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Nature is as vital for our mental and physical wellbeing as it is for humanity’s ability to manage change, global health threats and natural disasters. It is an integral part of our life and vital for a resilient society.
Biodiversity and business are intrinsically linked. Discover how your business is affected by nature loss and what you can do about it.
During recent years, governments, regulators and businesses have recognised the systemic, operational and financial risks posed by climate change. However, as highlighted by the recent publication of the EU 2030 Biodiversity Strategy and the Economics of Biodiversity review by Professor Sir Partha Dasgupta, the challenges posed by biodiversity and ecological conservation will demand governments and businesses confront and manage these risks with the same momentum.
Biodiversity: What does it mean and why is it in crisis?
In simple terms, biodiversity concerns the variety of life on Earth as a whole. Biodiversity comprises every plant, animal, insect and microbe that makes up the ecosystems on the planet.
However, as a direct result of continuous unsustainable activity, the global population of wild species fell by 60% between 1970 and 2014. Further to this, according to the 2019 IPBES Global Assessment Report on Biodiversity and Ecosystem Services, one million species of plants and animals remain at risk of extinction within decades.
Why should businesses care about biodiversity?
Business and nature are inextricably connected, and a disturbance to biodiversity has serious consequences for companies.
The food and beverage business is one example of an industry that faces the greatest risk from biodiversity loss. Deforestation, soil erosion and pollinator extinction pose a serious threat to food supplies and ultimately, global value chains. For instance, over 75% of global food crops are dependent to at least some extent, on pollination. Consequently, as the loss of pollinators worsens, the global crop production, with a market value between $235 billion and $577 billion, is at risk.
Although the level of dependency varies by industry, biodiversity loss is an acute risk for all businesses. Many organisations are aware of this and are beginning to take action, but managing biodiversity risk is a new and different challenge for business. A recent study of Fortune 500 companies found that whilst nearly half referenced biodiversity within sustainability reports, only five had set sufficient and tangible nature-related targets. Knowing how to measure and understand nature-related risks to business and value chains remains a challenge.
Our top three business biodiversity considerations:
Addressing the consequences of change in global biodiversity requires wholescale societal commitment, and a clear vision, embedded in global business strategy. This year, the European Commission will launch a new initiative focused on sustainable corporate governance. This initiative, which may translate into legislation, will call on businesses to ensure that environmental issues are being considered and assessed across value chains in a way that is proportionate to the size of companies.
At Deloitte, we recognise the need to think ahead and focus on solutions that see business and biodiversity as two sides of the same coin. We want to work with you to start managing nature-related risks and seek out opportunities to build a more resilient business - one that can deliver strong financial and social returns.
Mike has more than 25 years’ experience in risk management, controls and governance. He leads Deloitte UK’s sustainability practice, which helps clients achieve their sustainability goals by developing, measuring and reporting on corporate responsibility strategy. Mike works with many large and listed organisations, helping them on sustainability issues ranging from decarbonisation to internal audit and assurance.