Navigation path

Business and Biodiversity

The interaction between business and biodiversity is complex

Businesses and biodiversity are intrinsically linked but the relationship varies between businesses, and between business sectors.  While most attention might focus on the potential impacts of activities on biodiversity, most businesses are themselves also dependent on biodiversity to differing degrees. 

The relationship between businesses and biodiversity includes:

  • Business dependencies on biodiversity and ecosystem services as inputs to business activities. Accessing and using these inputs can often impact on biodiversity and ecosystem services. A large number of businesses fall into this group, but the role of biodiversity in supporting these businesses is often indirect, uncertain and difficult to quantify.
  • Business impacts on biodiversity and ecosystem services as outputs of business activities. Almost all businesses will have some impacts on biodiversity, although the scale of this impact may vary and the impacts may, in many cases, be largely indirect. Business impacts may also only become apparent further up the supply chain. Consequently, businesses are often impacting on biodiversity in other countries, often without realising or accounting for this in their decisions.

Impacts on biodiversity resulting from both of these elements (i.e. business inputs and outputs) can be separated in time and space from where and when business activities take place, partly as a result of impacts being felt further up and down business supply chains.

This relationship is shown in a simplified conceptual model in the Figure below. This model is not inclusive of all businesses (e.g. does not cover those which focus on land/water management, managing/conserving/restoring biodiversity), but seeks to merely illustrate key aspects of the relationship for some businesses.

Relationship between business activities and biodiversity

Relationship between business activities and biodiversity
Source: ICF GHK, adapted from Mitsubishi Global Environmental Portal

Awareness of biodiversity, and the associated risks and opportunities it presents for businesses, has increased in recent years but on the whole biodiversity still remains a relatively low priority

There is a growing level of awareness of the importance of considering biodiversity in business decision making, and the biodiversity-related risks and opportunities to businesses. The Natural Capital Coalition initiative for instance, identified five biodiversity-related risks and opportunities for businesses

The four risks and opportunities for businesses related to biodiversity and ecosystem services

 

Risks

Opportunities

Financial

Higher costs of capital or difficulties acquiring equity as banks and investors implement more rigorous lending and investment criteria when they perceive business activity being limited by a decline in ecosystem services

Opportunities for businesses that take up other operational, regulatory and legal, reputational and market and product opportunities to access other lenders and socially responsible investment funds that would not otherwise be available to them

Operational

Related to an increased scarcity and cost of raw materials, e.g. freshwater, disruptions to business operations caused by natural hazards etc.

From introducing new more efficient technologies and processes that reduce the dependence and impact on ecosystem services, and may also have significant financial benefits.

Regulatory & legal

The introduction of new fines, user fees, government regulations or lawsuits by communities or groups that challenge business activities

From the production or provision of new goods or services that meet new regulations or opportunities to expand operations due to meeting license or planning requirements.

Reputational

Risks from media or non-governmental organisation campaigns, shareholder resolutions and changing customer preferences

From businesses being able to improve or differentiate their brand from competitors

Source: Natural Capital Coalition