Cutting through complexity: Can biodiversity be embedded into corporate strategies?
In recent months, the importance of biodiversity in combatting the climate crisis has reached a new level understanding, with policymakers and academics peering into this complex topic to try and outline how the private sector can champion it. Here, edie hears from the businesses that have already enshrined regenerative practices into their business model.
We are reaching a crucial tipping point for nature. Amidst a perfect storm of population growth, mass urbanisation and escalating climate change, we must be smarter about the way we use our oceans, freshwater and land; and how we produce energy, food and other resources.
And yet, biodiversity, as a corporate and political concept, remains largely undefined. The publication of the Dasgupta Review on the Economics of Biodiversity is the latest major piece of work attempting to explore the role of natural capital in delivering planetary, societal and economic prosperity.
As Governments shift their focus towards the protection of the planet’s natural ecosystems, businesses are attempting to explore what this might mean for their own corporate stewardship efforts. One such exploration took place at last month’s Sustainability Leaders Forum, where businesses highlighted how to embed biodiversity as part of a holistic sustainability approach.
“Part of the issue [with biodiversity] is that its complex; in some places there’s still not enough evidence and we need to build this by coming together and exploring the benefits of this topic,” Nestlé’s head of value chain sustainability Andrew Griffiths says.
“There needs to be a building of confidence to enable businesses to go on this journey. The other key thing is that it can be a challenge for some sectors to really understand what your dependencies are on this.”
As a food firm, Nestlé is understandably reliant on biodiversity not just in driving profitability, but de-risking the value chain.
Last year, Nestle committed to halve its absolute emissions by 2030 and bring them to net-zero by 2050 and outlined plans for new investments in renewable electricity, carbon offsetting and regenerative agriculture.
The business is already working with more than half a million farmers and 150,000 suppliers to help them transition to regenerative agriculture. These methods are designed to mimic natural cycles, improving soil health and biodiversity. A strategic roadmap reveals that Nestle is on track to source more than 14 million tonnes of goods from regenerative farms by 2030.
Pernod Ricard is another business that is reliant on nature for its products and services. The beverage giant’s drinks are made using natural ingredients and that represents more than 250,000 hectares of land which produces more than 2.6m tonnes of crops annually.
Pernod Ricard is currently two years into a new strategy, of which a key pillar is “nurturing terroir” - broadly defined as the environmental factors that affect crops. That particular pillar sees Pernod Ricard targeting all of the group’s global affiliates – which include Chivas Brothers, Malibu and Absolut Vodka – to have strategic biodiversity projects in place.
The company’s vice president of global sustainability Vanessa Wright shares Griffiths’ sentiments that biodiversity is a complex concept for businesses to grasp, especially with many organisations still getting to grips with net-zero targets and social sustainability.
“One of the really key challenges is around knowledge in the business,” Wright says. “It’s another big leap to take the organisation on, even if it’s really part of the nature of our business. To talk about biodiversity and regenerative agriculture, when there are so many other topics that perhaps some feel the need to address first, isn’t easy.
“Taking the expertise from those who have it and helping to learn and create the capability to improve internally is what we’re doing.”
Pernod Ricard’s new 2030 "Good Times from a Good Place" strategy commits the firm to reducing the overall intensity of its carbon footprint by 50% by 2030, as part of the Science-Based Targets (SBTs) initiative – originally committed in September 2018. The company is also targeting improved water use in high-risk watersheds, such as India and Australia, and will replenish 100% of the water used in its production sites.
By 2025, the group will develop regenerative agriculture pilot projects within its own vineyards in eight wine regions - Argentina, California, Cognac, Champagne, Spain, Australia, New Zealand and China - to improve the quality of topsoil, watersheds and ecosystems. By 2030, Pernod Ricard will partner with more than 5,000 farmers to expand the learnings of these projects.
Wright notes that the company has been mapping its “terroirs”, of which there are more than 300, in an attempt to understand both the environmental and social issues attached to the places and biomes it relies on.
The company is also using the Task Force on Climate-related Financial Disclosures (TCFD) to “create a comprehensive risk mapping of all social and environmental considerations”.
Risk and reward
Indeed, the risks associated with not protecting and restoring nature are becoming more profound.
According to the World Economic Forum (WEF), $44trn – more than half of global GDP – is exposed to risks from nature loss. Similar research from WWF found that nature loss will cost the global economy at least £8trn by 2050 without transformational action from the public and private sectors, alongside governments.
Between 1980 and 2013 there were 12,012 recorded virus outbreaks globally. Factors spurring this trend are various and have been linked to a rise in trade and global connectivity and increased travel. As those factors rise, biodiversity falls, which is the crux of the issue.
Deforestation is linked to 31% of outbreaks such as Ebola, and the Zika and Nipah viruses. It assists in driving animals into human populations and away from their natural habitat, which in turn accelerates the spread of “zoonotic” diseases. Viruses like Zika, malaria and dengue fever have all been accelerated by climate change, according to the World Health Organisation.
It is clear the biodiversity touches on the environmental, social and financial pillars of business and that understanding its complexities will require collaboration.
Griffiths and Wright are firm believers that a collaborative approach is required if businesses are to truly understand and then act on their impact on biodiversity. Nestlé, for example, has already committed to deforestation-free supply chains for key commodities by 2022 and recently joined the Consumer Goods Forum’s ‘Forest Positive Coalition of Action’ as a founding member, along with the likes of Mars, General Mills, Danone and Unilever.
Nestlé is also an advocate for the Task Force for Nature-related Financial Disclosures (TNFD), spearheaded by the UK and Swiss Governments and by NGOs WWF and Global Canopy, which is aiming to publish a reporting framework in 2021.
The framework will provide corporates in all sectors with best-practice advice for measuring the financial risks they are facing as a result of the over-exploitation of natural resources (i.e. deforestation, overfishing, poor soil management) and as a result of extreme weather events.
“The TNFD will definitely help support efforts,” Griffiths says. “It will help businesses identify the scale of risk from a nature-based perspective and embed it into business models. In the more immediate term, we’ve been positioning very clearly what those risks are for us, also in terms of water and carbon.
“It enables us to take outcomes and build it into models. We don’t need to wait for the academic work to be done on what the specific financial value of biodiversity in a standardised way, while that does evolve, we can build the risk proposition into the business. If you can position it internally as risk, you can drive real traction.”
Indeed, an array of specialist organisations exist to help businesses examine the risks and opportunities associated with biodiversity.
The Woodland Trust is one such organisation and has recently partnered with edie to launch a business explains guide on the topics of biodiversity.
The organisation has partnerships with the likes of Lloyds and Sainsbury’s to help them map, understand and act on biodiversity at key hotspots and for Abi Bunker, director of conservation and external affairs, businesses need to include nature as part of the resource efficiency debate and as part of efforts to respond to the climate crisis.
“We’re seeking to engage at all scales to influence policy,” Bunker says. “It’s not just about tackling climate change by looking at tree planting in isolation, its also to encourage and make the case that landowners, policymakers and businesses really take the hint about a joined-up approach to nature crisis and the climate crisis.
“The evidence shows we have neither the time nor the money nor the land for us to be wasting our efforts, so seeking ways to build our understanding to maximise our resources through policy and funding through collaborative approaches to these challenges.”
Fortunately, it appears that enabling policies could well be on the horizon.
In the UK, The Environment Bill was due to return to Parliament in January, but the Government has confirmed that it will be delayed once more. When the Bill is finally approved, it will provide legally binding targets for air quality, water quality, waste and biodiversity, spanning 2022 to 2030.
The EU is in the process of developing its Biodiversity Strategy through to 2030 as part of its €750bn Covid-19 recovery package and globally, it has been confirmed that a COP conference for the Convention on Biological Diversity (CBD) has been pushed back to October 2021. It is hoped the conference would be used to create a “Paris-style” agreement to halt Earth’s sixth mass extinction through a biodiversity pact.
There will be no business on a dead planet, and these frameworks will help shift corporate focus towards regenerative practices whereby natural elements associated with farming are regenerated through new systems. Pernod Ricard’s “terroir” approach is one example, but outdoor clothing brand Timberland 'net-positive' leather sourcing, Kering’s fashion industry standard capable of verifying raw materials and finished products as 'regenerative' and General Mills’ supply chain programme are just some examples of how companies are moving from the mitigation environmental degradation to regenerative approaches.
The private sector needs more examples of this approach, and it is clear that collaboration, shared learning and advocacy will be key to delivering a regenerative future.
edie Explains biodiversity and business
What is biodiversity? What is the relationship between biodiversity and business? What are the business challenges surrounding biodiversity? And, what are the business opportunities surrounding biodiversity? This new edie Explains guide answers all of these key questions and more.
The guide, produced in association with the Woodland Trust, answers all of the questions that businesses might have in relation biodiversity, a topic that is rising in prominence in the build up to COP26 and beyond.
The guide features a case study from the Woodland Trust, outlining how they’ve worked with corporates to help create a better understanding of the risks and opportunities of acting on biodiversity.