When it comes to biodiversity, businesses are at a loss

This article is sponsored by Quantis.

You’ve heard it called the “nature crisis,” an “ecological collapse” or the “sixth mass extinction.” Regardless of the label, there is no doubt that the accelerating decline of biological diversity will have dangerous repercussions for ecological resilience and human health and security. 

The COVID-19 pandemic has provided shocking confirmation of the inextricable link between humanity and nature, and the devastating and far-reaching consequences of environmental degradation. According to United Nations Environment Program chief Inger Andersen, the outbreak of coronavirus was a “clear warning shot.” So, how will we respond? 

There are two possible paths forward: complacency or action. We can continue with “business-as-usual” while bracing ourselves for the mass disruptions that lie ahead, or we can recognize biodiversity as one of our strongest allies in tackling climate change and securing a thriving future for people and planet. The choice is clear. The challenge? Unlike climate change, the topics of biodiversity and ecosystem services are not so easy to grasp. When it comes to addressing biodiversity loss, many businesses are, well, at a loss.

In a recent survey conducted by Quantis among 29 leading corporations, 86 percent of respondents said they have or plan to develop a biodiversity strategy in the next two years, but only 4 percent feel well-informed about the correct actions to take. If you can relate, know you’re not alone. If you’re among the 96 percent of sustainability professionals feeling perplexed about how to address this topic, here’s what you need to know to tackle biodiversity loss effectively.

What is biodiversity worth to business? A lot, it turns out

Biodiversity and business success go hand in hand. Swiss Re Institute’s recent study estimates that more than half of global GDP depends on high-functioning biodiversity and ecosystem services. For example, pollinators make crop production possible, while soil microorganisms are critical for soil fertility. That’s a cool $41.7 trillion, to put things in perspective. Yet, biodiversity conservation only recently has been given a seat at the table, now that it’s in free fall — not only in terms of species extinction but also total loss of biomass. 

Land-use change is the main culprit of biodiversity loss, but resource exploitation, climate change and pollution are to blame, too. This is bad news for the planet and for business resilience. A business-as-usual scenario for land-based industries is a snowball trajectory of diminishing yields, reduced crop quality and lower nutritional value for food crops. 

While today’s diagnosis sounds dire, not all is lost. The good news is that nature knows how to bounce back when given the space to do so. We caught glimpses of this earlier this year when the pandemic reduced human activity. In France’s Camargue, the famous flamingo population grew tenfold.

Companies that work to protect nature seize opportunities to address supply chain risks, while fostering trust with consumers and investors. Perhaps most important, by addressing land use and land-use change, businesses can tackle the primary driver of both biodiversity loss and their climate impacts, protecting the critical carbon sinks that serve as natural climate solutions. It’s a win-win-win.

With a clear business case, new collaborative initiatives are putting biodiversity on the agenda, such as the European Commission’s Business @ Biodiversity and Le Club B4B+. In September, a record number of businesses (including Quantis) with a combined revenue of $4 trillion joined Business for Nature’s call to action to urge governments to adopt policies to reverse nature loss in this decade.

The commitment is there. Now it’s time for action. This is how companies can get it right. 

Making the leap from reputation management to systemic change

Today, corporate biodiversity action is where climate strategy was years ago — aiming for incremental reductions and quick wins that may or may not be relevant to a company’s actual impacts. 

Many businesses focus on a few high-profile commodities or species that present reputational brand risks. This nearsighted and passé approach is often reactive and disconnected from other sustainability initiatives. Without a quantitative and science-based view of their impacts, companies can miss critical hotspots in their value chain and the underlying drivers putting their business at risk.

Just like climate strategy, it’s time to take a systems-level approach aligned with science and plugged into business strategy.

When you align your biodiversity strategy with other topics such as land, climate and water, you find important synergies and avoid impact transfers from one topic to another. Source: Quantis.

Getting strategic: Holistic, relevant and climate-aligned action

What do best-in-class biodiversity strategies look like? They’re holistic, relevant and climate-aligned. Holistic means assessing and addressing biodiversity impacts across the entire value chain. A quantitative value-chain screening enables companies to identify biodiversity hotspots — those areas where biodiversity loss is greatest — and focus efforts there. 

That’s what relevant action means; it’s targeting interventions where they matter most. Makeshift initiatives that focus on one species or one area of the value chain miss the mark. 

For example: A biodiversity strategy for a food company with key products from coffee and cocoa can’t really be considered credible if it’s focused on beehives above its European corporate offices. Likewise, a fashion company with 95 percent of its revenue coming from cashmere products isn’t likely to make much progress on its biggest impacts through a regenerative agriculture project focused on cotton. Companies set themselves up for resilient success when data and science define the level of ambition and guide decision-making on biodiversity.

Make sure actions to address nature loss are relevant to your areas of highest impact. Source: Quantis.

Finally, effective biodiversity strategies are aligned and integrated with climate efforts so progress in one area supports progress in the other, and we avoid impact transfer. An integrated approach also helps companies navigate emissions reductions and removals on their path to net zero. 

Start by assessing your footprint on nature

How can you ensure your strategy checks all the boxes (holistic, relevant and aligned climate efforts)? By taking stock of and understanding your company’s impacts. 

A variety of methods and assessments have emerged for measuring biodiversity impacts, and at this stage in the game, a standard approach hasn’t been defined. Things are especially complex for biodiversity because the assessment metrics are more varied than for other sustainability topics. 

Whereas climate change impacts are measured on a global scale using greenhouse gas emissions as the indicator, impacts on biodiversity are highly localized and multidimensional. Ten to 15 indicators address the main drivers of biodiversity loss laid out by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). 

At Quantis, we’ve developed a biodiversity impact assessment that gives a full picture of a company’s impacts — think of it as a corporate footprint on nature. 

The tool harnesses leading-edge footprinting science (life cycle assessment, or LCA) and integrates local considerations addressing climate change, water depletion, pollutant emission and land use. This approach gives companies a big picture view of their impacts across the entire value chain, allowing them to identify the commodities and activities driving the greatest impacts on nature and where in the world these impacts are taking place. 

With this baseline, we can determine the right approach and methods to use, such as site-specific initiatives, a supplier engagement strategy or a deep dive into a specific issue such as soil health. An assessment also plays an important role in getting internal stakeholders on board, the ones who will be key players in driving transformation, including product development teams, sourcing and suppliers. 

Workshops and game-based learning are effective ways to get internal teams informed and engaged on key concepts and trends in biodiversity and to help them understand how biodiversity is relevant for their specific business activities and the scale of change needed.

Is your business target-ready?

When the Science Based Targets initiative launched, it catalyzed a new standard for climate strategy. More than 1,000 companies already have committed to use science as their compass for business transformation in line with a 1.5 degrees Celsius future. 

The Science Based Targets for Nature soon will do the same for biodiversity. It’s an exciting time to help shape the movement to reverse nature loss and regenerate biodiversity. Quantis advised on the initial guidance for business on the nature-related metrics developed by the Science Based Targets Network and expects methods to be released in 2021.

With a biodiversity impact assessment, businesses will be ready to set these targets and start off on their journey to building a science-based biodiversity strategy. If you’re ready to get going, let’s chat.