STORY INLINE POST
Climate change is among the most important challenges in human history, but rest assured, it’s not the only one we need to solve quickly.
For far too long we’ve focused on climate change as the center of our policies, strategies, and plans. This makes some sense since using tons of carbon dioxide equivalent serves as a practical metric to estimate, and thus, to use as a good point of comparison between the same entity, product, service, or individual in two or more different time frames or between two or more alternatives. Also, because of the use of this metric, we tend to consider everything that is not “carbon” as a co-benefit (for example, reducing non-GHG emissions, improving land quality, conserving water, protecting or enhancing natural resources, among others.) when, in reality, those additional benefits should be at the center of some of our assessments to ensure there is a future worth living for us and for future generations.
While we mostly focus on the climate crisis, we often forget that the biodiversity issue is equally serious and that both are interdependent, amplifying the effect that one has over the other. But to fully comprehend the situation, we first need to understand that biodiversity is not only what we can see, such as animals, plants, and ecosystems, but also what we cannot see but is pretty much all around us, such as microorganisms, chromosomes, genes, and DNA. Equally important, biodiversity also refers to the relationship between all the groups mentioned above and their interactions, which means a broad range of environmental services for all living things, like water filtering, air purification, soil protection and food production, among many others.
Besides the fact that we cannot live on a depleted planet, pointing to the obvious, neither can any business thrive. Although it is very difficult to express in financial terms, some estimates indicate that around half of global GDP depends on biodiversity and the services ecosystems provide. Therefore, businesses should be taking both their dependence on nature and the impacts of their activities on their surroundings more seriously and be wary of their growth projections as they may be about to face a far more challenging reality than their current evaluations allow them to see. Just to list a few examples, as environmental services decline, either in quantity or quality, companies’ expenditures may increase in line with the need for more inputs to produce the same output, their operations or those of their suppliers may be more exposed to physical risks, which may produce a shortage in their supply chains, and their ability to operate in certain places may be reduced or even need to migrate to more distant locations (so long nearshoring).
Aware of the challenges global biodiversity is facing, the Convention on Global Biodiversity was established in 1992. The objectives of the convention are to conserve biological diversity, the sustainable use of its components, and the equitable distribution of the benefits produced by the use of genetic resources. Just last year, this same convention and during the 15th Convention of the Parties, adopted the Kunming-Montreal Global Biodiversity Framework, encompassing four goals for 2050 as well as 20-plus targets for 2030 with the ultimate objective to lead governments to action that results in halting and reversing biodiversity loss. Another key objective is the mobilization of public and private funding for biodiversity activities totaling a minimum of US$200 billion per year by 2030.
While global agreements like those indicated above are moving ahead, leading businesses need to set an example by acting quickly and in a coordinated manner. Fortunately, there are different private sector initiatives at different levels of maturity that serve as a toolkit to drive awareness and action. For example, in mid-2020 the Taskforce on Nature-related Financial Disclosures (TNFD) was announced, producing since then a robust framework for all sorts of businesses to assess and manage their dependencies, impacts, risks and opportunities linked to biodiversity. Through the 14 recommendations included (so far) in the TNFD framework, companies can be better equipped to talk about their governance, strategy, metrics and targets and risks and impacts management.
As a complementary tool, the Science-Based Targets for Nature (SBTN) provides a stepwise process for companies to first get ready to set measurable, actionable, time-bound, and science-based nature-related targets, and then to act (through avoidance, reduction, restoration, regeneration, and transformation), to monitor and to report progress. The SBTN allows the audience to address issues linked to freshwater, biodiversity, land, and oceans, complementing the work previously conducted by the Science-Based Targets initiative (SBTi) on corporate climate targets.
Additionally, there are several other initiatives developed to enable corporate action and to catalyze and scale up investment in projects that foster positive impacts on nature, like the Partnership for Biodiversity Accounting Financials (PBAF) and the Natural Capital Protocol.
In practical terms, there are two fundamental questions every company should be able to respond to in order to efficiently embark on the biodiversity journey: 1. What are the impacts of my business activities on biodiversity? 2. What risks is my business exposed to from changes in ecosystems?
Although in such a complex matter like this there is no one size fits all, there are four steps that you can use to define a biodiversity strategy and subsequent plans. First, start with the assessment, which means understanding your companies’ impacts and dependencies on nature. Then strategize, which will require you to define a biodiversity ambition, a roadmap to address risks and opportunities, and more specific targets. Third, transform through the implementation of the roadmap to manage impacts and dependencies. Finally, implement finance restoration, conservation, and transformation initiatives in your own operations and in the rest of your value chain.
As previously mentioned, climate change and biodiversity are closely interrelated and, if managed correctly by an organization, there are powerful synergies waiting to be found. For example, investing in the so-called Nature-Based Solutions (NBS) in the surroundings of the company’s operations, which include the conservation and restoration of natural carbon sinks, would result in a positive influence on the reduction of the stress on the watershed, an improvement of air quality, an increase in the defenses against unexpected natural events, and possibly others for the economy and health of the local community.
All things considered, biodiversity should no longer remain courtside but, rather, be placed at the core of a business’ strategy, especially now that companies can no longer afford the luxury of ignoring their relationship with nature.They also should act quickly, as if the bottom line of the company depended on it, because in the end, it does.