The climate fight has always been focused on reducing emissions as the solution to Earth’s global warming problem. But nature also plays an important role in that battle and in the effort to make sure that human activity doesn’t lead to a planet that no longer can sustain life and our global economy as we know them.
More than half of the world’s gross domestic product (GDP) is moderately or highly dependent on nature and its services. Still, despite this dependency, businesses in all sectors and geographies have negative impacts on nature, causing it to degrade faster than it can regenerate. Today, humanity uses resources equivalent to that of 1.75 Earths, meaning humans are using up resources at an unsustainable rate. We have exceeded seven out of eight globally quantified safe and just Earth system boundaries, risking crossing irreversible tipping points.
The call for the transition to “nature positive” has never been louder. To adopt nature-positive action at the scale and speed required, it is crucial for businesses to understand their interface with nature within their sectors.
To help inform these sectoral approaches, Oliver Wyman has partnered with the World Economic Forum (WEF) to release a series of reports covering the chemicals, cement and concrete, and household and personal care products sectors. These reports detail each sector’s material impacts and dependencies on nature and outline priority actions that companies can take to avoid and/or reduce the negative impacts, mitigate nature-related risks, and unlock business opportunities across value chains.
This initiative is a collaboration with Business For Nature and the World Business Council For Sustainable Development, providing sector-specific guidance for 12 global industries.
Chemical industry — How a major polluter can reduce its negative impact
While chemicals are essential to nearly all industrial processes — contributing materials to 95% of all manufactured goods worldwide — the sector is also the largest industry subsector in terms of direct carbon dioxide emissions. Chemicals also are a major consumer of freshwater and responsible for pollution through the inappropriate application of pesticides, the overuse of nitrate-based fertilizers, and thousands of tons of plastic waste each year.
To transform their sector, companies can now prioritize five key actions:
- Increase efficiency in the manufacturing process and expand the use of renewable energy.
- Improve water stewardship through sustainable water management strategies and practices.
- Source responsibly and explore switching to sustainably sourced bio-based or recyclable materials.
- Support nature conservation and restoration and advocate for policy changes that protect nature.
- Expand circularity, product innovation, and customer education on product use and disposal.
Household and personal care products — The steps towards eco-friendly strategies
The household and personal care products industry is central to daily lives and its products, from shampoos and beauty products to detergents and disinfectants, have significantly enhanced living standards. However, progress in hygiene has also meant detrimental impacts on the environment. For instance, the sector relies on huge volumes of freshwater across its entire value chain and drives land use change. It also can be a major source of pollution, in particular because of the plastic waste it produces from packaging and microplastics.
Five key actions that companies in the sector can prioritize are:
- Improve water stewardship throughout the value chain.
- Source responsibly and replace feedstocks with sustainable bio-based or other renewable materials with careful evaluation of trade-offs.
- Influence customer behavior on product use and disposal through educational measures and greater transparency on impacts.
- Support nature conservation and restoration through investment in responsible business practices and nature-based solutions.
- Expand circularity; create innovative, sustainable products and packaging; and engage in progressive collective action and policy advocacy.
Cement and concrete — A vital industry's roadmap to sustainability
Concrete is the second most consumed material in the world after water, with no scalable substitutes currently available. With cement as its key raw material, it is a critical construction material worldwide. Despite making some progress on sustainability efforts, the sector continues to contribute to nature degradation through emitting greenhouse gas emissions, sizable freshwater and natural resource consumption, and ecosystem disturbance from quarrying activities. For example, companies in the sector are responsible for 9% of global industrial water withdrawal, and cement production is responsible for around 7% to 8% of global CO2 emissions.
Cement and concrete companies should prioritize five key actions to
- Improve water stewardship across the value chain.
- Adopt technologies and manufacturing practices to reduce greenhouse gas emissions and other airborne emissions.
- Continue and strengthen reclamation and rehabilitation approaches, biodiversity management of quarries and land stewardship.
- Expand circularity efforts across the value chain.
- Accelerate innovation to offer products that support the nature-positive transition, especially new types of concrete and cement that require less energy-intensive processes to manufacture.
Working on nature’s behalf
Companies that take a lead in sustainable decisions will improve the likelihood of business resilience and long-term value creation. The nature-positive transition opens significant business opportunities, with the value of implementing the sectoral priority actions amounting annually to $320 billion for the chemical sector, $60 billion for the household and personal care products sector, and $40 billion for the cement and concrete sector. But until now, nature has been the one forced to pay the biggest tab.
Authored by Sebastian Gerlach, Engagement Manager