Why investing in land is a business imperative for a sustainable future

Land degradation — a crisis exacerbated by increasing droughts — poses an existential threat to our ecosystems and economies. Global GDP is inherently tied to the health of our land with almost half ($44 trillion) at moderate to high risk due to land degradation, according to the 2002 Global Land Outlook report.

Yet now, we are degrading 100 million hectares of healthy and productive lands each year. Our soils — which take up to hundreds of years to form — are being depleted in a matter of weeks. Droughts are hitting harder and more often, with women and girls affected first and worst.

That’s why the United Nations Convention to Combat Desertification (UNCCD) Conference of Parties in Riyadh in December 2024 is so important. COP16, as it is known, will be the 16^th meeting of world leaders, business, NGOs and civil society to tackle drought and land degradation.

This week at Davos, the World Economic Forum began its support to help bring the land agenda to businesses and unlock private sector ambition and action for land restoration ahead of COP16.

The Global Drought Snapshot 2023 report by the UNCCD unveiled at the recent UN Climate Change COP28 highlights a planetary-scale emergency. Droughts have led to substantial economic and agricultural losses. The La Plata Basin of Brazil-Argentina experienced its severest drought in 78 years in 2022, affecting global crop markets.

Europe's drought in 2022, the worst in 500 years, impacted an area roughly the size of Italy and Poland, leading to significant crop failures. It is projected that by 2100, there will be an 80% surge in the severity of droughts in China. In December 2022, drought conditions in the Horn of Africa left 23 million people severely food insecure.

However, these alarming trends are reversible. Strategic land restoration and conservation efforts can mitigate these losses and promote a balance between human development and environmental protection. Businesses, often seen as part of the problem, have the potential to be key players in this global effort.

Land is essential to all natural and human systems. Its restoration and conservation are crucial to achieving the goals of the three Rio Conventions on climate change, desertification, and biodiversity. Revitalizing land can revive life, boost economies, strengthen communities, and accomplish so much more. We cannot segregate the climate crisis, biodiversity loss, and land degradation. These are interconnected issues that mandate a collective response.

Continuing our current path will only perpetuate land degradation and droughts, further eroding essential ecosystem services. Yet there is a way forward. By implementing integrated actions, we can halt and reverse land degradation. This includes restoring soil quality, ensuring sustainable access to and use of water, and rejuvenating forests and natural landscapes.

Some 130 countries have set Land Degradation Neutrality targets by 2030, reflecting a growing global consensus that we must end land loss and restore land back to health. We can turn the tide on land degradation. There is nothing more profitable for most companies than investing in their land to maintain productivity while doing good for the planet.

The business sector plays a pivotal role in global land restoration and drought resilience efforts. These are not only environmental triumphs, but they also present sizeable economic prospects for visionary enterprises. In developing nations, these actions can enhance crop yields by 6-10%, increase carbon storage by roughly 17Gt by 2050, and decrease biodiversity decline by 11% within the same period.

The path to reversing land degradation involves a collaborative effort between governments, international organizations, and the business community. By adopting sustainable land management practices, businesses can contribute significantly to this global effort. This includes investing in technologies that enhance soil health, adopting water-efficient practices, and supporting reforestation and biodiversity conservation initiatives.

The fight against land degradation and droughts goes beyond environmental issues; it is a crucial aspect of business. The economic argument for land investment is strong and convincing. As we work toward a sustainable future, it is essential for the business community to acknowledge the intrinsic worth of healthy land and its critical role in supporting global economies and societies. The moment to act is now, and the argument in favour of land investment has never been more compelling.

This is what’s at stake at the next UNCCD COP16 in Riyadh, Saudi Arabia in December 2024, coinciding with the Convention’s 30^th anniversary. COP16 will be a landmark event for accelerating action on land and drought resilience and a gamechanger for the green transition in the region and beyond, with the private sector being a key part of the solution.