- A new study by AlphaBeta, Temasek and the World Economic Forum estimates that 63 percent of Asia Pacific’s GDP, US$19.5 trillion, is threatened by biodiversity and nature loss
- It also identifies 59 nature-positive business opportunities that can unlock US$4.3 trillion in business value and create 232 million jobs annually in Asia Pacific by 2030
SINGAPORE, Sept. 29, 2021 /PRNewswire/ — Asia Pacific, a region rich in endemic biodiversity found nowhere else in the world, is at the heart of the biodiversity and nature loss crisis. It contains the world’s largest concentration of hotspots with natural capital depletion, and under business-as-usual, up to 42 percent of all species in Southeast Asia could be lost, half of which would be global extinctions. Systemic transitions are needed to enable a sustainable future for Asia Pacific, and innovative solutions can unlock the investment required to reset our relationship with the planet.
These are among the findings of a new report by AlphaBeta, Temasek, and the World Economic Forum, ‘New Nature Economy: Asia’s Next Wave’, launched today at Ecosperity Week 2021. The report makes the business case for nature-positive solutions in the region by exploring the risks, opportunities and financing needed for a nature-positive economy.
Threats to nature are threats to business
Three major socioeconomic systems in Asia Pacific pose the biggest threat to nature but also present the largest opportunities for nature-positive economic growth. Together, the value of these opportunities, US$4.3 trillion, is equivalent to 14 percent of Asia Pacific’s GDP in 2019:
- Business-as-usual practices in our food, land and ocean use system are unsustainable. Changing both the way we farm and fish and the quantity of food and clothes we consume is imperative, given the challenges in sustaining the region’s population, which is projected to grow to 5.5 billion by 2050.
We need to “spare” nature – by increasing the amount of land and water left undisturbed to allow natural ecosystems to thrive – and “share” space with nature – by ensuring that working land and water is more hospitable to biodiversity. Achieving this two-fold objective will require implementing and scaling 28 business opportunities that could create over US$1.6 trillion in business value and around 118 million jobs.
- Urbanisation has fuelled the rapid and often unplanned expansion of the infrastructure and built environment, which has led to substantial negative impacts on both nature and humanity. Asia is now home to 99 of the top 100 cities facing the largest environmental risks, and as urbanisation continues to intensify, the built environment’s contribution to biodiversity and nature loss will only continue to grow if left unchecked.
The built environment will need to be more hospitable to nature and wildlife, while reversing its negative impact on the surrounding natural environment. Achieving this requires implementing and scaling 16 business opportunities that could create over US$1.2 trillion in business value and around 65 million new jobs.
- While the energy and extractives system has been a key driver of the region’s growth, energy, electricity, and industry together account for 79 percent of Asia Pacific’s greenhouse gas emissions. Providing reliable access to energy while achieving decarbonisation targets in the region will be a significant challenge and meeting the needs of the region within the means of our planet will require the entire energy and extractives system to be radically revisited.
We need to improve consumption efficiency to reduce the amount of resources we need to extract, improve how we extract those resources to minimise impact on ecosystems, and shift to more renewable energy while not causing further harm to ecosystems. Achieving these will require implementing and scaling 15 business opportunities that could create over US$1.4 trillion in business value and around 49 million new jobs.
In total, unlocking the 59 nature-positive business opportunities across these three systems will require an annual investment of US$1.1 trillion. While substantial, this is a fraction of the US$31.1 trillion announced by the Asian Development Bank’s 45 member countries to combat the COVID-19 pandemic.
“We must halve carbon emissions and begin to reverse nature loss by 2030 to avoid catastrophic consequences, and this can be achieved with new business models that are economically self-sustaining and resilient,” said Dr Steve Howard, Chief Sustainability Officer at Temasek. “The business and investment communities must work together with governments and civil society, and together we can unlock the financing to help drive growth that delivers for people and the planet and the economy.”
Innovation and collaboration needed to catalyse investments for a nature-positive transition
In an exclusive survey conducted for the report, investors and business leaders across Asia Pacific identified key challenges to overcome in the pursuit of nature-positive business models. These barriers can be broadly categorised into four areas: regulatory challenges, market barriers, information gaps, and the lack of supportive enablers for investment.
To overcome these barriers, business and community leaders proposed a range of innovative solutions to galvanise the investment required in the coming decade. The top three suggestions include:
- New externality pricing models to capture the true cost of natural capital and environmental externalities;
- Harmonised biodiversity reporting standards to ensure accountability towards biodiversity goals; and
- New financial products and mechanisms, such as blended finance models as well as regulations to enforce compliance with existing and future environmental policies.
More research and development, as well as greater public-private dialogue, will be critical to creating an enabling environment for investment in a nature-positive economy.
“The COVID-19 pandemic has been the much-needed system shock forcing us to rethink humanity’s relationship with nature. To recover towards a resilient future, we must suitably allocate our investment into protection, restoration and sustainable management of natural capital and valuing ecosystem services”, said Akanksha Khatri, Head of Nature Action Agenda at the World Economic Forum. “Our research and engagement with governments, the private sector, investors, and civil society underscores the need to create new collaborative pathways for a nature-positive economy”.
“Biodiversity and nature loss is a core concern for businesses across the Asia Pacific region, and all available evidence indicates that business-as-usual is no longer an option”, noted Dr. Fraser Thompson, Founder and Managing Director of AlphaBeta. “The good news is that this report demonstrates that there is a pathway for businesses that can not only strengthen the resilience of their operations and actively contribute back to nature, but also create major new growth opportunities. Multistakeholder action between businesses, government, and civil society in Asia Pacific can unlock these nature-positive opportunities.”
The report by AlphaBeta, the World Economic Forum and Temasek can be downloaded at https://bit.ly/NewNatureEconomy
AlphaBeta is a strategy and economic advisory business serving clients across the world from its headquarters in Singapore.
Temasek is an investment company with a net portfolio value of S$381 billion (US$283b) as at 31 March 2021. Our Charter roles as an investor, institution and steward shape our investment stance, ethos and philosophy, to do well, do right and do good. We actively seek sustainable solutions to address present and future challenges, as we capture investment and other opportunities that help to bring about a better, smarter and more sustainable world. Headquartered in Singapore, Temasek has 13 offices around the world. For more information on Temasek, please visit www.temasek.com.sg.
About World Economic Forum
The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas. (www.weforum.org).