Climate change is more mature and understood as a business risk. Previously, climate change was considered an environmental externality, but over the past decade this has transformed into an environmental risk and now a financial risk. There is no doubt that biodiversity lags far behind climate change on this curve.
Partly as a result of this immaturity, despite similarities with climate change risks, biodiversity risks are understood and managed differently.
There is no single indicator
While calculating carbon emissions is relatively easy for companies, measuring biodiversity can be complex and multifaceted. Next he has two elements.
- A method of assessing the biodiversity value of an ecosystem by measuring the number of endangered species and other appropriate indicators.
- Use this assessment to measure the impact of activities on biodiversity, such as pollinator abundance on agriculture and continued clean river flows. These can be measured at different levels: company level, site level, project level.
of TNFD This framework should help companies understand how to disclose biodiversity risks and opportunities and their performance. This could help shift global financial flows towards positive outcomes naturally. In parallel with TCFD Even if appropriate, organizations should not immediately expect the same level of guidance and accuracy from the tools provided. Full market release of this framework is planned for late 2023.
Offsets are not “like”
Offsets cannot compensate for the losses that destroy ancient ecosystems containing rare species. Because no two areas have the same habitat or species population, some biodiversity is always lost in an offset exchange. Additionally, for biodiversity offsets to be meaningful, a long-term commitment may be required to fully consider direct, indirect, and cumulative impacts across geography and the long term. When it comes to managing biodiversity risks, avoiding and mitigating impacts on biodiversity loss should be a priority and offsets should be considered as a last resort.
Multiple values need to be considered
Landscapes should be managed taking into account their productive, natural and cultural values. Conserving biodiversity does not require locking land into its natural state. We can explore the deep knowledge of indigenous peoples to understand how these values can coexist.
skill set
Biodiversity is a huge multidisciplinary field, and companies are typically required to work outside their comfort zones on new types of capabilities. Many of the conservationists now brought on board by companies are former activists from “the other side.” This requires emotional maturity to overcome historical antagonisms and recognize that businesses and activists need to work together to protect biodiversity. Nongovernmental organizations (NGOs) and philanthropists typically work where markets are failing. Companies need to work with these stakeholders to understand the nature of failures so they can avoid distortions as the market develops.
On this last point, companies must accept that there are only a few simple, straightforward answers. For example, in agriculture, you can't just stop using pesticides if people might starve to death. Instead, the industry should be encouraged to replace monoculture with polyculture farming and farm in ways that support more biodiversity, not just on hobby farms but across large-scale agriculture. This will likely require an unprecedented level of cooperation among diverse stakeholders. Companies need to welcome former adversaries into the boardroom and earn their trust. Activists should avoid undermining corporate trust and become part of the solution.
