How investing in Natural Climate Solutions can make companies more resilient

The world heads into the UN Climate Change Conference in Glasgow facing some sobering facts. The August IPCC report warns of dire consequences for our way of life, and our planet, if we are unable to keep warming at 1.5C above pre-industrial levels.

This is an all-hands-on-deck moment, and urgent action is needed. However, it’s also important to consider what changes and policies enacted today can have the greatest and swiftest impact on reducing carbon emissions tomorrow. One facet of climate change mitigation interventions—Natural Climate Solutions (NCS)—must be central to these efforts.

NCS—conservation, restoration and land management improvement—is crucial to reduce land sector emissions and meet the goals of the Paris Agreement. Land sector carbon emissions account for at least a quarter of global emissions, but they are also the most quickly reversible and could deliver 30% of the mitigation required to reach net-zero emissions. When done right, NCS also safeguard biodiversity, secure water supplies and support livelihoods for local communities. In effect, NCS can provide an effective and efficient way to help people and the planet. As such, we should find ways to encourage investment to scale up NCS efforts globally.

To maximize Nestlé’s impact and the impact of other businesses in the land use sector, rules and regulations must be crafted to incentivize companies to invest directly within their supply chains and sourcing landscapes (referred to as insetting), over balancing greenhouse gas emissions by investing in activities unrelated to their company and its value chain (often called offsetting). Both are important to address the world’s climate needs. But transforming the land use sector, including ending deforestation, restoring natural ecosystems and delivering resilient livelihoods for local communities, requires giving a higher value to interventions connected to a company’s business.

This is because land sector companies are uniquely suited to drive these projects, as they already invest in these ecosystems, source from the landscapes and have a vested interest in keeping them resilient and productive. They’re also more likely to integrate social safeguards to support healthy and inclusive livelihoods and economies. Such long-term commitments serve these communities over time. The permanence of these projects allows for collaboration—joint work between farmers, suppliers, traders and buyers that truly transforms the nature of agricultural value chains. By working with local governments and civil society organizations at the landscape level, we can serve the community’s good—and the greater environmental good.

Working with our project partners, Nestlé is developing promising case studies to show how NCS can and should be implemented in a corporate value chain. A significant quantity of the ingredients we purchase come from natural ecosystems that are under pressure from agriculture: 27% of our in-scope 2018 footprint can be linked to these agricultural ingredients. It’s notable that in the IPCC scenarios for the 1.5C target, greenhouse gas emissions from land use change are nearly eliminated by 2030.

Nestlé’s Net Zero Roadmap strategically uses NCS to reduce and remove emissions for this very reason, and we estimate that our actions—such as those aimed at protecting standing forests, conserving natural ecosystems, reforestation and restoration of degraded natural ecosystems and agroforestry within our supply chain by 2030—could reduce CO2 emissions by 17 million tons. This is in addition to our other mitigation efforts like cutting the methane produced by animals and helping to make farms more efficient.

The question for companies is, how can we make the business case for the aggressive actions that are needed? After all, real and sustainable systemic change will require deep engagement with communities, suppliers and industry peers to align with the 1.5C pathway. We have to find a way to collectively invest in, and support, the transformation of our entire industry. And yet land sector businesses face key barriers to doing so.

To be clear, we cannot hit the 1.5C target unless companies invest in conservation and restoration urgently and at scale. We know, too, that this investment must happen at the landscape level. These investments will not materialize, however, unless companies are both incentivized to invest beyond the farm, in the sourcing landscape, and know that those investments will count toward science-based targets. Such changes would also enable value chain partnerships and landscape collaboration—with clear rules on shared costs and shared benefits so that companies can invest with confidence but preclude the double-counting of benefits. Finally, NCS work is, by nature, intended for the long haul and should be evaluated as such. This is best achieved when the partners have a long-term stake in the project.

Because climate action is needed now, we must urgently define rules and incentives that open the doors to collaboration and partnerships in the sourcing landscapes of companies that source, produce and distribute agricultural commodities and food and beverage products. We will be cheating ourselves, and the planet, if we’re bound by narrow rules that create an each-business-for-itself culture that focuses activities on individual farms without recognizing how those farms are connected with the broader landscape.

The only way a company of our scale can continue to thrive is to invest in the communities in which we operate with an eye on the future. But with a challenge this vast and a crisis this urgent, we believe it is time for other companies in the food and agriculture industry to join what must be a concerted global effort to engage in the conversations that will unlock the great potential of NCS.

We must use the momentum of Glasgow, and a unity of purpose, to usher in an essential transformation to sustainable land use. Every day, and every effort, matters.