Biodiversity Risks and Opportunities: Corporate Sector Approaches

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It is hard to directly connect biodiversity to most businesses. A company’s impact on biodiversity is often less direct and not so easily measurable (though a number of organizations are working on this) than, for example, its carbon emissions or water use.

According to the “Summary for Policy Makers,” that preceded the publication of the Global Assessment Report on Biodiversity and Ecosystem Services, the biggest causes of biodiversity loss are: land conversion (including deforestation); direct exploitation of organisms e.g. through overfishing, hunting, and poaching; climate change; pollution and invasive alien species.

SustainAbility conducted a brief analysis focusing on five sectors, to identify the risks that declining biodiversity poses to these sectors and what companies can do to address biodiversity. This is not exhaustive but is meant to represent some of those most potent risks and opportunities unique to each sector. For example, in all sectors the physical presence of corporate offices, manufacturing plants, data centers, fleets, etc. can affect biodiversity in the areas where a company operates; however, this is applicable to any business in any sector so is not a focus here. We give examples of companies in each sector that have a goal or initiative supporting biodiversity and hope these analyses and examples help make the connection to biodiversity more concrete for sustainability practitioners across these sectors.

Technology

Biodiverse environments are more resilient to natural disasters (such as flooding) and reduce risk to the critical infrastructure on which the technology sector is highly dependent (data centers, telecommunication infrastructure and sensitive manufacturing facilities like fabrication plants).

Conservation software can be used to track vulnerable species, land change over time, incidences of poaching in order to pinpoint causes and drivers of change, and ultimately equip organizations with the information needed to prevent further biodiversity loss. Software solutions for precision agriculture can enable regenerative approaches that lead to healthier soils, higher biodiversity and ultimately more resilient farmland. Microsoft’s AI for Earth program awards grants to organizations to use artificial intelligence to solve critical environmental challenges, of which one of the focus areas is biodiversity loss.

Hardware companies also have an important role to play in conservation technology, through the production of satellites, drones, smart sensors, LIDAR (light detection and ranging), and connected camera and video equipment, not to mention the storage and processing devices needed to house and analyze footage and data.

Commitments to responsible sourcing and more circular product design can ensure reduced impact on biodiversity caused by natural resource extraction and mining. Apple’s commitment to move to a closed loop manufacturing system that essentially eliminates the need to mine virgin materials will, if successful, prevent the habitat destruction associated with mining virgin materials.

Responsible electronics take-back and recycling programs are important to prevent the physical and chemical pollution caused by the improper disposal of e-waste. Best Buy recently met its 2020 goal to collect two billion pounds of electronics and appliances for recycling. The company has sophisticated take-back, recycling and refurbishment programs for used electronics. Though the company does not directly relate this goal to biodiversity outcomes in its communications, these initiatives tie directly to reducing the physical and chemical pollution caused by e-waste which negatively impacts biodiversity on land and in waterways.

Energy

Similar to the risks to the technology sector, energy companies rely on a unique network of infrastructure, and biodiverse environments are more resilient to natural disasters (such as flooding), reducing the risk to essential energy services.

Preventing the physical harm caused by infrastructure such as wind turbines, dams used for hydroelectric power, etc. can protect species and their habitats. U.S. utility Pacific Gas & Electric (PG&E) supports biodiversity through numerous initiatives ranging from a comprehensive Aviation Protection Plan that includes retrofitting to “bird-safe” power poles, to implementing Safe Harbor Agreements with the US Fish and Wildlife Service at select locations to enhance habitat for endangered species, to Habitat Conservation Plans in the sensitive habitats in which it operates. Ørsted, an energy company in Denmark adopted an offshore wind and biodiversity policy in 2018 and are also funding research on how gulls interact with wind farms.

Land conservation and fire management practices by utility companies can protect important habitats and reduce potential damage (to both species and habitats) from future fire events. Addressing the issue of unlined coal ash ponds, and the unsafe levels of pollution they leak into groundwater sources, can prevent a potent form of water pollution.

Land conservation and reducing the impact of extraction on land surfaces, freshwater sources, and oceans can help protect important habitats. As part of the act4nature initiative, Total has made numerous commitments in support of biodiversity including: developing biodiversity action plans for all sensitive protected areas where it operates production sites; partnering to develop tools and methods for analyzing and modeling biodiversity data; a commitment by the Total Foundation to create a program for preserving mangroves, forests and wetlands; increasing employee awareness of biodiversity issues.

Shell works to prevent biodiversity impacts in current and future projects by creating biodiversity action plans when operating in critical habitats (i.e. rich in biodiversity) and also restores habitats impacted by past projects.

Aggressive spill prevention measures on land and in the ocean can minimize pollution and the harm it causes to affected species. The restoration of closed sites to previous or higher levels of habitat health and biodiversity can reinstate biodiversity in areas where it has declined due to mining activities.

Food, beverage and agriculture

Soil health degradation due to low levels of biodiversity within the soil and low soil organic matter leads to lower yields, increased erosion, greater need for fertilizers, etc. Pollinator population declines threaten the agricultural commodities that depend on them. Disappearing biodiversity in species-rich biomes like rainforests and parts of the ocean could mean loss of potential ingredients and nutrition sources.

Preserving and rebuilding soil health and promoting regenerative agriculture practices can preserve above-ground and soil biodiversity. General Mills has a goal to “advance regenerative agriculture practices on 1 million acres of farmland by 2030.” General Mills is working directly with ranchers and farmers in its supply base and is focused on driving three main outcomes: increased soil health, greater biodiversity, and economic resilience in farming communities.

Promoting dietary diversity and decreasing reliance on corn, soy and wheat to drive more diversity in agriculture and allow for a transition to regenerative farming practices. Knorr has partnered with WWF to publish the Future 50 Foods report that highlights a diverse list of plant-based foods and hopes to raise awareness and consumption of these foods. The report and Knorr’s continued integration of these ingredients in its products are intended to increase dietary diversity and the diversity of our global agricultural systems.

Responsibly sourced seafood and aquaculture is important for preserving marine life biodiversity.  Taking care to prevent the transport of invasive species with agricultural shipments is important for protecting the distinct biomes around the world and species that can be endangered by invasive species.

Ensuring that no sourced ingredients come from regions where deforestation occurs as a result of that ingredient.In addition to commitments around stopping deforestation, improving soil health, improving water quality, and protecting oceans, Nestlé recognizes that biodiversity impacts are hard to measure, so it has partnered with NGOs, governments and international organizations to work toward a consistent methodology for measuring biodiversity impacts. Progress on this methodology has been shared publicly.

Life sciences and pharmaceuticals sector

Similar to the risks to the food sector, declining biodiversity in species-rich biomes like rainforests and parts of the ocean could mean loss of potential drug ingredients and, ultimately, cures.

Ensuring that no overexploitation of natural resources or deforestation is caused by a company’s ingredient sourcing is important for protecting biodiversity in sourcing regions. Novartis worked with Natural Capital Protocol to assign monetary value to estimated environmental externalities and, as part of this exercise, quantified the environmental benefits of its forest carbon sink projects, which were found to have had a net positive effect due to increased biodiversity and watershed protection.

Among other initiatives, Bayer, uniquely positioned in both the agriculture and pharmaceutical sectors, established the Bayer Bee Care Program to investigate the factors negatively affecting bee health such as diseases and parasites. Bayer has already developed a solution to combat one of the most devastating of these parasites (the Varroa Mite) and has committed to training beekeepers on its use, collaborating with beekeeper associations, and monitoring the effectiveness of the product.

Preventing pharmaceuticals in the environment (PIE) through proper wastewater treatment at drug manufacturing facilities and educating consumers on the issue can help decrease the negative impact this has on species diversity in affected areas. Johnson & Johnson has committed to reducing or eliminating any active pharmaceutical ingredients from being discharged in the wastewater from its manufacturing sites, even where no regulatory limits exist, and uses a range of advanced technologies to remove active pharmaceutical ingredients from the wastewater. J&J aims to source from suppliers who employ similar practices.

Finance Sector

Loss of biodiversity has potential negative impacts on many sectors, making the financial institutions and insurers vulnerable to higher investment risk and insurance risk.

The protection of certain habitats, like mangroves and wetlands, can reduce insurance and investment risks in areas affected by natural disasters because these habitats protect biodiversity while also preventing the infrastructure damage that can be caused by severe storms and sea level rise if these important habitats aren’t preserved.

Insurance and reinsurance firm AXA XL partners with the Bermuda Institute of Ocean Sciences on its Ocean Risk Initiative sponsoring research on indicators of change in our oceans, including coral reefs and sea ice loss, habitats for which dramatic change has the potential to lead to even more severe species loss than has already occurred. The organizations also partnered to host the first Ocean Risk Summit in 2018, which explored topics such as overfishing, pollution, and coastal flooding.

Moving investments out of anything connected to deforestation will incentivize companies to ensure sourced ingredients do not contribute to deforestation.

Including biodiversity impacts in asset management decisions will incentivize companies to manage their impact on this issue. For certain industries that have particular ESG challenges, such as the wood pulp and palm oil industries, BNP Paribas has created policies that must be adhered to when making financing and investment decisions.

Supporting green bonds for projects that address biodiversity or its drivers can support companies looking to drive impact.

About the author

Sarah Hansen
Sarah Hansen

Sarah is a manager based in SustainAbility’s Berkeley office. She advises clients on a range of strategic projects ranging from materiality, to strategy, goal-setting and stakeholder engagement. She leads SustainAbility’s food sector work but works with clients in the finance, technology, energy and pharmaceutical sectors as well.

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