Biodiversity: growing focus for regulators and businesses
Biodiversity is a topic that we can expect to hear much more of in the year ahead.
Overshadowed by climate change, it is equally existential; without biodiversity, we are told, there is no future for humanity. As the UN’s new biodiversity chief has cautioned, “people’s lives depend on biodiversity in ways that are not always apparent or appreciated.” For instance, when insects die out, crops stop being pollinated and agricultural supply chains collapse.
This isn’t just a question for agricultural businesses though. Chemical companies, extractive industries, building and development players can all have huge impacts on biodiversity through run-off chemicals and habitat destruction and will be forced to engage with the knock-on effects they can have.
Recently highlighted at Davos this month as the third biggest risk as seen by global business leaders, this will likely be the year that we will see more regulatory and business action on biodiversity.
Momentum is building in the run up to the Convention on Biological Diversity in October, the once-in-a-decade event which will set a global biodiversity framework.
Likened to the Paris Agreement for Nature, it is expected to feature binding targets from Member States with the first draft released this month calling for a commitment to protect at least 30% of the world’s oceans and lands, to control invasive species and halve plastic pollution by 2030.
The UK government is looking to help lead the way – with a global Review of the Economics of Biodiversity, with findings due soon. Like the ground-breaking 2006 Stern Review on Climate Change, this seeks to assess the risks of global biodiversity loss and identify actions that will both enhance biodiversity and deliver economic prosperity. Legislation is already under way – the government has committed in the Environment Bill that new developments must actively improve local biodiversity
What does this mean for business?
In this climate, businesses are likely to face new regulations and growing activist pressure, along with more calls from investors to disclose how falling biodiversity could threaten their supply chain.
They will need to consider how to factor biodiversity risks and opportunities into business decision-making, including any new metrics and tools needed to measure this. One business acting on this is global luxury group Kering who are integrating biodiversity into their Environmental Profit & Loss (EP&L) accounting tool.
As we recommended in our recent supply chain report, businesses need to future-proof their business models, in anticipation of disruptions and growing resource pressures.
To ensure their supply chains to remain resilient, businesses may need to diversify the materials used and products offered – which can also become an opportunity for new product development.
For example WWF and Unilever brand Knorr have worked together to promote a ‘Future 50 Foods’ campaign – identifying a wider range of crops that will promote biodiversity in agriculture and create a more resilient food system, while also offering more nutritious alternatives.
We have already seen consumer appetite for more climate-friendly foods in the rapid growth of lower carbon meat alternatives, biodiversity-friendly foods could become the next frontier.