Nature and the short-term reach of the long-term risks

Those of us working in nature and sustainability have spent a career trying to present the business case for action. Outlining the risks to business and society for not adequately addressing impacts on the natural world. At the same time, we are increasingly witness to the potential manifestation of the climate and biodiversity crises. Extreme weather events, destructive wildfires and the associated loss of property, crops and livelihoods are becoming more frequent. The last several years have seen remarkable progress on corporate action for nature, and yet nature risk is still viewed as a long-term issue. Not something that needs to be dealt with this quarter, this financial year.

Nature risk acknowledged  

This is clearly illustrated by the annual WEF Global Risks Report, now in its 20th year. We have seen the steady climb of biodiversity loss up the long-term risk top ten and the environment category dominate the top five long-term risks.  

They have, however, disappeared from the short-term risks. This year, other than extreme weather events and pollution, environmental issues are not considered immediate high priority risks. This is not because the risk has gone away. Biodiversity is being lost at a faster rate than anytime in human history, and the globe is breaching the 1.5°C increase in 2024. Perhaps the climate and biodiversity risks are just not with us yet. However, this seems odd given the WEF risk reports, now in its 20th year, has been flagging biodiversity loss and climate breakdown as key risks for over 10 years.

Nature risk postponed

This apparent contradiction has been noted by several observers this year. Why are environmental risks only ever viewed as long-term? Surely, the long-term risks trundle toward us and become short term? Yet this does not seem to be happening, and if anything, the opposite is taking place within these assessments.

This, however, should not be a surprise. The short-term risks are, almost by definition, going to be the pressing issues of the day: conflicts in the Ukraine, Middle East or elsewhere; pandemic, inflation; misinformation. Those that impact business in the here and now, affecting the bottom line in this quarter or financial year. Environmental collapse is playing out over a longer time-scale, and is therefore inevitably viewed as a long-term risk. A concern is however that this attitude can lead to us thinking that we should postpone action on climate and nature while we focus on the more immediate issues. In 2015 Mark Carney used the phrase “Tragedy of the Horizon” for the same issue regarding climate action. If something is always long-term, the new never need to take action.

Addressing the long-term makes abates the short-term

Focusing on the short-term however ignores the fundamental connectedness of nature with the whole economy. Without fixing the natural crisis, we are exacerbating short-term risks. The loss of biodiversity, and climate change have a huge range of knock-on impacts, including involuntary migration and extreme weather events, both of which are listed as short-term risks this year. Additionally, they also can exacerbate social polarisation, inequality, and potentially lead to confrontation. Our biggest long-term risks will manifest in the short term through these impacts, and it will be through these indirect impacts that the loss of nature and climate change will continue to be felt. This is where they most strongly and clearly interface with our societies and economies.

A decade ago, Carle Folke and colleagues developed the ‘wedding cake’ figure of the SDGs. This showed that the biosphere underpins all the other SDGs. Another way of looking at it might be temporal. Top of the cake are the most immediate concerns, the economy, at the base holding it all in place, are the longer-term issues, the biosphere. Similarly, the recently issued Nexus Report from IPBES vividly presents the interconnections between biodiversity, climate, water, human health, and thus all of society.

Simply focusing on dealing with the short-term and postponing dealing with the longer-term risks will just make the short-term risks worse, as we miss some of the key drivers for these risks. Dealing with the long-term risks gives us greater resilience to manage the ever-changing short-term ones.

Whose responsibility is it anyway?

The WEF report is the view of business leaders. Is dealing with long-term risk the sole responsibility of business? Perhaps not. Shorter term expectations of shareholders may limit business’ capacity to fix long-term issues. This is more the purview of regulators. The Kunming-Montreal Global Biodiversity Framework and Paris Accords are the guiding frameworks that governments and regulators should be following. Business can and must play a role in supporting those agreements. It really is in their own best interests. By supporting the long-term fixes and acting on them within their own sphere of influence, many of the short-term risks on business will be less severe. So, businesses can avoid and minimise impacts in their value chain, lobby for subsidies that fix the environment, not harm it, they can support policies such as those mandating biodiversity net gain, and they can finance nature recovery in areas they operate. Initiatives such as Business for Nature, or the UK Business & Biodiversity Forum exist to do just this, be the bridge between business and policy makers. Helping companies support the implementation of the Global Biodiversity Framework. Join us, support a natural positive future to manage those long-term risks and make our short-term risks a little less risky.

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