Corporate action and government policy are addressing the excessive amount of greenhouse gas emissions being released into the atmosphere and warming the planet. However, greenhouse gas emissions cannot be the sole focus of the environmental sustainability movement any longer. The World Economic Forum (WEF) ranked biodiversity loss and ecosystem collapse as one of the top five threats humanity will face in the next 10 years. It also found that $44 trillion of economic value generation (over half the world’s total GDP) is likely at risk as a result of the dependence of business on nature and its services – meaning the threat of biodiversity loss should be a big concern for the corporate world.
What is Biodiversity?
Biodiversity is the variety of life on Earth and the systems that support it, including the type of species, ecosystems, and genetic diversity within species. Biodiversity is essential for maintaining the health and resilience of natural systems and provides resources that businesses rely on to operate. It is crucial in supporting human well-being by providing essential services such as pollination, pest control, and water purification. There are typically considered to be three dimensions to biodiversity: ecosystems, species, and genetics.
- Ecosystems are interconnected biological communities such as forests, coral reefs, deserts, etc.
- Species are the different animals, plants, bacteria, and fungi that make up the living world.
- Genes refer to the diversity found within a genetic community of a single species.
What is Causing Biodiversity Loss and Why Should Businesses Care?
More than 90% of biodiversity loss is caused by five drivers: land degradation and habitat destruction, resource (over) exploitation, climate change, pollution, and invasive species. Current economic systems and business practices have contributed to the loss of biodiversity we are seeing today.
Unfortunately, biodiversity loss and resulting impact to business is on the rise, citing concerning statistics such as:
- Almost 70% of wildlife has been lost amid ever accelerating extinction rates
- Upwards of $20 trillion in economic damages occur from lost ecosystem services a year
- $53 trillion globally is at risk from further biodiversity losses
Business as usual is no longer a viable path forward.
What Global Policy Action Has Been Taken?
At the 15th meeting of the Conference of the Parties (COP15) to the UN Convention on Biological Diversity (CBD) in December 2022, a new global biodiversity framework was set out to halt biodiversity loss and move toward restoration. The goal for biodiversity is to sustainably manage nature’s contributions to people, enhance ecosystem functions and services, and restore those in decline, in support of sustainable development for present and future generations by 2050. By 2030, there is an interim goal to effectively conserve and manage at least 30% of the world’s lands, inland waters, coastal areas and oceans, with an emphasis on areas of high importance for biodiversity and ecosystem services.
How are Businesses Impacted by Biodiversity Initiatives?
Like carbon accounting, third party entities are creating frameworks and standardized processes to track, set goals, and reduce corporate contributions to biodiversity loss to support the goals that were agreed upon at COP15.
- The Science Based Targets Network (a coalition of many of the same organizations behind the SBTi) was formed to develop methods and resources for companies to use to set science-based targets for nature, alongside their emission reduction counterparts. Setting these goals in tandem ensures that nature-based solutions for climate change mitigation will result not only in carbon sequestration but also reverse nature loss, promoting adaptation and resilience of ecosystems.
- The Taskforce on Nature-related Financial Disclosures (TNFD) is a kind of ‘sister framework’ to the ubiquitous Taskforce on Climate-related Financial Disclosures (TCFD). Released in March 2022, the draft framework is designed to help companies assess the complex financial risks posed by nature destruction and biodiversity loss. Just as TCFD reporting and disclosures are becoming table stakes for large organizations, TNFD is expected to follow in its footsteps and be complementary to other initiatives designed to make our economy coexist with nature.
- The Biodiversity Disclosure Project has a protocol that provides guidance for companies on how to develop a biodiversity impact inventory, measure and account for the impact, and other best practices for verification, reporting, and disclosure. This protocol is designed to supplement other impact measurement tools and approaches to ensure that disclosures are comparable across industries and countries.
Want to learn more about how biodiversity is the future of ESG? Read more here
Biodiversity is essential to the sustainable future of our planet. To effect real change, businesses must stay on top of the upcoming frameworks to start tracking their ecological footprint, setting goals to reduce them, and taking action to restore biodiversity.