From ozone to oxygen

The white paper at a glance

Systems thinking could be the key to solving the problem of how we preserve and regenerate our natural capital. Read our latest white paper to find out more.

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As humans, we tend to focus our attention on narrow issues. The simpler the challenge, the easier it is for us to comprehend and tackle it with action. Unfortunately, due to a bug of human understanding, the same is not true when it comes to more complicated issues, such as climate change.

In this publication, UBS sustainability specialists share their thoughts on the various aspects that we need to consider if we are to preserve and regenerate the earth’s limited stock of natural capital.

They highlight different areas, including necessary policy innovations, the implementation of frameworks, and the role that investors and the private sector can play in improving our collective response to the impending challenges linked to natural capital. Our experts suggest thinking in systems could hold the key.

Podcast

The podcast

00:00

The latest Monocle podcast The Bulletin with UBS explores the white paper from the UBS Sustainability & Impact Institute. Joining the conversation are Head of the Institute, Mike Ryan, and Judson Berkey from the Chief Sustainability Office at UBS. They discuss what’s required in order to preserve and regenerate the earth’s limited stock of natural capital - from policy innovations and new frameworks to the role that investors and the private sector can play.

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Source: Monocle, for more podcasts visit https://monocle.com/radio/shows/the-bulletin-with-ubs/407/

Key takeaways

Our latest white paper sets out to do the following:

Establish the link between biodiversity, ecosystems and natural capital:

What is biodiversity?

the abundance of life forms found in any one geographical area
an essential characteristic of nature

Ecosystem Assets and Services

Biodiversity is critical to maintaining the quality, resilience and quantity of ecosystem assets and the provision of ecosystem services that both business and society rely upon.

What is natural capital?

a complex, interconnected ecosystem that we need
private sectors and financial markets are critical to its preservation

What is the problem?

GHC emissions and concentrations are still on the rise. This indicates that historical climate efforts, publicized scientific evidence and climate policy have not yet had the desired impact.

When it comes to natural capital initiatives, there’s a real need to create strong and collaborative connections between the fields of action, science and policy in order to move forward and make tangible progress.

The nine planetary boundaries

The above image shows the nine planetary boundaries diagram depicted in a circle which, starting from 12 o'clock and running clock-wise, include: climate change, novel entities, stratospheric ozone depletion, atmospheric aerosol loading, ocean acidification, biogeochemical flows, freshwater use, land-system change, and biosphere integrity.

Review lessons learned from previous systems breakdowns:

Humans lean towards simple answers
Simplicity isn’t always the key
We must learn how to embrace complexity and take decisive action
Mindset shift: we need a systems-based approach to problem solving i.e. to recognize that everything is connected to everything else. We need to ask ourselves: what effect are our actions having on the system, how can we measure and adjust our actions through feedback loops to ensure a positive effect, why are we doing this?

What actions have already been taken to preserve and regenerate nature?

The Nature based Financial Disclosure (TNFD) has been established
Collaborative investor engagement has increased to restore and conserve natural capital
Models already exist to guide investors on how to engage with companies on biodiversity - how could they be used more widely?
Science Based Targets for nature are currently being developed to help companies establish action-based pathways

"Humans like simple solutions. But it's time for us to embrace the complexity of nature in order to co-exist with it.”

Veronica Weisser

Identify next steps:

Our specialists offer their opinions on a variety of approaches and what we need to consider next

It’s crucial to implement local, on-the-ground stewardship for natural capital
Leverage learnings and best practices from the development of, and implementation of, science-based climate policies, in order to develop and implement effective solutions when it comes to the preservation and enhancement of natural capital
Make sure we know what’s happening ‘on the ground’. That means establishing a substantial data “commons”, or data mesh, as soon as possible
Use that data to validate the frameworks, policies and scenario planning that are designed to support nature and climate positive solutions
Financial sector regulators will likely look to climate policy when setting natural capital regulation
Biodiversity and natural capital stress testing could be be a beneficial tool for regulators to deploy (due to similar behavioural reactions between financial markets and ecosystems under stress)
Clear definitions, architecture, design and ongoing supervision of individual assets and the broader natural capital system will be crucial in order to conserve and regenerate the underlying assets of the natural capital markets

                We need to recognize that destruction is not growth. That externalities are often invisible and that they pose a real risk to the environment, society and of course markets.
                
            Julie Hudson

Meet our specialists

This white paper is a collaborative effort of expert opinion from our in-house team:

Judson Berkey

Lead Advocacy, Chief Sustainability Office

Mike Ryan

Head of Sustainability and Impact Institute

Francis Condon

Head of Sustainable Thematic Engagement, UBS Asset Management

Veronica Weisser

Thought Leader

Julie Hudson

Research – ESG Research – Senior Advisor

Annabel Willder

ESG Research - EMEA Analyst

Discover more

More insights and research from the Institute

Visions

In our paper we feature UBS Global Visionaries, these are Entrepreneurs and thought leaders working to achieve the 17 UN sustainable development goals. UBS supports them to scale their positive impact.

Problem-free palm oil

Shara Ticku, C16 Biosciences CEO and Co-founder

Seafood, Evolved

Chad Sarno, Good Catch Chief Culinary Officer & Co-founder, Chris Kerr, Good Catch Executive Chair & Co-founder

Learn more about the UBS Global Visionaries

ubs.com/globalvisionaries

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