The EU’s Nature Restoration Law mandates the restoration of 20 percent of land and sea by 2030. Irish businesses must assess their reliance on nature for resilience, writes David McGee
The formal adoption of the European Union (EU) Nature Restoration Law (NRL) by the EU Council in June 2024 marks another victory for nature. Importantly, it urges Irish businesses to understand their reliance on and impact on nature and biodiversity.
Understanding what legislation like this could mean for long-term business resilience is essential.
What is the importance of the Nature Restoration Law?
The NRL is the first continent-wide, comprehensive law of its kind.
Under the NRL, EU countries must implement measures to restore at least 20 percent of the EU’s land and sea areas by 2030 and all ecosystems in need of restoration by 2050. It sets specific legally binding targets and obligations for nature restoration across various ecosystems – from terrestrial to marine, freshwater and urban environments.
Member states must submit national restoration plans to the European Commission by 2026, detailing how they will achieve these targets and how they will monitor and report on their progress.
New business opportunities for ecosystem resilience
Businesses often struggle to connect their operations directly with nature and biodiversity. However, a thorough understanding of value and supply chains reveals that reliance and impact on nature and biodiversity are relevant for every business.
The NRL may affect companies’ suppliers, customers or individual holdings directly or indirectly.
The NRL and existing biodiversity reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) signal to the business world that nature and biodiversity are paramount.
Understanding and investing in nature and biodiversity can also open up new opportunities. The NRL aims to support the EU’s overarching climate mitigation and adaptation objectives while enhancing food security.
Restoration efforts contribute to ecosystem resilience, which can lead to more sustainable long-term business models – especially for those heavily dependent on natural resources.
Creating long-term sustainability
Here are four steps ESG leaders can take to understand your company’s reliance on nature and biodiversity and ensure long-term sustainability.
1. Undertake value chain mapping: Value chain mapping is a crucial tool for understanding the ecosystem of your product or business operations. Gaining visibility of your value chain will assist in identifying where nature and biodiversity intersect and how they are integrated or relied upon throughout the value chain.
2. Evaluate and assess: Once you identify nature and biodiversity throughout the value chain, dependencies and impacts should be evaluated and assessed. Assess how natural resources (land, water, air) are utilised or relied on and how this relates to the locality of the resource.
Nature and biodiversity can be highly local and unique. Where are the vulnerabilities and risks to nature from using resources in the value chain? What is the impact, and what can you do to mitigate it? Equally, where are the opportunities, or where can gains be made?
3. Data and technology: Relevant data and technology will give more certainty and enable informed decision-making by providing more accurate evaluations and assessments of the impacts and opportunities of business operations on nature and biodiversity.
Leveraging non-financial sustainability reporting data, public datasets and geospatial tools will help build a comprehensive and accurate understanding of the interface between businesses, nature and biodiversity. Importantly, this will inform adequate action to reduce impact and dependencies while maximising opportunities.
4. Business strategy and risk management integration: Embed identified nature and biodiversity risks and actions into your broader business strategy and risk management.
Increasingly, businesses are integrating sustainability into their wider business strategy, leading to sustained value, enabling strategic decision-making, driving accountability, maintaining compliance, and setting out how the cost to the business versus the contribution to society is managed.
David McGee is ESG Leader at PwC Ireland
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