Building a business for biodiversity

The long-term, damaging impact of human interference in nature is seen across the globe, in flooded cities, deforested land, food instability, rising sea levels, increased temperatures, extinction of species and more. The loss of biodiversity, in particular, is exhibited in the UN’s report, where they record up to 66% of marine environment is being altered. As a result of this growing loss, more companies are considering biodiversity conservation in relation to how they operate. In this article, we outline how important biodiversity is to your business and how to build a strategy to better protect the planet and its inhabitants.

What is biodiversity?

Biodiversity is a term used to describe the variety of diverse species living on Earth, encapsulating our vibrant ecosystem — all animals, plants, bacteria, and fungi. Areas with high levels of biodiversity, or areas where endemic species are found, are referred to as ‘hotspots’. 

Scientists estimate there are approximately 8.7 million species of plants and animals, but only 1.2 million living species have been identified so far. All of these living organisms rely on their habitats and stable food chains for survival. But their very existence is being threatened by human technology and businesses. Environmental corruption, such as pollution and deforestation, has a direct and devastating impact on biodiversity and ecosystem services.
 

Why does biodiversity matter? 

Humans rely on biodiversity to survive. Not only does it satiate our physical needs, like plants and animals for food, fresh water to drink, and clean air to breathe, biodiversity can also affect our mental health with parks and greenery. Further, biodiversity provides a safety net against climate change — forests mitigate flooding, coastlines protect us from rising sea levels, and wetlands regulate pollution.  

At the 2022 UN Biodiversity (COP15) summit, scientists conveyed the severity of the biodiversity crisis, warning of a sixth mass extinction, with one million living species now under threat. With all species being interconnected in one ecosystem, and relying on one another for survival, it’s vital that humans — at the highest on the food chain — aim to combat this increasing loss by finding more ecofriendly ways to operate businesses, reducing the amount of pollution we generate, and sourcing more sustainable resources.

What’s the relationship between biodiversity and corporate sustainability?

Nowadays, businesses rely on biological diversity more than they might initially know. The World Economic Forum estimates that over 50% of the world’s gross domestic product (GDP) is dependent on ecosystems, amounting to approximately USD 44 trillion. Companies rely on ecosystem diversity for sourcing materials, pollination, providing fresh water, and maintaining supply chain relationships.  

Even with this insight, businesses continue to engage in practices which knowingly result in the destruction of biodiversity. Habitat destruction and deforestation lead to the extinction of species; pollution from chemical waste infects our waters and air, corrupting two survival necessities for both humans and animals; fumes and toxic substances results in damage to our environment, instigating climate change, erosion, and flooding.  

This damage to the ecosystem has already started interrupting the ability to meet world goals addressing poverty, hunger, oceans, and land. It’s a vicious cycle whereby businesses need biodiversity to function, but as they do so, they’re damaging the environment that biodiversity needs to survive.

How can biodiversity impact your business?

Operations driving biodiversity loss can be found in every supply chain, but some industries are more damaging than others. Food and drink, infrastructure, energy, and textiles are responsible for 90% of global biodiversity loss. As ecosystems decline, these sectors are most at risk because food crops need pollinators and a lot of apparel requires cotton.  

In light of the importance of conserving marine biodiversity — including new and endangered species and their habitats — more legislation is being published to promote more sustainable practices. Businesses can now face significant costs via fines for not meeting compliance requirements. These regulations are vital drivers of biodiversity conservation. Businesses will need to remain vigilant in the face of these changing demands, ensuring their operations don’t directly conflict with EU law.  

EU Green Deal 

The EU Green Deal, aiming to achieve climate neutrality by 2050, includes the EU’s biodiversity strategy for 2030. A long-term plan to protect against the continuous destruction of nature and reverse the degradation of ecosystems, the EU’s strategy aims to build resilience to climate change, forest fires, food insecurity, and disease by protecting wildlife.  

The strategy includes funding for biodiversity conservation, and a new governance framework aiming to implement and track progress, improve knowledge, financing and investments, and make decisions with nature at the forefront.   

Regulation on Deforestation-free products 

Regulation (EU) 2023/1115 on deforestation-free products entered into force in June 2023. The main provisions of the regulation will apply from 30 December 2024, with its aims as follows: 

• Guarantee the products EU citizens consume don’t contribute to deforestation or forest degradation 
• Reduce carbon emissions caused by EU consumption by a minimum of 32 million metric tonnes per year 
• Address deforestation driven by agricultural expansion 

The regulation aims to achieve these goals by expanding agricultural land connected to the production of commodities, such as cattle, wood, cocoa, soy, palm oil, coffee, rubber, and derived products such as leather, chocolate, tires, and furniture. From 30 December 2024, any trader who exports or places these commodities on the EU market will be required to prove that the products haven’t contributed to deforestation or degradation. 

EU proposal for a Nature Restoration Law 

A relatively new proposal approved by the European Commission, the EU proposal for a Nature Restoration Law aims to restore ecosystems. Seeking to become the first continent-wide law of its kind, and a key element to the EU biodiversity strategy, the proposal wishes to meet international commitments by achieving the EU’s climate mitigation and adaption objectives as well as building a long-term strategy for the recovery and resilience of nature.  

With 81% of habitats declining, this proposal includes restoring wetlands, rivers, forests, grasslands, and marine ecosystems in an effort to increase biodiversity, provide secure access to clean water, air and crops, limit global warming to 1.5 degrees Celsius, and eventually build up Europe’s resilience to natural disasters and mitigate food insecurity.

How to build a business culture for biodiversity

For businesses at the forefront of sustainability, conserving ecosystem services and promoting business opportunities which actively strive to recover our damaged biodiversity is a priority. The mandatory standards for sustainability reporting laid out by the CSRD will keep companies accountable. By adhering to a robust framework, businesses can review their impact on biological diversity, identify gaps, and implement sustainable solutions.  

Further to tracking sustainability in line with global frameworks, companies can also work to develop biodiversity-friendly products and supply chains. One way of achieving this is through a reuse and recycle scheme — not only does this cut down on resources, it also helps to reduce waste and input costs. Another sustainable solution that will aid biodiversity conservation is sourcing alternative ingredients and materials which don’t contribute to deforestation. Food and beverage company, Nestlé, for example, have pledged to source half of their key ingredients through regenerative agriculture by 2030. This commitment to biodiversity is integrated in their Net Zero roadmap, agricultural framework, and their Forest Positive strategy.  

So what can you do? 

To join the effort in protecting native species, endangered species, and new species around the world, businesses should consider the following: 

Environmental impact 

Double materiality is expected under the CSRD, so it’s therefore mandatory for companies in the EU to track both financial and impact materiality. Financial materiality looks inward, evaluating the impact the planet and people have on businesses, while impact materiality looks outward, analyzing the impact businesses have on the planet and society.  

Companies should, as a starting point, identify their environmental impact.  

• How damaging or harmful are your products, your chemicals, your processes?  
• How are you disposing of your waste and wastewater?  
• How many carbon emissions do you release?  

Having a holistic overview of your company’s environmental position is vital in understanding what you need to do to be more sustainable. 

Create a framework related to biodiversity 

Next, evaluate the risks and opportunities available to you, regarding biodiversity and its conservation. Understand how biodiversity loss can affect your financial situation. Manage nature-related risks with a reliable and long-term framework.  

Goal management 

After choosing your framework, ensure your sustainability goals can be implemented in a realistic timeline. Set targets that align with existing EU legislation on minimizing pollution, food waste, and wastewater discharge. You can also choose to sign corporate pledges to publicly commit to conserving nature.