Why Biodiversity Is a Growing Concern for Businesses and Investors
In recent years, there has been growing concern about the extent of biodiversity loss and its impact on the planet. Scientists at Queen’s University Belfast recently conducted research that indicated the global extinction rate of animal species is worse than previously thought, with 48% of more than 71,000 species in decline and less than 3 percent on the rise. These figures, combined with the authoritative WWF 2022 Living Planet Report, showing 69% of global wildlife populations have plummeted since 1970, have made biodiversity a hot topic in corporate-level sustainability discussions.
As a result, businesses and investors are increasingly trying to limit their contribution to species loss and measure their biodiversity goals. However, there is currently no standard way for companies to do this. The Task Force on Nature Financial Information is creating guidelines for companies to report on biodiversity, with a framework for market adoption expected to be released in September. This framework will require companies to report on ecological risks that could affect their businesses.
More than 200 companies around the world have tested the task force initiative launched in July 2020. Separately, the Science Based Targets Network recently released tools and guidelines for companies to set nature-related targets, involving 17 companies following a process to set, implement and monitor progress on goals for freshwater, land, biodiversity, and oceans, as well as climate.
While businesses and investors are taking steps to understand and limit their contribution to species loss, scientists are calling for more political and corporate commitments to biodiversity. In this article, we will explore the growing concern about biodiversity loss, delve deeper into the topic, and provide unique insights and perspectives.
Corporate Sustainability and Biodiversity Loss
Businesses and investors are increasingly realising that their actions have a significant impact on the environment. Thinking sustainably is becoming essential for companies that aim to operate successfully and attract investors. In recent years, businesses and investors have been actively trying to measure and reduce their environmental impact, setting themselves environmental, social and governance (ESG) goals to demonstrate their commitment to sustainability.
However, in addition to climate change, biodiversity is another critical issue that businesses and investors need to consider. In a 2020 report, the World Economic Forum warned that biodiversity loss poses a significant risk to businesses, with the economic impact potentially reaching $479bn annually. Therefore, companies need to understand their impact on biodiversity, including the supply chains and land they use, as well as the products and services they provide.
Measuring Biodiversity Goals
Currently, there is no standard way for companies to measure their biodiversity goals, making it challenging to know whether companies are making real progress in protecting biodiversity. To address this issue, the Task Force on Nature Financial Information is developing guidelines for companies to report on biodiversity, which is expected to be released in September.
The guidelines will require companies to report on their ecological risks and the impact of their business on ecological resources. The task force also aims to create a common methodology for impact reporting, which will enable companies to compare their ecological impact and set sustainability targets.
Science-Based Targets
The Science-Based Targets Network recently launched tools and guidelines for companies to set nature-related targets. The initiative will help companies review their impact on the environment and identify the best ways for them to address biodiversity loss. By following this process, companies can set, implement and monitor progress on goals for freshwater, land, biodiversity, oceans and climate.
Although currently a pilot project, the initiative involves 17 companies that have committed to setting science-based targets and reporting on their environmental impact. These companies are following a process that takes into account the local context of each operation, the availability of data, and the existing biodiversity action plans.
Science and Biodiversity Loss
The growing concern about biodiversity loss is not only shared by businesses and investors, but also by scientists and policymakers. In a 2021 report, scientists argued that relying solely on the International Union for Conservation of Nature’s (IUCN) Red List conservation categories to measure the levels of extinction is not sufficient to show the continued progression of population declines across nature.
Instead, they suggest using a conventional red list category combined with population trend data to provide a better understanding of the decline in biodiversity. By doing so, they found that 48% of more than 71,000 species were in decline, demonstrating the severity of the issue.
Political and Corporate Commitments
Scientists and activists are calling on governments and companies to take urgent action to prevent biodiversity loss. The Covid-19 pandemic has highlighted the importance of biodiversity and the risks associated with its loss, such as the spread of zoonotic diseases. Therefore, policymakers and businesses must work together to take the necessary measures to protect the planet’s biodiversity.
To achieve this, the private sector should set science-based targets that align with the Paris Agreement and the Sustainable Development Goals. Governments must recognise and support the private sector’s efforts to protect biodiversity. Moreover, policymakers should implement policies that incentivise businesses to act sustainably. These policies could include taxes on carbon emissions, subsidies for green energy, and penalties for companies that pollute the environment.
Summary
Biodiversity loss has become a growing concern for businesses and investors in recent years, with the extinction rate of animal species worse than previously thought. As a result, companies are taking steps to limit their contribution to species loss, with more than 200 companies worldwide testing the Task Force on Nature Financial Information initiative. However, there is currently no standard way for companies to measure their biodiversity goals. Therefore, the task force is developing guidelines for companies to report on ecological risks. Meanwhile, the Science-Based Targets Network recently launched tools and guidelines for companies to set nature-related targets. Scientists are calling on governments and companies to take urgent action to prevent biodiversity loss and protect the planet. By working together, we can ensure the planet’s biodiversity is preserved for future generations.
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Biodiversity is growing on the corporate risk agenda at the same time as the last one research indicates that the global extinction rate of animal species is worse than previously thought.
Scientists at Queen’s University Belfast concluded in the most recent research that 48% of more than 71,000 species were in decline and 33% of species deemed “not threatened” by the International Union for Conservation of Nature were also in decline. Less than 3 percent were on the rise.
The researchers combined conventional red list categories with population trend data. Studies typically use the IUCN Red List conservation categories to compare levels of extinction, which show that 1% of animal species are extinct and 25% are threatened.
However, because extinctions begin with massive population declines, using the IUCN categories does not reveal the continued progress of population declines across nature, the researchers argued.
Daniel Pincheira-Donoso, co-author of the study, said the IUCN categories provided a snapshot of a point in time. “But it doesn’t tell you anything about the past or the future. The alternative measure we use gives you perspective over time,” he said.
The authoritative WWF 2022 Living Planet Report it also reported that global wildlife populations have plummeted 69% since 1970. Latin America and Africa have seen the sharpest declines, with decreases of 94% and 66%, respectively.
The evidence adds to growing concern about the extent of biodiversity loss, making it a hot topic in corporate-level sustainability discussions.
Businesses and investors are increasingly trying to understand and limit their contribution to species loss, driven in part by pressure to disclose their risks to climate and environmental damage.
While there is currently no standard way for companies to measure their biodiversity goals, the Task Force on Nature Financial Information is creating guidelines for companies to report on biodiversity.
The task force is expected to release a framework for market adoption in September, which will require companies to report on ecological risks that could affect their businesses.
More than 200 companies around the world have tested the task force initiative launched in July 2020.
Separately, the Science Based Targets Network, backed by an independent coalition that includes WWF and the United Nations, also recently released tools and guidelines for companies to set nature-related targets.
The pilot project of Science goals for nature involves 17 companies following a process to set, implement and monitor progress on goals for freshwater, land, biodiversity and oceans, as well as climate.
Some of the companies involved have faced extensive scrutiny on the effect of their activities on water resources and the ecology, such as Danone, Nestlé and cement group Holcim.
“The scientific community has been sending warnings for a while, and I feel like everyone is listening a little more,” said Pincheira-Donoso of Queens University. “But we need commitments from politicians and companies.”
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