Driven by nature

Nature underpins our global economy, with over half of the world’s total GDP of $44 trillion moderately or highly dependent on nature and its services and, as a result, at risk of imminent disruption due to exposure to drivers of nature loss. As outlined in the World Economic Forum’s Global Risks Report 2024, environmental risks make up half of the top 10 risks over the next decade, ranking biodiversity loss and ecosystem collapse together as the third biggest risk on a global scale.

We are already facing unprecedented biodiversity loss, and in the corporate world, this has a significant impact on supply chains and on companies’ physical assets, in turn disrupting long-term business models. So, it is essential that all industrial sectors turn rapidly away from a ‘business as usual’ approach and take rapid action.

Each industrial sector has its own distinct dependencies on the natural world, different interactions with it, and different impacts on it. Without swift action to reduce pressure on nature and mitigate the impacts of business operations, it will be impossible to turn the tide. Industries need sector-specific guidance on strategies – particularly when it comes to nature, an inherently complex challenge.

As anyone reading this will know, chemicals are essential to daily life and to nearly all industrial processes. Chemical-based fertilisers feed our population and ensure food security; catalysts are essential to the manufacturing of life- saving drugs; and applications of chemicals such as in home insulation help reduce greenhouse gas emissions.

But the sector also contributes to biodiversity loss through pollution, freshwater use and land conversion across its value chain – the sector uses 5-10 per cent of global freshwater resource, so there is an urgent need to accelerate the sustainability journey for chemical companies, build on existing strategies and implement innovative tactics, with purpose.

The World Economic Forum’s own sector-specific guidance recognises the efforts made by many in reducing carbon emissions and decreasing pollution. Our report is based on consultations with leaders and experts across the sector and highlights the priority actions all companies should implement if they are to realise the opportunities becoming more nature positive brings.

Companies  that take bold steps today will enjoy competitive advantages, stemming from more resilient and sustainable supply chains, a positive public image and also greater support from the financial sector.

Ulrike Sapiro, the Chief Sustainability Officer at chemicals company Henkel, highlighted the importance of the Forum’s sector-specific guidance on a Nature Positive Hub panel. The guidance, she said, gives the sector clarity. Five points of focus, preventing companies from being lost on what next steps should be, and giving sustainability teams ammunition when going to the Board, to show that these recommended actions are based on risk and on dependencies for the business with clear bottom-line implications, and not an environmental concern alone.

For example, just using fewer materials contributes to the circular economy by addressing the triple planetary threats: climate change, biodiversity loss and pollution. Companies like Henkel produce adhesives, a critical element for packaging. Ulrike shared that simple innovations, such as padded envelopes, can help cut plastic waste in e-commerce packaging. The chemical sector, by being in the middle of the supply chain, is in a prime position to enable circularity.