Why are Biodiversity and Ecosystems important for Business?

The results of the Millennium Ecosystem Assessment identified six interconnected challenges that are of particular concern for businesses as these affect the integrity of ecosystems and their capacity to provide key services (namely provisioning of goods such as food, fiber and water; regulating biophysical processes; cultural services providing recreation, aesthetic or spiritual values; and supporting processes such as soil formation, nutrient cycling etc).

Key challenges for businesses are water scarcity, climate change, habitat change, biodiversity loss and invasive species, overexploitation of oceans and nutrient overloading.

The impacts of Business on biodiversity pose a number of risks to corporate performance including in the following areas:

  • Operational: increased scarcity and cost of raw materials such as freshwater; disruptions to business operations caused by natural hazards; and higher insurance costs for natural disasters.
  • Market: customers switching to sustainably sourced or certified products and governments implementing new sustainable procurement policies.
  • Regulatory: emergence of new government policies such as taxes and moratoria on extractive activities.
  • Reputational: damage to corporate reputation from media and NGO campaigns, shareholder resolutions and changing customer preferences.
  • Access to capital: restrictions as the financial community adopts more rigorous investment and lending policies.

These risks clearly have an impact on a business’ bottom line and yet many companies fail to recognize the link between healthy ecosystems and their organization’s interests. While some companies have taken steps to address their environmental impacts, most are not fully aware of their dependence on ecosystem services and the possible business implications of degraded services.

Guidelines such as the Convention on Biological Diversity’s Strategic Plan for 2011‐2020, including the 20 Aichi Biodiversity Targets, defines a roadmap for reducing pressures on biodiversity and restoring ecosystems and also emphasizes the importance of integrating biodiversity and ecosystem management into all sectors of society. Business has an important role to play in implementing the Strategic Plan and contributing to the global vision and targets for biodiversity.

What are the benefits for Business of working with IUCN?

Growing awareness of these impacts and dependencies is leading many companies to measure and manage the risks and to engage in mitigation, offsetting and sustainable use approaches. Businesses are also increasingly aware of the opportunities that exist in the development of new biodiversity‐friendly markets, sustainable technologies and business models.

By working with IUCN businesses can address their environmental footprint, companies will also be able to manage risk and open new opportunities. In particular they would:

  • Increase revenue by responding to an increased consumers’ demand for responsible products
  • Obtain the license to operate by addressing civil society’s concerns at local and global levels
  • Preserve and enhance the “natural,” capital (including the capacity to provide ecosystem services)
  • Attract and retain talented staff/people, increasing environmental credentials and values of companies
  • Improve the quality of products and services
  • Pre-empt regulations and public pressure
  • Make cost savings by a more efficient use of natural resources
  • Improve access to financial capital
     

For more information on how IUCN BBP works with business please view: