Jonny’s talk was a hugely convincing demonstration of how important ‘natural capital’, and its conservation and restoration, is, in both economic and environmental terms for a number of industries, but also in the fight against climate change, and more generally in terms of human wellbeing.
Natural capital is degrading on a massive scale
Natural capital is the stock of renewable and non-renewable natural resources - including plants, animals, air, water, soils and minerals - that combine to yield a flow of benefits to people: to businesses and to society as a whole, enhancing our lives in so many ways.
Source: Jonny Hughes, UNEP-WCMC
In its detailed report last year (to which UNEP-WCMC made a significant contribution), the Intergovernmental Panel of Biodiversity and Ecosystem Service (IPBES) described and assessed the degradation of biodiversity and other aspects of natural capital on a global scale. Some of the most striking figures from this report include:
Jonny explained how these profound human impacts on the planet result from many factors, including changes in land use and sea use, direct exploitation of nature, climate change, pollution and invasive alien species - and these drivers, in turn, stem from a complex web of drivers: demographic and sociocultural; economic and technological; institutions and government; conflicts and epidemics.
Restoring biodiversity has huge value
Jonny’s overarching message is that the benefits of protecting nature massively outweigh the cost of doing so. For example:
Source: Jonny Hughes, UNEP-WCMC
The strong link between biodiversity restoration and the fight against climate change
Nature-based solutions can not only restore biodiversity, but they also have an essential role to play in the fight against climate change, in terms both of mitigation (the path towards net zero emissions) and of adaptation (protecting life from the extreme weather events that are made worse by climate change).
Mitigation - according to the IPBES Global Assessment Report 2019, nature-based solutions can “provide 37% of climate change mitigation until 2030”. This is well recognised by the UN, with the Report of the Secretary General on the 2019 Climate Action Summit concluding that nature-based solutions have the potential to reduce CO2 emissions by 12Gt each year, the equivalent of emissions from all the world’s coal fired plants.
Jonny explained that planting trees is a generally positive intervention but added that ‘taking pressure off the ecosystems’ can be an even more effective solution, for example reducing overgrazing can rapidly accelerate the take-up of carbon by ecosystems.
Importantly, Jonny did not say that the ‘carbon capture’ potential of nature-based solutions would necessarily be sufficient - on the contrary he pointed out that they would be complementary with science-based Carbon Capture and Storage technologies currently being developed, that could become sufficiently cost effective over the next few years.
Adaptation - according to the Global Commission on Adaptation 2019: “nature can be harnessed specifically to reduce climate hazards”, and nature is a very cost effective way of doing so, for example through natural vegetation to degraded landscapes and coastal areas to reduce the risk and impact of flooding storm and storm surges.
A chance to do things differently
With the Covid pandemic, the IEA predicts a 8% drop in emissions in 2020 compared to 2019 - but as Chris Stark had explained to us a few weeks ago this will not have any significant impact on the global warming trajectory if it all went back to normal in 2021.
The key here is for the global community to ‘seize the moment’ and ‘flatten the climate curve’, as per the cover page of The Economist last week - i.e. to try and make sure that we have actually reached, and passed, peak carbon emissions, if this proves achievable.
This is what the EU is trying to do with some of its €750bn Covid-19 recovery fund, of which 25% will be going to climate action, and to which green criteria are being attached. The EU is making a particular effort on biodiversity, saying it will mobilise all tools and will seek a “leading position in the world”. Jonny’s sense is that such ‘green stimuli’, in Europe and beyond, are here for good – becoming institutionally entrenched in many administrations and governments.
Opportunities for angel investors
Finally, Jonny offered his unique perspective on a number of broad areas related to natural capital that he believes could offer attractive investment opportunities for angel investors. These include:
Green Angel Syndicate members have already invested in several companies operating in conservation-related activities, for example NatureMetrics , NatureSpace Partnerships or Scottish Bee Company , as well as Entomics .
We will continue to look out for innovative projects and ambitious entrepreneurs working in the above-mentioned areas. Indeed we have a strong conviction that successful businesses in these areas can not only have a positive impact by protecting and restoring the environment, but also, given the scale of the related market opportunities, can deliver fantastic returns for early stage investors.