Nature in the balance:What companies can
327、 do to restore natural capital In the United States,a new rule proposed by the SEC would require companies to increase their reporting on climate risk,while in the European Union,the Corporate Sustainability Reporting Directive(CSRD)is already in effect.84 While disclosure itself may impose some cos
328、ts on companies,the real impact could happen if standard disclosures lead to a valuation differential for lower performers,as has been seen for companies with exposure to climate risk.85 In the European Union,the European Commission introduced a draft Nature Restoration Law in June 2022.If it become
329、s law,it will require EU member states to revitalize forests,wetlands,and other landscapes harmed by human activity.86 The European Union may also require all future bilateral trade agreements to be biodiversity positive.87 Both actions may require companies to adjust their spatial footprints.Beyond
330、 Europe,Costa Rica has been particularly successful in embedding biodiversity considerations in a wide range of policies.88 These regulations may inspire action in other countries,paving the way for more specific and stringent nature-related policies and regulations around the world.Still,many devel
331、oping countries may need additional incentives,including additional financing and support,before committing to increase their commitments on nature.89 84 Laura Corb,Kimberly Henderson,Tim Koller,and Shally Venugopal,“Understanding the SECs proposed climate risk disclosure rule,”Inside the Strategy R
332、oom,McKinsey,June 3,2022;Corporate sustainability reporting,European Commission,2022.85“Understanding the SECs proposed climate risk disclosure rule,”June 3,2022.86 Nature restoration law,European Commission,June 22,2022.87 Methodology for assessing the impacts of trade agreements on biodiversity an
333、d ecosystems,European Commission,March 2021.88 Brian J.Huntley,“Good news from the South:Biodiversity mainstreaming a paradigm shift in conservation?,”South African Journal of Science,September 2014,Volume 110,Number 9/10.89 This divide can be seen in policy and behavior.For instance,Brazil,Indonesia,and South Africa,all of which are rich in biodiversity,are not members of the High Ambition Coalit