Driving sustainable growth: How African companies are increasingly valuing the importance of a nature strategy

While embedding nature into business strategies is not yet fully commonplace in Africa, there are clear signs that things are starting to change, as businesses begin to acknowledge the true significance of nature to so much of what they do.

Here, the Sustainable Finance Coalition, an NGO that finds, designs and mobilizes tailormade finance solutions for nature and the GSMA, a trade association that represents the interests of mobile network operators worldwide – consider why the landscape is changing, and why the risks and opportunities associated with nature loss are making it onto the corporate agenda.

Earlier this year, Business for Nature surveyed a small sample of African businesses about where decision making for nature sat within their organizations. Detailed in the It’s Now for Nature Pulse, the results showed that despite challenges such as data availability and a lack of investment slowing down action, a quarter of respondents have set nature-specific targets, and almost 40% are in the process of doing so.

In the vast majority of cases, actions to mitigate impacts on nature are led by materiality assessments, with the key drivers for nature action including exploring new market opportunities, managing physical risks and addressing customer and investor needs.

Business for Nature is working with a range of partners across Africa to help organizations develop strategies and plans for nature that can help them turn nature loss from a business risk into a source of long-term resilience. “We want to encourage companies to take action for nature, but not just as a one-off project, but by making it a central part of their business strategy. This is what a nature strategy is,” explains Sooto Ajayi, Africa Lead at Business for Nature.

“A nature-positive economy requires that economic activities lead to the protection, restoration and sustainable use of nature, and this should be done in a systematic way – through national policies but also corporate strategies. In Africa, we are losing over $195 billion of natural capital every year. The key to economic and social development will require environmental wellbeing as well.”

Central to this change is raising awareness of the high-level business actions on nature (ACT-D), which have been developed by a raft of leading global business organizations including the World Economic Forum and Capitals Coalition, as well as Business for Nature.

ACT-D (Assess, Commit, Transform, Disclose) lays out the formula for a business to develop its own nature strategy by first assessing how dependent it is on nature and the impacts, risks, and opportunities involved. This action is then backed up with science-based commitments, followed by moves to transform the business to meet these targets. The final step is disclosure and publicly disclosing nature-related performance.

The integral role that nature plays in the day-to-day business of so many organizations is starting to resonate with African companies, says Justin Smith, Chief Strategy Officer at the Sustainable Finance Coalition, which supports partners in finding and implementing finance solutions for key landscapes and seascapes across Africa.

“There’s a growing recognition of the massive dependency that most companies have on nature,” he explains, “as well as the impacts that they’re having, often through their value chain.”

Smith is seeing greater realization among companies of the risks that are involved if natural ecosystems do collapse. And it’s not just businesses in sectors such as forestry and agriculture that are starting to take notice, with banking, insurance and asset management sectors all starting to carry out nature risks assessments on the companies they are investing in. “They are starting to integrate nature into their decision making,” he says. “I think there’s a shift, with companies looking at stronger integration of nature into risk processes and taking a deeper look at the opportunities around both the blue and green economy. It is more of a strategic approach… change is happening.” 

Smith is also seeing increased local leadership from companies across Africa who understand the realities of ecosystem collapse and what’s necessary for them to keep operating sustainably into the future  

Some are starting to recognize and address their impacts nature and biodiversity. This includes the global paper and pulp business, SAPPI headquartered in South Africa, which has embraced ACT-D and committed to zero deforestation across its supply chains, as well as investing in research around trees that are more resistant to pests and drought. 

Companies are not only beginning to clarify what is material to them, such as water use, land degradation, food security and air pollution, but they are taking action. “Companies are waking up to the issues and the impacts,” he says.  

“They are beginning to see addressing nature risks not just as a cost, but as a source of innovation and opportunity. By addressing challenges like resource use or ecosystem health, businesses are building trust with communities and regulators, which strengthens their license to operate while also discovering new revenue streams through innovative products and services.” 

For example, Kenyan technology company Safaricom, a member of the GSMA, uses materiality assessments to highlight key environmental topics for the businesses, which include support for the circular economy, tree growing and biodiversity conservation and restoration.  

This has seen the company start to explore shared value partnerships around technology and nature, as well as conduct biodiversity impact assessments for both its direct and upstream activities. They have also worked with a range of community groups aiming to plant five million trees by the end of 2030, helping to conserve 5,000 hectares of public forests. 

A persistent challenge for many businesses is a lack of solid data around their impacts on nature. Part of the issue, says Smith, is identifying which aspect of nature is most material for a business and identifying which nature metrics should apply. When it comes to climate, the metric, measuring carbon emissions, is constant.  

“This means that trying to address very specific context across multiple different sites, facilities, operations and value chains can initially feel a little overwhelming,” he explains. 

Alfred Osiko, director for market engagement for the climate tech and digital utilities program at GSMA acknowledges that data and technology gaps remain a hurdle, but he notes that these are shared challenges, not insurmountable ones. “This is why collaborations are so important. To address this challenge, the GSMA is working with partners across low- and middle-income countries to address it.  

In Tanzania, for instance, a collaboration between the environmental foundation TakaNiAjira and Vodacom is using digital platforms to improve waste management, while also helping to organise informal waste pickers, improving their pay and access to micro-products such as health insurance and loans. 

In Kenya, a collaboration between Safaricom and Vodafone is delivering M-Twiga, an alert and deterrent system that is preventing human-wildlife conflict. 

GSMA’s ClimateTech and Digital Utilities programs have also been working with businesses to help identify materiality aligned to nature and support the scaling of solutions with a commercial value proposition and positive impacts on nature. “Once companies conduct a materiality assessment, they see clearly where the risks and missed opportunities are. That clarity empowers them to act and to spot new ways to create value through digital solutions,” he says. 

Building on this, Sooto points out that a nature strategy doesn’t need to be created as a standalone document as its key elements may already exist within the business, in the form of a sustainability strategy, biodiversity roadmap or an ESG report. “Lots of companies are doing great things around nature already,” she says, “and it’s often just a case of pulling existing documents together.”  

In our second feature on nature strategies in Africa, we’ll explore how green finance and new partnerships are boosting commitments to nature in the region.