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Scientists have declared a biodiversity crisis — here's what that means for business

It's not often that environmental news even gets close to trumping the arrival of a royal baby. But fresh in the wake of Extinction Rebellion protests, the declaration of a "climate emergency," the publication of the Committee on Climate Change's Net Zero report and a surge in electoral support for the Green Party, some news outlets grasped which way the wind is blowing. The news of the United Nations' dire warning on the state of the world's natural life-support systems led BBC News bulletins throughout the day, and a number of newspapers made space on their front pages to report on the crisis.

Inevitably, plenty of papers still opted to lead on the news of a new prince, prompting a scathing Twitter thread from journalist and campaigner George Monbiot, who offered a stinging response to the rhetorical question "which industry presents the greatest environmental threat, oil or media?" "I would say the media," he argued. "Every day it misdirects us. Every day it tells us that issues of mind-numbing irrelevance are more important than the collapse of our life support systems."

Any even-handed assessment of the new paper from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) would concede he might have a point. The paper pulls no punches in setting out the almost unremittingly bleak outlook for the world's wildlife and the huge implications that could flow from such an historic loss of biodiversity. It warns of an "unprecedented" and "accelerating" rate of species extinction that means that 1 million of the world's 8 million plant and animal species are at risk of disappearing from Earth altogether in the coming decades.

More than 40 percent of amphibian species, almost 33 percent of reef-forming corals and more than a third of all marine mammals are threatened, the research concludes. The picture is less clear for insect species, but available evidence supports a tentative estimate of 10 percent being threatened, while at least 680 vertebrate species have been wiped out since the 16th century.

The hollowing out of the natural world is being driven primarily by human activity, according to the scientists, with a growing global population leading to rising demand for food, goods and natural resources  leaving less land and sea as the preserve of the natural world. The paper also warns that this collapse in global biodiversity will in turn have "grave impacts" on human populations.

The paper also warns that this collapse in global biodiversity will in turn have 'grave impacts' on human populations.
"The health of ecosystems on which we and all other species depend is deteriorating more rapidly than ever," said IPBES Chair, Sir Robert Watson. "We are eroding the very foundations of our economies, livelihoods, food security, health and quality of life worldwide." 

The report, compiled over three years by 145 expert authors from 50 countries, was modeled on the Intergovernmental Panel on Climate Change (IPCC), and will form the basis for policy making under the U.N. Convention on Biodiversity. It is the most comprehensive assessment of global biodiversity completed.

Ahead of a major meeting of the U.N. Convention in Beijing next spring, G7 Environment Ministers were quick to promise further action. In a charter released Sunday just ahead of the publication of the IPBES report, they released the Metz Charter on Biodiversity (PDF) under which they jointly promised to "accelerate and intensify our efforts to halt the biodiversity loss." Action will include "new, ambitious and achievable commitments for swift action on biodiversity," they promised.

French President Emmanuel Macron already has translated this into domestic action, unveiling new initiatives to tackle food waste and pesticide use and increase the volume of land and sea under environmental protection. 

But the IPBES is clear that politicians alone won't be able to solve the crisis facing the natural world. "The report also tells us that it is not too late to make a difference, but only if we start now at every level from local to global," Watson stressed. "Through 'transformative change', nature can still be conserved, restored and used sustainably  this is also key to meeting most other global goals. By transformative change, we mean a fundamental, system-wide reorganization across technological, economic and social factors, including paradigms, goals and values." 

This 'system-wide reorganization' could be nothing short of a reframing of our entire economic system ... in favor of a more 'holistic' measure of social progress.
This "system-wide reorganization" could be nothing short of a reframing of our entire economic system, away from GDP and economic growth as a primary driver of success in favor of a more "holistic" measure of social progress, the paper posits.

The scientists call for a reshaping of incentives to direct markets towards more climate-smart investments. In other words, the global economic system must find a way to price environmental and social costs into investment decisions in order to prevent perverse environmental outcomes.

Doing so will help to preserve a huge amount of financial value, the scientists contest. For example, the loss of pollinators such as bees threatens the world's ability to produce food, putting up to $577 billion of crop output at risk. Meanwhile, the productivity of the world's land is calculated to have dropped 23 percent since 1970, curtailing food production. Annual global fossil-fuel subsidies from governments of $345 billion are costing $5 trillion in environmental impacts, according to the report. 

Economic transformation on the scale envisaged by the report would result in massive implications for the world's business community. It raises the prospects of fundamental changes to everything from planning policy and supply chain management to corporate reporting and product standards. However, some quick wins are available for firms looking to lead in the transition to a more nature-friendly, environmentally sustainable economy. 

Curbing carbon emissions and pricing in negative environmental externalities into investment decisions will help firms insulate themselves both from physical risks as well as policy and regulatory changes as governments ramp up efforts to respond to the biodiversity crisis. A rollback of fossil fuel subsidies would be a blow to firms not invested in renewables and other low-carbon forms of energy production, but it also would increase the competitiveness of green energy investments. 

Other crucial actions businesses can take flow from the need to respond to the shifting political and social pressure to act. As policymakers place more land and sea under protection, firms will need to be more proactive in making the resources already available to them work harder. Cutting waste, particularly from food, should be a focus for all corporates working in the food and drink sector.

Meanwhile, companies can expect to face growing pressure to trace their supply chains right back to source, in order to guarantee they are not harvesting resources from protected areas — increasingly, as public concern over biodiversity grows, demonstrably sustainable supply chains could become part of the social license to operate for any business.

As policymakers place more land and sea under protection, firms will need to be more proactive in making the resources already available to them work harder.
Some pioneering corporates are beginning to consider how such approaches could be embedded into everyday business practices. For example, back in 2017, Kering, Interserve, Mars and Asda were among a group of leading businesses to develop a new methodology for companies to measure their biodiversity impacts. Meanwhile Alpro teamed up with WWF in April to work on a wide-ranging new research project that will seek to set science based targets to curb environmental impacts on land, water, nutrients and biodiversity. Supermarket giant Tesco is similarly working with WWF to slash the environmental footprint of the average shopping basket. Such schemes could forge a path for firms looking for climate and nature friendly ways to do business.  

Of course, certain economic sectors will be more directly affected. In agriculture, firms are set to face increased pressure to minimize land use change. This could lead to changes in the types of food and drink the world produces, with an acceleration in the switch from meat and dairy consumption to more plant-based diets. "Land use now appears as the major driver of the biodiversity collapse, with 70 percent of agriculture related to meat production," Yann Laurans from IDDRI, the French policy research institute, told the BBC following the IPBES report. "It is time to reconsider the share of industrial meat and dairy in our diet."

Beyond agriculture, science and pharmaceuticals could lose out on the bounty of natural resources for treatments provided by the natural world  70 percent of drugs used for cancer are either natural or synthetic products inspired by nature, the paper notes.

But the key takeaway from the report is that action to tackle biodiversity loss has the potential to impact almost every firm on earth. The answers for corporates will sound familiar  reducing waste, improving efficiency, pricing in environmental costs, switching to green power, publicly supporting progressive policy measures  not least because they are much the same as what is needed to fight climate change. As such the potential rewards of being first off the mark in driving the development of a green, sustainable, and net zero emission economy are even larger than first thought  but then again, so too are the risks of failure.

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