Nature is frequently seen as being "free of charge," leading to systemic undervaluation or lack of value across all sectors of society and decision-making. Despite residing in one of the world's biodiversity hotspots, as New Zealanders we frequently undervalue nature, view it as an externality, and therefore are being confronted by a growing risk of overexploitation. While we tend to perceive our local towns and cities as distinct from the natural world, infrastructure is actually one of the primary sectors most vulnerable to biodiversity loss.
Nature’s contribution to the global economy is estimated to be USD$125 trillion per year1, while over 50 percent of the world’s GDP (USD$44 trillion) is moderately or highly dependent on nature and its services2. Unsurprisingly, the World Economic Forum’s 2021 Global Risks Report ranks biodiversity loss as the fourth top risk by impact, following infectious diseases, climate action failure and weapons of mass destruction.
While we tend to perceive our local towns and cities as distinct from the natural world, infrastructure is actually one of the primary sectors most vulnerable to biodiversity loss.
What are nature-based solutions in infrastructure?
Essentially, nature-based solutions promote the value of biodiversity and natural capital in the planning, design, construction, and operation of infrastructure to yield environmental, social, and economic benefits.
Examples range from integrating vegetation into buildings to address urban heat islands, air quality, stormwater management, and wildlife habitats; implementing green stormwater infrastructure for runoff, to prevent flooding, improve water quality; as well as incorporating native vegetation and green spaces into infrastructure projects to enhance aesthetics and support biodiversity.
By considering natural capital and biodiversity as an integral part of ESG strategy, we can increase the sustainability and resilience of our infrastructure and reduce the risk and the cost and bankability of these long term investments.
KPMG has deep experience in supporting our infrastructure clients to establish their biodiversity and natural capital strategy. This is how we can help you:
•Undertake biodiversity vulnerability risk assessments across your asset infrastructure portfolio
•Establish ambitious and realistic biodiversity targets and develop a biodiversity roadmap
•Implement reporting and assurance processes to reduce nature-related risks
•Help your organisation stay on top of new technologies, emerging tools, and data sets that can assist in measuring and managing biodiversity in your particular infrastructure sector
•Manage the processes for accounting natural capital and biodiversity, as well as creating nature-based financial instruments and solutions to support biodiversity preservation
•Communicate confidently to investors and regulators about biodiversity issues and demonstrate the ability to address nature-related challenges
•Assess potential future opportunities from investing in nature-based solutions, in addition to or as part of your strategy for climate change and decarbonisation
1. Costanza, R, De Groot, R, Sutton, P, Van der Ploeg, S, Anderson, S J, Kubiszewski, I & Turner, R K (2014). Changes in the global value of ecosystem services. Global environmental change, 26, 152-158
2. World Economic Forum: Nature Risk Rising (PDF 6.43MB) | weforum.org
The business case for protecting and restoring nature and biodiversity is growing. The challenge now is around mobilizing funding (both public and private) to help close the nature financing gap.
This paper provides a clear business case for the need to invest in nature, an up-to-date overview of the current landscape of investment strategies for financing and investing in this space (both from a public and a private perspective), an analysis of the current challenges in scaling investments in nature, and concludes with clear steps for moving forwards.
