Blog
The End of Business as Usual?
Posted 3rd December 2022
By our guest blogger: Pakhi Das
Abstract
Biodiversity and ecosystem services form the foundation of global economies and underpin all economic activities and human well-being. With almost 40% of the global economy derived from the direct use of biodiversity, more than 50% of the world’s GDP is moderate to heavily dependent on nature and its services (World Economic Forum, 2020). All commercial and industrial enterprises rely on using or having access to natural resources of one type or another. It is, therefore in their best interest to ensure that the supply of those resources is not interrupted, diminished or lost forever. Business impacts and dependencies on biodiversity and ecosystems translate into risks to or from:
- > operational activities and performance,
- > liabilities,
- > new or tightening legislation or regulations,
- > reputational, and
- > market and financial risks (Bullock, et al, 2020).
It is crucial that businesses acknowledge their dependence on nature and adopt methods to measure the dependencies and impacts on biodiversity in order to manage and prevent biodiversity-related risks while harnessing new business opportunities.
The latest Living Planet Report published by WWF in October 2022 has reminded us again of the severity of this issue. While biodiversity loss was a phenomenon that many of us knew was occurring, the rate of which it has occurred is startling. As per the report, the relative abundance of monitored wildlife species worldwide has declined by an average of 69% in the last five decades (WWF, 2022). There is sufficient evidence suggesting that such a colossal decline in biodiversity will cause natural disasters in the future. From exacerbated climate change that threatens food security to increased risks to human health – such unprecedented biodiversity loss will not only endanger the cultural fabric and livelihoods of many rural and indigenous communities but have significant impacts on the global economy. The COVID-19 pandemic was one example (or warning) of how the disrupted relationship between people and nature can bring our livelihoods and communities to a standstill. While there have been increased efforts from various sections of society to ensure this relationship improves in the future, there is much scope from the business and industrial fraternity to do more.
Why businesses?
Because biodiversity impacts businesses as much as businesses impact biodiversity. Not adopting practices that mainstream biodiversity conservation can result in direct economic losses and financial risks to businesses. Only a few years from now, businesses will need to reinvent sources, productions, and their entire value chains. However, finances and economics aside, the health and well-being of society greatly depend on the activities of each of its stakeholders. Businesses make up a rather large section of this society. Over the past few decades, the actions and activities supporting industrial growth have also caused widespread destruction to ecosystems and critical habitats supporting species of high conservation interest. There is adequate evidence to confirm that globally, business activities have been responsible for driving changes to land and sea use, causing direct overexploitation of natural resources for actions that lead to pollution and contamination of those very resources. However, what is different from the past few years is that now there are well-researched, tried, and tested methods that can enable businesses to move the needle and reverse the impacts of biodiversity loss. The world has moved in the direction of conservation groups and business groups interacting more closely than ever. The goal is thus to continue to work collaboratively and adopt strategies with conservation and economic growth at the same level of priorities.
The Global Biodiversity Framework (GBF)
The Post 2020 – Global Biodiversity Framework (GBF), which is currently being negotiated under the United Nations Convention on Biological Diversity (CBD), aims to mobilize international, regional, national, and sub-national policy responses worldwide to protect biodiversity. While the framework has always included multiple targets for urgent action to address biodiversity loss, this version of the framework aims to set in motion an economic transition with a special focus on the role of businesses in the implementation of the GBF, which would put biodiversity on a path to recovery in the next decade. Unlike many in the past, the current framework recognizes that businesses have the autonomy and the technology which, when combined with the resources that financial institutions have, would enhance their ability to innovate and make the needed shifts towards increased investment in nature-based solutions. Further, the draft GBF also understands that given the big impact businesses have on biodiversity and ecosystems, any actions undertaken by them to change the current trajectory of nature loss and damage within the decade will help slow down and potentially also halt biodiversity loss.
With future frameworks including the GBF and Taskforce for Nature and Financial-related Disclosures (TNFD) it is expected that businesses will start identifying, assessing, mitigating, and disclosing nature-related risks from operations to avoid severe consequences on biodiversity and further recognize biodiversity risks to operations, reputations, and returns. Business decision-making must mainstream biodiversity and ecosystems in value chains and align with biodiversity goals proactively, as “Damage to nature from economic activity can no longer be considered an ‘externality’” (Dominic Waughray, 2020). Qualified and experienced individuals or entities such as academics, NGOs, and environmental consultancies that specialize in the fields of biodiversity, ecology, and sustainability will work collaboratively to help businesses establish or adopt new matrices to include the cost of ecosystems and adopt mechanisms for effective assessment and reporting on global biodiversity impacts. More ways for businesses to support the implementation of the GBF discussed during the pre-COP15 meetings included:
- providing support for scientific research and conservation initiatives/programs.
- developing, and promoting initiatives that foster healthy relationships with local communities.
- engaging and advocating for effective national policy frameworks in line with global standards; and, most importantly,
- creating spaces for open discussions and multistakeholder group engagements.
Until now, conservation groups and certain government bodies have driven the process of protecting nature and biodiversity, habitats, and the Earth’s climate; now, it is time for businesses to step up and deliver on sustainable actions, which ultimately is in their own economic and operational interest.
With new frameworks such as the upcoming European Union Corporate Sustainability Reporting Directive (CSRD), it is only a matter of time before the need for businesses to drive sustainability and protect and enhance biodiversity will become legal requirements[1]. Naturally, these prospects may be overwhelming to some business entities, as it is sometimes unclear where to begin and what methodologies to apply. In instances like these, organizations such as International Biodiversity Consultants (IBC) can guide and assist businesses in aligning their activities with the new requirements.
About the Author
Pakhi Das BMS/B.COM, MSC
Pakhi is a wildlife conservation researcher and project manager based near Mumbai, India. She has experience in managing several complex projects ranging from species-specific projects such as snow leopard conservation in the Himalayas and tiger radio telemetry in the Bay of Bengal to more diverse, community-oriented projects including community conservation and human-wildlife conflict mitigation in India’s priority landscapes. With a Master degree in Sustainability and Environmental Studies from the University of Strathclyde and a Bachelor degree in Environmental Management and Economics, Pakhi has worked with organisations such as WWF India, Technology for Wildlife and Network for Conserving Central India.
Currently, she is leading the research on the legal frameworks, environmental safeguards, and realities on the ground in Nepal, the Democratic Republic of the Congo and Vietnam to identify threats and opportunities for safeguarding biodiversity from linear infrastructure development at various levers of influence, across scales and countries, to ensure biodiversity, climate resilience, and balanced development. Pakhi also leads partnerships for the Global Youth Biodiversity Network – India chapter on a voluntary basis and is currently involved in the CBD post-2020 targets youth representation and National Biodiversity Strategic Action Planning.
References
Bullock, C., Delargy, O., O’Cinnéide, M., Krisht, S., Aquillina, M., Russ, C., and Rowcroft, P. (2020). Review of options to enhance business contribution to Ireland’s national biodiversity objectives. Report to the National Parks and Wildlife Service (NPWS), Department of Housing, Local Government and Heritage (DHLGH), Government of Ireland. Accessed at: https://www.npws.ie/sites/default/files/publications/pdf/A-Review-of-Options-to-Enhance-Business-Contribution-to-Irelan%27s-National-Biodiversity-Objectives.pdf
Waughray, D. (2020) Half of the World’s GDP is moderately or highly dependent on nature. WEF News Releases, World Economic Forum. Accessed at: https://www.weforum.org/press/2020/01/half-of-world-s-gdp-moderately-or-highly-dependent-on-nature-says-new-report
World Economic Forum(2020) Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy, World Economic Forum In collaboration with PwC. Accessed at: https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdf
WWF (2022) Living Planet Report 2022 – Building a nature-positive society. Almond, R.E.A., Grooten, M., Juffe Bignoli, D. & Petersen, T. (Eds). WWF, Gland, Switzerland. Accessed at: https://www.wwf.org.uk/sites/default/files/2022-10/lpr_2022_full_report.pdf
Footnotes
[1] The proposal for the CSRD was adopted on 21 April 2021. It will amend existing reporting requirements defined within the Non-Financial Reporting Directive 2014/95/EU. See https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en (Accessed on 06 November, 2022).