Changing the Business Case for Nature

14 October 2026

A familiar story from environmental economics begins with a factory beside a river. At first, the factory finds it cheaper to discharge its waste into the water. But later a government might regulate pollution or introduce a tax on discharges. People downstream might have legal rights that allow them to demand compensation or prevent the pollution. The river might become so dirty that the factory's own operations are affected. Suddenly, treating the waste, changing production methods or helping restore the river might become worthwhile. Or the factory might simply move elsewhere.

What might today’s factories do about nature? The Science Based Targets Network (SBTN) helps businesses to ‘operate within environmental boundaries on a socially equitable basis through implementation of science-based targets’. There is no assumption that every target delivers a positive financial return for a business; our factory might respond to ecological limits and societal needs, alongside its own commercial needs. The Taskforce on Nature-related Financial Disclosures (TNFD) provides a structure for understanding and reporting material financial issues arising from nature impacts and dependencies; our factory might respond based primarily on commercial needs, given ecological (and societal, market, regulatory, legal and other relevant) limits.

The TNFD's challenge is to translate environmental issues into financial risks and business decisions. The SBTN's challenge is to translate environmental boundaries into corporate responsibilities and actions. The distinction is not absolute: the TNFD is primarily grounded in the economics of private business decisions, but its mission also includes redirecting financial flows away from nature-negative outcomes and towards nature-positive outcomes. SBTN, for its part, acknowledges commercial trade-offs and distinguishes its investment case from narrow short-term returns on investment.

Nature-positive actions can make sense from a purely commercial perspective. Interviews with 14 early adopters of the SBTN describe several forms of business value, including protecting revenue, lowering costs, focusing resources and preparing for future requirements. The two initiatives work closely together and this week coordinated the release of their updates.

The difficult cases arise when a business can see the harm it causes but has insufficient commercial reasons to act. This is likely to be a familiar problem for many businesses. SBTN’s distinctive contribution can be its framework to help establish how much action is needed, and where, using ecological evidence and societal goals. A science-based target can identify action beyond what a company would otherwise choose. Meeting that target may involve paying to address impacts previously borne elsewhere.

Two examples from the early 1990s illustrate the potential for action motivated by ecological and societal goals, even with uncertain commercial prospects. A group of UK-based NGOs established Cafédirect in 1991 to improve the position of coffee growers. Drawing on their experience of supply chains, distribution and campaigning, the founders were able to take fair-trade coffee into mainstream retail establishments. Coffee bearing the Fairtrade Mark, which Cafédirect began carrying in 1994, became an ordinary purchasing option, and supermarket own-label products were among those that helped to grow the wider fair-trade coffee market.

Refrigerator manufacturers moved away from ozone-depleting CFCs in the 1980s, but the leading replacement was a powerful greenhouse gas. Greenpeace worked with a German manufacturer to develop Greenfreeze, a refrigeration technology with much lower climate impacts. The partners secured consumer pre-orders, and production began in 1993. The collaboration established demand, supported other international programmes and improved technical standards, prompting larger manufacturers to eventually adopt the technology. A 2022 assessment reported that natural hydrocarbons similar to those in Greenfreeze were used in 75% of new household refrigerators and freezers worldwide.

Commercial imperatives were present in both examples, though evidence of subsequent commercial success in each case is equivocal. The company involved with Greenfreeze went bankrupt a few years later. Their significance is that businesses and partners, acting at least in part for socially motivated reasons, helped to change what was commercially possible for others.

These examples hint at a further, more transformative possibility: nature-positive actions that change the conditions under which future industry decisions are made. This possibility is about much more than one company’s internal performance. We are not talking about actions that help a business to discover efficiencies in its existing processes. We are not talking about actions that anticipate future requirements. We are talking about actions that affect supply chains or industries. For example, companies committing to similar targets could create demand for different materials and production methods, giving suppliers good reason to expect future orders and the confidence to invest.

Thanks in significant part to the work of the TNFD and the SBTN, businesses have the tools to understand their impacts and dependencies on nature. Comprehensive target-setting is uncommon, but we can hope that it will accelerate. Whether enough businesses will find it commercially worthwhile to act at the scale required remains an open question. But perhaps our factory might one day do more than respond to incentives set by others; it might even help change the conditions under which others make their decisions.