Biodiversity Loss a Significant Business Risk
The loss of biodiversity through the extinction of species poses a significant risk to business profits, according to a recent survey by PricewaterhouseCoopers.
According to the survey, The Economics of Ecosystems and Biodiversity (TEEB), more than half of businesses see species loss impacting their bottom line in some countries, while about 80 percent of consumers said they would stop buying products from companies that do not take biodiversity seriously. Overall though, only 25 percent of CEOs said they considered the loss of biodiversity to be a strategic business issue. The U.N. defines biodiversity as including not just variability between species, but within species and between ecologies.
One significant manifestation of how biodiversity loss can have an effect on businesses is the massive die-off among pollinating species currently occurring in North America and Europe. Â The economic value of insect pollinators is estimated at $189 billion, the cost that would be required to replace pollinators of all species go extinct. The report estimated the economic value of damage done by the top 3,000 listed global companies to the biosphere at $2.2 trillion annually. The economic value of forest loss to businesses, meanwhile was estimated at between $2 – $5 trillion.
Still, the value of biodiversity remains a primarily regional issue, with the majority of South American executives expressing concern over the matter, while only 15 percent of U.K. executives did. Only two of the largest 100 companies described biodiversity and habitat loss as strategic issues.
The TEEB report cites the case of the multinational mining giant Rio Tinto as one company that has committed itself to achieving Net Positive Impact on biodiversity. In association with leading conservation experts the company has developed new ways of assessing the biodiversity values of its land holdings, and has begun to apply biodiversity compensation or ‘offset’ methodologies in Madagascar, Australia and North America.
Other companies with similar commitments on biodiversity include Walmart (Acres for America initiative), Coca Cola (water neutral by 2020) and BC Hydro (no net incremental ecological impact).
In addition to minimizing and mitigating adverse impacts, business can also generate revenue from conserving biodiversity and delivering ecosystem services. Agriculture, forestry and fisheries all depend on healthy ecosystems to ensure healthy profits.
The tourism sector has a major stake and role to play in conserving biodiversity. Realising its reliance on the biodiversity rich but fragile coral reefs, Chumbe Island Coral Park Ltd in Tanzania has invested over US$ 1.2million to establish a marine park to protect the corals surrounding Chumbe Island. The company actively supports park management as well as its own resort facilities.
Several tools are being developed to help businesses account for their impact on biodiversity in the same way that they can now account for their carbon emissions. The total value of all services provided by a functioning biosphere was calculated to be $33 trillion a year.
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