Implementing nature-based solutions in the value chain – anticipating and surmounting the internal challenges to getting the green light

October 2021 - Catherine Weller, from CISL’s Centre for Business Transformation, explains that, when it comes to going ahead with nature-based solution projects, company decision-making processes need to be fit for purpose.

Nature-based solutions (NbS) is a hot topic in the climate action debate. There is growing acknowledgement that the nature and climate crises need to be addressed together, even in the face of controversies around the use of carbon credits to finance action to tackle nature loss. While net zero strategies are increasingly a driver for business decisions, harnessing nature to help meet corporate climate goals or mitigate other risks is largely uncharted territory for most businesses and their senior leadership teams. Clearly the relatively low uptake by companies means investing in nature-based solutions is far from business as usual. Nature-based solutions can be a great tool to deliver multiple wins, so unlocking significantly increased corporate investment will be essential to help to scale them up to deliver a net-zero, nature-positive world.

Nature-based projects take many different forms. They can tackle specific problems connected to a company’s operations and value chain, for example, reducing future risks of flood damage to a manufacturing site or improving the resilience of a supply chain through better soil health and availability of production-boosting natural pollinators and pest controlling biodiversity. There are also usually plenty of co-benefits. For example, if a company has to deal with a lot of wastewater, then the creation of constructed wetlands not only cleans the water but also provides a habitat for flora and fauna and a recreational space for people. In addition, enriching nature tends to enhance an area’s carbon sink potential resulting in a climate benefit too. Intuitively, obtaining these benefits, while also contributing positively to the company’s nature and climate goals, would seem highly worthwhile. Of course, care must still be taken to ensure the project delivers real and tangible benefits to people, nature and climate and this requires smart and sensible planning, design and implementation.

When nature-based solutions provide so many perceived positives, why has there not yet been a concerted shift from traditional ‘grey infrastructure’? Experience from the frontline is that nature-based solutions projects presented to investment committees are not always welcomed with open arms. The stumbling blocks might be external, for example, poorly designed or outdated regulations that do not enable or support businesses from effectively implementing nature-based solutions. But other challenges might be internal – related to processes built on assumptions that don’t suit nature-based projects. And, the good news is that agency to resolve the internal stumbling blocks often rests with the company itself.

Some challenges are cultural and will require senior leadership and wider change to overcome them. In some sectors, a thorny challenge is the mindset shift necessary to commit to a location or a supplier in a way that flies in the face of their short-term contracting practices. For others, it is the discomforting fact that nature-based solutions come with inherent uncertainties and longer timelines for results to appear (especially when compared with conventional approaches to mitigating risks). Projects might face decision-making criteria which do not take into account all of the benefits (some more tangible than others) a nature-based solution would bring over time. With the evidence base still being developed, it’s understandable that trying to put a number on those benefits is tricky. Further, companies might be challenged by the need to concede some control over the timeline because they will need to work with partners, perhaps even competitors, on the ground.

What internal factors might make individual corporate decision-makers reticent to take the plunge to put money into a nature-based solution project? As with most investments, there are a range of internal actors who will need to support and enable investments in nature-based projects - for example, from the finance, operations, supply chain engagement, procurement, and marketing teams- who will all have different questions and, probably, specific performance targets to meet. Where these are pulling in different directions, this also needs to be addressed.

For any company considering nature-based solutions, it makes sense to anticipate these (and other) internal challenges linked to the nature of nature-based projects. It’s worth exploring if the decision-making process is ‘fit for nature-based solutions’, and pre-emptively removing unnecessary roadblocks. To scale nature-based solutions we need to make sure that getting the green light for that first nature-based project is less painful for every company.

Find out more about CISL’s work with partners across business government and finance to deliver a nature positive future.