The EU Nature Restoration Law and what it means for business

On the 27th February 2024, the European Parliament officially approved the EU Nature Restoration Law. The law sets a target for the EU to restore at least 20% of its land and sea areas by 2030, with a commitment to restore all ecosystems in need by 2050.

Action to address EU nature loss is sorely needed. According to the European Environment Agency (EEA), over 80% of European habitats are in poor condition.

The Nature Restoration Law aims to contribute to:

1. recovering damaged nature across the EU’s land and sea areas;
2. achieving EU’s wider climate and biodiversity objectives; and
3. reaching the EU’s international commitments, in particular the UN Kunming-Montreal Global Biodiversity framework.

To reach the EU’s targets, member states are required to restore at least 30% of habitats covered by the new law. This means shifting their condition from poor to good by 2030 and increasing this to 60% by 2040, and 90% by 2050.

The Nature Restoration Law has been contested since its announcement, largely due to expectations on farmers. However, new amendments supporting the agriculture sector enabled its approval with 329 votes in favour, 275 against, and 24 abstentions.

The law states that priority should be given to Natura 2000 areas – these are protected areas covering the EU's most valuable and threatened species and habitats. It is the largest coordinated network of protected areas in the world.
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What does this mean for business?

i. Further impetus to improve nature reporting. This law is part of a series of EU-wide legislation that requires better understanding of nature. In addition to the CSRD (Corporate Sustainability Reporting Directive), EU member states have already begun to develop legislation that impacts business. For example, the French government requires all financial institutions to disclose biodiversity-related risks using the concept of double materiality.

ii. Integrating nature into business strategies. The EU Nature Restoration Law sends a clear signal to businesses regarding the direction of travel. Nature is rising up the agenda and businesses will increasingly face compliance as well as financial risks due to nature loss. On the flip side, there are valuable opportunities for early movers such as strengthening reputation (e.g. among consumers, investors, and partners) and driving innovation (in sectors such as biotechnology, renewable energy, and sustainable agriculture).

How can Fola help you?

1. Learning: We can support your businesses with capacity building to help you understand and articulate the role of nature in your business;
2. Analysis and Reporting: We can provide the support and insight that your business needs to navigate a complex reporting landscape;
3. Strategy Development: We can work with you to integrate nature into existing strategies in a way that aligns with a net zero world.