Interview: Nature-based solutions for Circular Economy, a strategic answer to the post COVID-19 related emergency

As the Mediterranean region is plunged into the COVID-19 crisis, the nexus between nature and sustainable development has once more been neglected, looking for short-term solutions to the current socio-economic crisis. Recovery plans in the Mediterranean showed a negative contribution on the environment, with stimulus packages substantially ignoring nature and biodiversity, and emerging markets reinforcing high-carbon and low resilience economic activities. Even when aimed at reducing carbon footprint of specific industrial or production sectors, recovery plans resulted to be harmful to nature.  

We interviewed Alessandra Pome, Associate Expert at SCP/RAC, on the importance of endorsing a new vision of sustainable development in the Region, in which NbS go hand in hand with the transition to a circular economy.

• NbS is a term often used recently, creeping into current post covid strategy concerns? Could you explain to us what NbS stands for and what is it? 

NbS stands for Nature-based Solutions. Simply put, NbS are actions that simultaneously enhance ecosystem resilience and address multiple societal challenges, such as food and water security, climate change, or human health. 

NbS is a relatively new concept, which is quite complex to comprehend as it encompasses a range of different approaches from a variety of spheres (some from the scientific research domain, others from practice or policy contexts), such ecosystem restoration practices to infrastructure-related approaches.

Due to its complexity, it has been interpreted in different ways. For example, the International Union for Conservation of Nature (IUCN) defines NbS as “actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits” (2016 IUCN resolution WCC-2016-Res-069), while the European Commission defines NbS as “solutions that are inspired and supported by nature, which are cost-effective, simultaneously provide environmental, social and economic benefits and help build resilience. Such solutions bring more, and more diverse, nature and natural features and processes into cities, landscapes and seascapes, through locally adapted, resource-efficient and systemic interventions.”

The main difference between these two definitions is that the IUCN emphasizes the need for a well-managed or restored ecosystem to be at the heart of any NbS, while the European Commission definition is somewhat broader and places more emphasis on applying solutions that not only use nature but are also inspired and supported by nature. 

The need for a common language and framework that can ensure the quality and credibility of NbS has recently prompted IUCN to launch an extensive consultations process that lasted more than 2 years and resulted in the definition of the first Global Standard for NbS.

A Global Standard is indeed essential to increase the scale and impact of the NbS approach, prevent unanticipated negative outcomes or misuse, and help funding agencies, policy makers and other stakeholders assess the effectiveness of interventions. Most importantly, a globally accepted standard provides assurance to potential funders, investors and decision makers that the proposed NbS are aligned with international best practices and likely to effectively deliver meaningful impact. As a new and unfamiliar asset class, funders, investors (particularly private investors) and decision makers need to be confident that the NbS initiatives they support are effective, scalable and consider potential externalities. Yet, many organisations and enterprises may not have the expertise or resources to help them analyse and evaluate potential NbS projects. The IUCN Global NbS Standard provides a reliable benchmark, minimising risks and adding assurance.

• What is the link between NbS and Circular Economy and entrepreneurship? What is the role of NbS and circular entrepreneurship in a post-covid recovery strategy?

As clearly stated by Dr Enric Sala, Explorer-in-Residence at National Geographic, in The Nature of Nature. “Everything is reused or repurposed in nonhuman ecosystems. The natural world is the perfect circular economy, where everything, even after its lifetime, becomes a source for something else.”

Circular economy is just a human attempt to replicate the perfection of nature to decouple economic growth from the use of scarce, natural resources. As for nature, the ultimate goal is to build a world with no waste.

NbS embodies the concept of circularity: by protecting, sustainably managing or restoring natural or modified ecosystems, NbS allows ecosystems to fully realise their natural cycles and best deliver their services and goods to the benefits of humans and nature. However, the majority of NbS today are far from able to generate revenues. According to the most recent UN Report on the State of Finance for Nature, NBS financing is more dependent on public funds than other types of climate financing investment. Of the USD 133 billion which currently flows into nature-based solutions annually, public funds represent 86% of total investment flows and private finance only 14%.

Financially viable NbS interventions delivered by private organisations (companies or cooperatives), addressing one or multiple societal challenges in an integrated manner (for-profit NbS) are still rare. In addition, despite being able to financially sustain their operations and already attract private investments, for-profit NbS might need investments in activities outside the usual scope of business, i.e., additional activities that do not directly generate profit but that contribute to increased impact and accountability. These activities may not be attractive to traditional financial institutions or private investors, and might therefore require a different approach to funding, (e.g., access to grants, public-private partnerships^[1]) or technical assistance.

• What challenges and barriers are facing the NbS? What do they need?

Allow me to take staramaki SCE’s project as an example, a Greek entrepreneur who joined the SCP/RAC’s community of change makers and eco-innovators, called The Switchers, who proved to be a good source of NbS.

In its case, staramaki SCE exemplifies the opportunities and challenges of being an innovative circular entrepreneurship and [AP1] NbS.

Staramaki SCE is a civil-law cooperative based in the rural region of Kilkis in Central Macedonia (Greece) that utilizes the by-product of local wheat and rye cultivation to produce a viable eco-friendly alternative to single-use plastic straws and, at the same time, create employment opportunities for vulnerable population and promote social cohesion, as well as local and regional development.

With the support of SCP/RAC, staramaki (SCE) has recently undertakook the mounting tasks of self-assessing whether its operations qualify as NbS according to the IUCN Global Standard for NbS. The process was extremely informative and successful: it showed the potential of staramaki SCE as an NbS.

The innovative circular business model of staramaki SCE simultaneously:

• addresses economic and social development, by bringing growth and social value in rural areas of Greece, where a decade-long debt crisis and the COVID-19 pandemic have exacerbated the problems of unemployment, depopulation, and population aging;
• contributes to halt environmental degradation and biodiversity loss, both by providing a sustainable alternative to conventional plastic straws, thus contributing to the reduction of plastic pollution across Greece, and by addressing the compelling issue of land degradation and desertification in Kilkis area and other rural areas in Greece through the coordinated work with its suppliers and local Universities on regenerative agriculture.

In addition, staramaki indirectly addresses climate change mitigation and adaptation both by reducing the production and use of fossil fuel-based plastics, and by promoting less intensive agricultural practices, contributes to disaster risk reduction, food and water security by contributing to avoiding desertification.

The business model of staramaki SCE is circular by design and has been recently enhanced by two pilot projects that will reuse the coffee residues collected by InCommon AMKE from staramaki’s clients, by mixing them with the straw’s production waste to produce energy for internal use, and a fertiliser that will be applied by staramaki’s suppliers. The aim of this exchange is to engage the local society in waste reduction, and to change people’s mindsets about what is waste.

And yet, staramaki SCE is struggling to secure new investments to scale its operations and ensure its products become mainstream. Its legal structure and higher prices compared to over-sea competitors make it hard for Staramaki to attract both public and private investors.

To demonstrate impact as an NbS and attract new investments, staramaki SCE requires a wide diversity of expertise, capacities, and skills that are not easily available. In addition, as NbS is a new concept, capacity is also lacking on how to communicate with stakeholders at different levels about the benefits derived from this circular, integrated approach.

Businesses have the power to develop new business models that integrate the NbS concept, create a market for ecosystem services and goods, bring together stakeholders across their value chain, and easily attract investments that support nature and people. Conversely, NbS can greatly benefit businesses by providing both short- and long-term financial savings (mainly due to lower capital expenditures and greater savings in operations and maintenance), helping manage/anticipate regulatory requirements and risk, mitigating natural disaster risks, enhancing the engagement of community stakeholders, increasing marketing/branding, and promoting employee wellbeing.

However, if we want to see more innovative, circular for-profit NbS such as staramaki SCE thrive, a disruptive change in the economic system is needed, where ‘business as usual’ is no longer acceptable. Return on investments should no longer be valuated exclusively in financial terms, but in terms of public health, human well-being, social cohesion and inclusion, increased innovation and job creation.

As more companies share results and demonstrate return on investment through NbS, there will be greater motivation to adopt these practices throughout the private sector. In addition, private financial institutions might be incentivised to develop and adopt tools to measure and manage nature-based risk exposure, offer consumers nature-positive investment products^[2], and support the development of new NbS business models that can generate their own revenues, and/or consistently save costs over time.^[3]

While systemic changes are needed to increase private sector investment, this will take time and the public sector must continue to lead in the near term on NbS investment. In the short term, large scale public investment in NbS, complemented by private and community investment, is imperative to halt irreversible biodiversity loss and expand the market for NbS. Entrepreneurs and managers of innovative ventures such as Staramaki SCE need support, guidance, and resources to move forward and the public sector can put in place a policy and regulatory framework that supports revenue streams for assets, fostering private- and public-sector cooperation, providing appropriate risk allocation and mitigation, enabling the creation of a market and driving up investment returns. They can technically support the design, planning, implementation of NbS, as well as ensure the monitoring and evaluation of the impacts, particularly against human wellbeing and socio-economic targets. Finally, they can also help get the messages about NbS correct, and effectively reach out and engage concerned stakeholders at a broader scale.

Unfortunately, opportunities to boost investment in NbS in post-COVID recovery strategies are today clearly being lost. In addition, NbS are not considered in any detail in any of the key building blocks of the European Green Deal (namely, the EU Circular Economy Action Plan, Bioeconomy Strategy and Action Plan (2018), the Farm to Fork Strategy (2020) and the new Common Agricultural Policy), despite being relevant policy areas with much potential for synergies with NbS. 

The clock is ticking: policy makers, at all levels of government and across all fields of policy implementation, and stakeholders in business, society and the innovation ecosystem need to assume today the changes required to shift towards a Nature-based Economy.

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On Monday 17th, SCP/RAC organized a restitution workshop on “Building Nature-based Solutions (NbS) in the Mediterranean” to present a study that has been recently concluded and that was appointed by the MAVA Foundation. This assignment, gathered in a new report, aimed to identify Nature-based Solutions developed by MAVA with a two-fold objective:

• develop a set of recommendations and priority actions to ensure the identified NbS can effectively deliver the expected societal and environmental benefits amidst the COVID-19 pandemic,
• draw key recommendations for the scaling-up of these NbS to make them a central part of the policy and recovery agenda in the Mediterranean

 You can download the executive summary of the full report created under the assignment, coordinated by Alessandra Pomé, here. Please contact Lucille Guiheneuf by email to access the full version of the report: lucille.guiheneuf@scprac.org)

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