Following the adoption of the Global Biodiversity Framework1 in December 2022, momentum is building to halt and reverse biodiversity loss. The passage of regulations such as the European Union Deforestation Regulation (EUDR) and the establishment of reporting frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) are creating pathways for businesses to manage and disclose their nature risks. Concurrently, these actions can create business value, strengthen brand equity, and build organizational resilience.
During Climate Week, McKinsey’s Sustainability Practice convened over 100 corporate leaders to discuss how companies can better capture business value from their nature strategies—exploring how to prioritize nature-positive opportunities in the private sector and what unlocks are needed to spearhead bolder actions across the supply chain. The following key themes emerged from the discussions:
- Treat nature as your number one supplier. Most of the global economy is dependent on nature—treating nature as a priority supplier can reframe how companies interact with their supply chains. Understanding a company’s impact and dependencies on nature can help manage risk, capture opportunities, and build organizational resilience. For example, the chief sustainability officer (CSO) of a large consumer packaged goods company shared how the number one supplier for toilet paper is nature and trees.
- Secure C-suite and board buy-in. Top-down support, combined with company-wide alignment, is essential to ensure that a nature strategy is well-resourced and integrated into the overall business functions. Participants agreed that centrally aligning on a nature-positive strategy, processes, and metrics is important to ensure consistency in tracking performance and reporting on outcomes across the organization. Sustainability is good business, but it requires long-term commitment and time to get a return on investment.
- Get started and learn along the way. Participants aligned that it is more important to commit to nature-positive actions, starting with pilots to demonstrate feasibility, than to wait for regulation or the right answer. Along the journey, companies will develop best practices to scale across the supply chain. One participant shared how their company worked with dairy farmers for more than four years to change mindsets and practices, resulting in the country’s dairy carbon footprint being 59.4 percent lower than the global average.
- Innovate and communicate the value of your sustainable products. According to a recent McKinsey and NielsenIQ study, consumers are shifting their spending toward products with environmental, social, and governance (ESG)-related claims, resulting in these products achieving disproportionate growth over the past five years. Participants were encouraged by consumers’ appetites for sustainability offerings, as well as the opportunity to market their attributes to grow market share. Some companies related how they had innovated with new products and tested new materials to harness this trend while reducing their impact on the environment.
- Invest in local communities as part of your long-term nature strategy. Building strong relationships with local communities across the value chain is an important step to build trust, secure the license to operate, and strengthen a company’s value proposition. A resources company CSO explained how creating a consultative culture with Indigenous communities had enabled them to learn together, build trust, and improve the resilience of the communities, regions, and the company’s supply chain.
- Break down silos and pursue climate and nature as a joint strategy. McKinsey estimates an approximate $2 trillion overlap between net-zero and nature-positive opportunities. Jointly approaching a climate and nature strategy can generate synergies across investments, improve supply chain resilience, and help engage suppliers and customers in a holistic vision and approach. Participants highlighted the critical role of a working voluntary carbon market to realize these opportunities.
The private sector has an important role in protecting and restoring the world’s natural capital, while simultaneously demonstrating the business value of investing in a nature-positive strategy.
