The business of biodiversity

As the International Year of Biodiversity gets under way, John Elkington and Jennifer Biringer foresee a central role for corporations in conservation.

Welcome to the International Year of Biodiversity. Throughout 2010, countless initiatives will promote the protection of biodiversity and encourage businesses, governments and individuals to take action to reduce the constant loss of biological diversity worldwide. And not before time.

Biodiversity has long been the Cinderella, the overlooked topic, among environmental issues, with even the chief executives of some of the world’s biggest corporations comfortably confident it has little, if anything, to do with their day-to-day preoccupations – except, of course, where their operations directly impact rainforests, temperate wetlands or coral reefs, as in the case of a food company using palm oil whose production has involved the clearance of virgin forest.

Most business leaders assume that the protection of species and genetic diversity is a matter for governments. And they are not wrong in making that assumption. But, as the evidence of biodiversity erosion mounts and the sense of government failure in many parts of the world begins to press in, the risk grows that business will be called to account.

The International Year of Biodiversity will focus on corporations and their supply chains as agents of biodiversity destruction. But it will also, and perhaps more importantly, treat them as one of the few agents of change with the capacity to come up with innovative new solutions to a challenge that has undermined so many past civilisations. So it is worth reviewing why biodiversity is a legitimate concern both for corporations and those who regulate them and why it is unlikely to remain the Cinderella for much longer.

The evidence suggests that biodiversity is declining severely across the board. Forests, for example, have been shrinking at the rate of 60,000 square kilometres a year since 2000; average hard coral cover in the Caribbean has declined from 50% of the sea floor to 10% within the last three decades; and 35% of mangroves have disappeared in the last 20 years. A survey of 3,000 wild species from 1970 to 2000 showed a consistent decline of 40% in average species abundance, with a 50% reduction of inland water species and a 30% decline in inland and marine species.

Were there such a thing as the Board of Earth Inc., it would be facing a reduction in biodiversity and related forms of natural capital at a pace 1,000 times greater than background rates typical of the planet’s past. Even a world that allowed the sub-prime version of capitalism to run riot ought to be more than a little concerned when faced with such trends. Indeed, there is an increasingly urgent imperative to mainstream biodiversity into the policies, plans and budgets of both the public and private sectors.

Although there have been positive private-sector contributions, the response from the business world to these trends and calls to action, over time, has been decidedly mixed. Industries with large footprints, such as oil and gas and mining, were early movers on the biodiversity agenda, due to a visibly direct impact on landscapes and their need to secure a licence to operate. As a consequence, companies like Shell have invested in biodiversity assessments and, more recently, biodiversity offsets.

Likewise, the relationship between the food-production sector and biodiversity came into focus in a high-profile way with campaigns against McDonald’s for purchasing beef raised on former rain forest land and, more recently, feeding chickens with soya grown on deforested Amazon terrain. These and other cases have helped spur the development of better agricultural-management practices to reduce environmental impacts, though they are not spreading nearly fast enough.

In the run-up to last December’s climate change conference in Copenhagen, some government and business leaders acknowledged the ways in which the climate-change agenda could drive a re-evaluation of the services that natural habitats play in regulating carbon cycles and building ecological and economic resilience. However, while sustainability experts agree that biodiversity conservation is a top priority – as seen most recently in a 2009 survey from consultancies SustainAbility and Globescan of nearly 1,700 experts across multiple sectors, with 82% agreeing that it is very or somewhat urgent – generally business does not appear to rank it as a significant concern.

More specifically, of the 50 leading businesses reporting on sustainability in 2006, we found that only three made an explicit mention of biodiversity as a financially significant concern. The US health-care company Johnson & Johnson is a notable exception, having committed to enhancing biodiversity conservation across all of its facilities by this year and having worked with Harvard University to make the case for the dependence of human health on biodiversity.

We see some cause for optimism in initiatives like the Corporate Ecosystem Services Review, which was launched by Geneva-based business coalition the World Business Council on Sustainable Development (WBCSD) and the US think tank World Resources Institute (WRI) in 2008 to provide business managers with a means of identifying and managing risks and opportunities arising from dependence and impact on ecosystems. A variety of tools also has been developed in recent years, the most recent being WBCSD’s Ecosystem Valuation Initiative, which enables the quantification of ecosystem risks and opportunities in order to further embed biodiversity values into existing financial and business-planning tools. This tool is being road-tested by 10 to 15 WBCSD member companies, with results due to be reported during the year ahead.

In the longer term, we are hopeful that a new breed of scientists, innovators, entrepreneurs and investors will emerge to drive forward new technologies, new business models and, crucially, a new market paradigm. Consider, for example, US biologist Craig Venter’s trawling of the oceans for new genes for such applications as hydrogen production and synthetic biology, made even more interesting by his US$600-million (4.1 billion yuan) deal with ExxonMobil on algal biofuels. And then there is Janine Benyus’s work on biomimicry, which is worth a chapter in its own right as a source of novel, potentially revolutionary, ideas on materials, products, processes and management systems.

So while the biodiversity glass may seem half empty to some – and in danger of draining at an even faster rate as the world’s population pushes towards nine billion by mid-century – we choose to see it as still, more or less, half full.

John Elkington is co-founder of SustainAbility and of Volans. Jennifer Biringer is director of client services at SustainAbility and was previously manager of WWF’s North America Forest & Trade Network.
Homepage image by Dorn Dada