Words by Margot Greenen
“The corporate world will come under increasing pressure to disclose its impacts on nature, and to demonstrate that it is working to address them”
All human systems rely intrinsically on natural ones
Biodiversity loss will have far-reaching implications for all businesses, not only by disrupting supply networks but by destabilizing societies and markets. According to the World Economic Forum (WEF), over half of global GDP is generated by industries that are highly or moderately dependent on nature, whether because they extract resources from forests or oceans, or because they rely on ecosystem services such as healthy soils and clean water. Most other sectors are indirectly reliant on nature via their supply chains — the WEF uncovered significant hidden dependencies among industries such as real estate, aviation, tourism and consumer goods too.
The world is watching
Following the historic agreement to protect and restore biodiversity at COP 15 in December, the corporate world will come under increasing pressure to disclose its impacts on nature, and to demonstrate that it is working to address them. We anticipate a wave of legislation to impose stricter rules, on the use of specific habitats, and on reporting requirements and subsidy reforms, to name just a few. Many countries have already started — for example, the UK now demands that all developments achieve a 10% biodiversity net gain. Early adoption can pre-empt much greater costs of compliance later on, and by engaging with governments, business can help develop policies and incentives that are better adapted to their needs.
For every risk, there is an equivalent opportunity
Biodiversity loss presents a range of operational, regulatory, investor and reputational risks. But recognizing and mitigating these also opens the door to new sources of value. Implementing nature-based solutions can be more cost-effective than traditional grey engineering solutions. For a water utility, planting reed beds can not only enrich local ecosystems, but also reduce treatment costs and improve supply reliability. Recreating natural ecosystems on old mining sites is a relatively easy and cost-effective way to reduce rehabilitation liabilities, while enhancing flora and fauna and creating local jobs. A proactive approach can also uncover new high-value, low-competition revenue streams: in anticipation of new rules on invasive species, Alfa Laval worked with regulatory body the International Maritime Organization to develop a first-to-market ballast-water treatment system that removes unwanted marine organisms without chemicals.