Tighter budgets put nature investment to the test

Eva Siwicka

As budgets tighten, sustainability commitments are often the first areas reviewed and frequently the first to be cut.  
For nature and biodiversity, that pressure can instead be an invitation to lay down the foundations properly.  

For much of the past decade, sustainability has sat at the edges of business strategy, a commitment layered on top of the core plan rather than built into it from the outset. A tighter environment forces every initiative to justify its place.

It is an opening for the nature agenda to mature and move from a parallel workstream into something embedded in strategy and how capital allocation decisions are made.

This year’s Nature and Business Symposium showed how much the conversation around nature in New Zealand has matured. Much of what follows draws on those conversations, offering practical ways to build strong foundations, even in tough times. 

With a business case, nature is no longer a ‘nice to have’

Treating nature as investable infrastructure means investment has to be justified in the same terms as any other capital decision. That is a reasonable test and one businesses are increasingly able to meet. Every dollar allocated to nature needs a return that can be demonstrated: the data behind it, the outcomes it produces and the story that connects the two.

Without that level of transparency, nature investment tends to be treated as discretionary rather than core, and it is usually among the first items reviewed when budgets tighten.

For a significant number of New Zealand businesses, natural capital already underpins core operations through healthy soils, reliable water and functioning ecosystems. That dependency deserves the same analytical rigour applied to any other material asset.  

Match the scale to the objective

Businesses bring nature investment to the board table for different reasons. Some are focused on value protection: risk mitigation, supply chain resilience, regulatory reporting. Others are focused on value creation: brand, reputation, community relationships. Neither is better or worse. They are simply different and each is a legitimate strategy in its own right. 
 
The symposium made clear that nature investment in New Zealand requires thinking at greater scale. Most businesses expect to see returns on nature investment in the form of continued operations, cost savings from reduced maintenance or avoided damage to assets, alongside wider environmental and social benefits.

That kind of return requires catchment-scale investment, backed by greater coordination and collaboration between co-investment partners. This approach to nature investing also appeals to institutional investors and international capital, sources of finance New Zealand particularly wants to attract.

Indigenous frameworks discussed at the symposium, including those shared by Ngāti Whātua Ōrākei, reflect generations of knowledge about managing land and water at exactly this scale, a reminder that catchment thinking is less a new idea than a return to an older one. 

The head start comes with a caution

Most organisations already have infrastructure built originally for climate that can also support nature, including climate reporting systems, board-level oversight and established targets. Nature does not need a second system built from scratch. It can build on a journey already under way.

Carbon tunnel vision – losing sight of the wider picture by fixating on a single metric – remains a very real risk. The infrastructure built for carbon can carry nature forward, but only if the metric does not override the bigger picture.

What a board tolerates becomes the standard it sets

Once the business case exists and the scale is right, the remaining barrier is rarely a lack of information. It is whether the board is prepared to act on what it already knows.

What a board tolerates becomes the standard it sets. Time spent waiting is itself a decision and it is often the riskiest one. Waiting for certainty on nature-related risk is no different from waiting for certainty on any other material issue. It can look like prudence, but it is frequently just delay.

Questions worth bringing to the board table 

• • Can we demonstrate the return on what has already been spent on nature?
  • Does the scale of our nature initiatives match the objective, whether that is brand, community relationships, cost savings or financial return?
  • Where are we using ‘too hard’ as a substitute for an actual decision?
  • Are we using existing climate infrastructure to expand our thinking and make nature action easier, or are we fixated on a single metric? 

Boards that engage with these questions are better placed to make sound, defensible decisions about nature investment. Boards that don’t risk getting the scale wrong, missing a case they could have made and carrying exposure they haven’t accounted for.

Eva Siwicka is a co-founder of Gyre, a nature restoration investment platform, and specialises in nature and business integration, including Taskforce on Nature-related Financial Disclosures (TNFD).