The Nature and Biodiversity Playbook for Business

Biodiversity: A Corporate Imperative

Biodiversity is a word that is being heard with increasing frequency in corporate boardrooms as business leaders come face-to-face with their responsibility to stem the escalating effects of nature degradation and to just as aggressively pursue the substantial business upside that can be achieved in the process.

The Sustainable Development Goals (SDGs)

In fact, 2023 may be remembered as the year that Nature Positive joined Net Zero as a corporate imperative. The UN-brokered Global Biodiversity Framework (GBF), which some call the “Paris climate accords for nature,” was adopted late last December, days after the European Parliament reached a preliminary deal with EU governments on a first-of-its-kind deforestation-free regulation for supply chains of cocoa, coffee, soy, wood products, palm oil, rubber, and cattle.

Regulatory Requirements and Reporting

Those were two major steps in a rapid succession of new reporting and regulatory requirements aimed at reversing losses in nature’s level of diversity in species, plants, and ecosystems. In January, the Global Reporting Initiative (GRI) started work to update its biodiversity standard. In March the UN High Seas Treaty was finalized. In May, the Science-based Targets Network (SBTN) launched the first corporate standards for freshwater and land, with 17 multinationals committing to pilot the target validation process. And in the remaining months of 2023, the International Sustainability Standards Board (ISSB) will do further work on biodiversity requirements, and the Taskforce on Nature-related Financial Disclosures (TNFD) is expected to finalize its framework. Meanwhile, regulations are on the agenda everywhere, from Australia to Canada to Costa Rica to Singapore.

Investor and Consumer Pressure

Indeed, biodiversity pressures are quickly reaching a tipping point. Investors are looking to ensure their holdings are addressing nature risks; the Finance for Biodiversity Pledge now has 140 signatories. In addition to investors, banks such as HSBC and BNP Paribas have developed biodiversity lending and investment products. And business alliances such as World Business Council for Sustainable Development and organizations such as the World Economic Forum, which engaged on climate, now are also embracing biodiversity.

At the same time, a growing segment of consumers, especially in iconic industries like food, fashion, and beauty, is rewarding businesses that invest in biodiversity efforts—and rejecting companies that don’t. More and more products bear messaging designed to appeal to consumer concerns for nature. Consider these words used on the Natura beauty website: “thanks to Natura [EKOS] products and the work of these [Brazilian farming] communities, 1.8 million hectares of forest have been conserved for sustainable resource use and a better future for generations to come.” When one European dairy business appealed to customers with such biodiversity-oriented messaging, engagement rose by 20%.

Climate Change and Biodiversity

If this sounds familiar, it’s because the approaches used to spur global business mobilization around nature and biodiversity loss are the same approaches used to generate action for climate change. That’s why this movement is gathering momentum so quickly—and gaining attention faster than many business leaders had anticipated.

Climate and biodiversity are directly connected. Climate change is one contributor to biodiversity loss, yet measures to improve biodiversity—such as renaturation of moors or protecting forests—have a positive effect on climate. However, not all carbon transition measures help biodiversity. For example, wind parks and infrastructure built for hydrogen power often negatively impact local biodiversity. While climate change is relatively easy to measure based on temperature and atmospheric greenhouse gas (GHG) levels, biodiversity has numerous factors such as location specificities, complex system dynamics, and lack of historical baselines that make it significantly harder to measure and monitor.

A World at Risk

As with climate change, the big push to tackle biodiversity and nature loss is long overdue. The world has seen species populations drop by nearly 70% since 1970 (while the human population has more than doubled). The World Economic Forum estimates that $44 trillion of economic value, equivalent to more than 50% of the global GDP, is at risk if nature degradation is not reversed before 2030. This impact can come through such well-documented issues as falling agricultural yields in dying soils and lower fertilization rates of plants from decimated bee populations, for example. While the effects are being felt harder in such regions as Southeast Asia, Latin America, and the Mediterranean basin, biodiversity loss eventually impacts everyone, everywhere.

The Major Contributors to Biodiversity Loss

Three big economic systems are the major contributors to the growing losses in nature and biodiversity:

1. The food, fiber, and biofuel system, which is responsible for almost three-quarters of threatened species through deforestation and water and soil pollution.
2. The infrastructure and built environment system contributes to the degradation of land and seabeds, impacting almost 30% of threatened species.
3. The natural resources and energy system contributes to issues such as habitat destruction and landscape alterations, affecting 18% of threatened species.

The Corporate Response

For business, the biodiversity imperative comes with risks and opportunities. On the one hand, companies need to prepare to mitigate such risks as disrupted supply chains, regulatory concerns, and diminished brand equity. Some of the risks are quite fundamental to their future existence. What happens, say, when a major coffee producer can’t get enough beans due to dwindling global yields? On the other hand, addressing biodiversity can set companies up to grow in new directions, such as agriculture input firms developing new types of seeds or fertilizers for biodiversity-fragile areas.

Barriers to Action

Yet executives tell us they encounter four basic barriers in drafting a biodiversity strategy.

1. Many business leaders are aware of the extent of biodiversity loss in general, but a significant number are unaware of their own company’s impact and exposure.
2. Companies find it difficult to show the potential value that can be generated from addressing biodiversity loss.
3. Companies have been slowed by the nascency of biodiversity standards in the corporate context.
4. Corporate efforts are stymied by a gap in available financing.

Early Movers

Some companies have been comparatively quick to act. For example, Nestlé already achieved a 99.1% deforestation-free supply chain in 2022 while also setting a course for sourcing half of its key ingredients through regenerative agricultural methods by 2030. Similarly, L’Oréal aims to transform its supply chain so that by 2030, 100% of biobased ingredients will be traceable and from sustainable sources while 95% of its ingredients will be biobased. The first company to build an offshore wind farm, Danish energy producer Ørsted set a goal to deliver a net-positive biodiversity impact from all new

SDGs, Targets, and Indicators

SDGs Addressed:

1. SDG 13: Climate Action
2. SDG 15: Life on Land

Targets Identified:

• Target 13.2: Integrate climate change measures into national policies, strategies, and planning
• Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats
• Target 15.9: By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies, and accounts

Indicators:

• Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning measures into their national policies, strategies, and planning
• Indicator 15.5.1: Red List Index
• Indicator 15.9.1: Progress towards national targets established in accordance with Aichi Biodiversity Target 2 of the Strategic Plan for Biodiversity 2011-2020

Explanation:

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The issues highlighted in the article are connected to SDG 13: Climate Action and SDG 15: Life on Land. The article discusses the interconnectedness of climate change and biodiversity loss, emphasizing the need to address both issues together.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the following targets can be identified:

– Target 13.2: Integrate climate change measures into national policies, strategies, and planning.

– Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats.

– Target 15.9: By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies, and accounts.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets:

– Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning measures into their national policies, strategies, and planning.

– Indicator 15.5.1: Red List Index.

– Indicator 15.9.1: Progress towards national targets established in accordance with Aichi Biodiversity Target 2 of the Strategic Plan for Biodiversity 2011-2020.

These indicators can be used to measure the integration of climate change measures into national policies, the reduction of natural habitat degradation, and the integration of ecosystem and biodiversity values into planning and development processes.

Table: SDGs, Targets, and Indicators

SDGs	Targets	Indicators
SDG 13: Climate Action	Target 13.2: Integrate climate change measures into national policies, strategies, and planning	Indicator 13.2.1: Number of countries that have integrated mitigation, adaptation, impact reduction, and early warning measures into their national policies, strategies, and planning
SDG 15: Life on Land	Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats	Indicator 15.5.1: Red List Index
	Target 15.9: By 2020, integrate ecosystem and biodiversity values into national and local planning, development processes, poverty reduction strategies, and accounts	Indicator 15.9.1: Progress towards national targets established in accordance with Aichi Biodiversity Target 2 of the Strategic Plan for Biodiversity 2011-2020

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: bain.com

 

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