A landmark analysis, three years in the making, has laid bare the extent to which economics will fail without a healthy environment.
The Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) Plenary met in Manchester last week for its 12th session. Dubbed ‘COP for nature’, the global gathering saw the organisation’s latest report unveiled, which looks at the impact of business on the environment, and vice versa.
The assessment was prepared by 79 leading experts in 35 countries, covering all regions of the world. According to this, biodiversity has been devastated by the human economic system. And, in turn, biodivesity loss is now an existential and pervasive systemic threat to the ability of that economy to function properly.
‘The current conditions in which businesses operate are not always compatible with achieving a just and sustainable future,’ a statement from IPBES read. ‘Businesses often face inadequate or perverse incentives, barriers that hinder efforts to reverse nature’s decline, an institutional environment with insufficient support, enforcement and compliance, as well as significant gaps in data and knowledge.’
‘This Report draws on thousands of sources, bringing together years of research and practice into a single integrated framework that shows both the risks of nature loss to business, and the opportunities for business to help reverse this,’ said Matt Jones, one of three Co-chairs of the Assessment.
”This is a pivotal moment for businesses and financial institutions, as well as Governments and civil society, to cut through the confusion of countless methods and metrics, and to use the clarity and coherence offered by the Report to take meaningful steps towards transformative change,’ he continued. ‘Businesses and other key actors can either lead the way towards a more sustainable global economy or ultimately risk extinction…both of species in nature, but potentially also their own.’
The IPBES report includes some troubling numbers. An estimated $7.3 trillion in public and private finance currently fuels schemes which are directly harmful to the environment and nature. More than half of this comes from the private sector.
In comparison, only $220 billion goes towards supporting projects which are beneficial to the planet, such as conservation and restoration. Overall, this represents just 3% of publicly funded incentives that have an adverse impact.
‘The loss of biodiversity is among the most serious threats to business,’ said Professor Stephen Polasky, Co-chair of the Assessment. ‘Yet the twisted reality is that it often seems more profitable to businesses to degrade biodiversity than to protect it.
‘Business as usual may once have seemed profitable in the short term, but impacts across multiple businesses can have cumulative effects, aggregating to global impacts, which can cross ecological tipping points,’ he continued. ‘The Report shows that business as usual is not inevitable — with the right policies, as well as financial and cultural shifts, what is good for nature is also what is best for profitability. To get there, the Report offers tools for choosing more effective measurements and analysis.’
Access to reliable data, modelling, and scenarios were cited as the three biggest barriers to increased uptake of nature related risk assessment of capital spend. Compounding this is the fact that no single approach to measurement is suitable for all organisations, and therefore multiple metrics are necessary. Three methods have been proposed to assess which approaches are most appropriate for individual businesses. These are:
•Coverage – geographic, and the extent of impacts and dependencies
•Accuracy – results must correctly describe what they are designed to measure
•Responsiveness – the ability of the method to detect changes that can be attributed to the actions and activities of the business
‘Better engagement with nature is not optional for business — it is a necessity,’ said Professor Ximena Rueda, Co-chair of the assessment. ‘This is vital for their bottom line, long-term prosperity and the transformative change needed for a more just and sustainable future.
‘To avoid greenwashing though, it is essential that businesses have transparent and credible strategies, which clearly demonstrate their actions and how they contribute to biodiversity outcomes and that they publicly disclose their impacts and dependencies as well as their lobbying activities,’ they added.
Actions taken at an organisational level not only have the capacity to deliver positive outcomes directly, but messaging around these can act as signals to encourage behavioural change in others. Steps should also be pursued across corporate, operations, value-chain and portfolio levels. Business-relevant data, data accessibility and transparency, completeness of evidence, adoption of methods, and applicability of methods were found to be major knowledge gaps that need to be overcome in order to guarantee effectiveness.
Although businesses, including major financial institutions, have a responsibility to improve their footprints and change dependencies to become more nature-positive, the IPBES Plenary made it clear that corporations cannot deliver change at the necessary scale alone. Instead, collaboration, collective and individual actions are essential to create an ‘enabling environment’. Work must be done to improve policy, legal and regulatory frameworks, economic and financial systems, social values, norms and culture, technology and data, and capacity and knowledge.
Image: Marco Sellitto / Unsplash
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