Biodiversity is a building block for the natural system on which much of the world’s wealth depends directly or indirectly; yet too few in business realize the extent of the risks and potential rewards of managing their impact on this key nature-based asset.
A new publication from the United Nations Environment Programme (UNEP), previewed at B4E, the Business for Environment Global Summit, in Seoul on April 21, helps companies understand the challenges and opportunities by examining the impact of their sector and revealing what other companies are doing to manage biodiversity issues.
As such it is a new and additional insight into how the corporate sector can be part of the transition to a low-carbon, resource-efficient, 21st century Green Economy.
‘Are you a green leader? Business and biodiversity: Making the Case for a Lasting Solution’, prepared by UNEP’s Paris-based Division of Technology, Industry and Economics and its Cambridge-based World Conservation Monitoring Centre, looks at a broad spectrum of business, including mining, energy, agrifoods, fisheries and aquaculture, construction, forestry, tourism, pharmaceuticals, cosmetics, fashion and finance.
Many sectors rely on raw materials such as timber, fish, cotton, crops and clean water, or work with supplies and suppliers throughout the life cycle of production processes. But many do not realize how threatened those supplies are, and fail to include this in their calculations and business plans.
For instance:
- Biodiversity is disappearing at up to 1,000 times the natural rate, and ecosystems are functioning less and less effectively.
- The economic loss of biodiversity loss and ecosystem degradation to the world economy is estimated to be $US2-4.5 trillion.
- About 60 per cent of ecosystems have been degraded or used unsustainably, including provisioning (food and fibre) and regulating services (climate, flood, water purification).
- Around 50 countries face moderate or severe water stress
- By 2030, it is thought that water scarcity could cut agricultural harvests by 30 per cent.
- In Indonesia, coffee yields have dropped by 18 per cent in some areas because of falling pollination rates.
- The cost of environmental degradation related to water loss in the Middle East and North Africa is estimated at $US9 billion a year.
The way your company manages and acts on biodiversity can affect:
- Supply of Resources – Natural resources form the basis of a range of commercial products including food, paper, textiles, colorants, fabrics etc., and the services provided by ecosystems, such as water and nutrient cycling, are essential to many production and processing operations. The continued supply of these products and services depends not only on sustainable use of species or utilized ecosystem services, but the careful management of the entire ecosystems upon which they depend.
- Access to Markets – Increasingly, consumers are showing preferences for products created using sustainably and ethically sourced materials and methods. The demand for environmentally-friendly paper now means that 5% of the world’s productive forests are covered by the FSC scheme, with an estimated value of US$20 billion.
- Brand and Reputation – The information age is allowing consumers around the globe to be informed of the activities of companies in the remotest of areas. Bad publicity can shake shareholder’s confidence and affect profitability.
- Licence to Operate – Access to land and other resources are increasingly affected by a company’s environmental track record. By adopting best practices on biodiversity and environmental and social issues a company is more likely to obtain and maintain a legal licence to operate.
- Access to Finance – Financial institutions, in line with the Equator Principles and other directives, are making more demands on businesses to operate within suitable guidelines to minimize their impact on the environment, including preventing biodiversity loss.
“The message is simple,” said Achim Steiner, United Nations Under-Secretary-General and Executive Director of UNEP. “Most, if not all, businesses rely directly or indirectly on natural or nature-based assets, many of which are becoming increasingly scarce as a result of mismanagement and a lack of investment and re-investment. This translates into a business risk, but also a business opportunity.”
“Indeed how a company translates the value of biodiversity and ecosystem services – such as those from forests and soils to freshwaters and the atmosphere – into their business strategies will increasingly define the bottom line in terms of profit and loss and sales to a new generation of more aware and demanding consumers,” he added.
Are you a Green Leader?, the executive summary of which was released on April 21, helps companies to begin this transition by helping them assess their risk. It outlines the business case that a failure to address biodiversity issues could affect supply of resources, access to markets, brand and reputation, license to operate and access to finance. In addition, companies could face a consumer backlash, as more and more customers are demanded sustainably produced products and services.
The full-length publication of Are you a Green Leader? will be launched at the first Global Business of Biodiversity Symposium in London in July. The executive summary is available for downloading at http://www.unep.fr/scp/business/
