The planet’s ecosystems are nearing critical tipping points, with extinction rates 100-1,000 times higher than they were a century ago. Our current economic system has put natural resources under ever-increasing pressure. As the recent UK Treasury-commissioned Dasgupta Review of the Economics of Biodiversity puts it, our economies “are embedded within Nature… not external to it.” The task now is to embed this recognition in our “contemporary conceptions of economic possibilities.”
Many businesses, recognizing the perils facing the planet, are changing the way they operate. But they can’t do it all alone, and the current rules of our financial and economic system must change if we are to build an equitable, nature-positive, net-zero future.
Such changes make economic sense. Firms that take a long-term view and meet the needs of all stakeholders by prioritizing environmental and social risks and opportunities over short-term gains and profitability outperform their peers in terms of revenue, earnings, investment, and job growth. Similarly, companies with strong environmental, social and governance (ESG) policies perform better and have higher credit ratings.