As companies face increasing scrutiny over their environmental impact, biodiversity management and conservation have emerged as vital components of their sustainability strategies. Recognising the significance of biodiversity for business sustainability is the first step towards definitive change. The conservation of biological diversity is a subject of critical importance. But action on this front has been slow.
The latest report from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services points to a substantial decline of the ecosystem and associated diversity over the years, primarily resulting from a myopic predilection for short-term economic gains. Annual global risk reports published by the World Economic Forum repeatedly highlighted “biodiversity loss and ecosystem collapse” as one of the top 10 risks, particularly in the longer run.
Biodiversity and Businesses
Biodiversity plays a vital role in shaping the business landscape. It provides essential ecosystem services, such as pollination, soil fertility, water purification and climate regulation that benefit agriculture, forestry, pharmaceuticals, food and beverage, meat and poultry and other sectors. Companies must assess and manage their impacts on biodiversity to ensure sustainable use of natural resources across their value chain. By conserving and restoring biodiversity, they eventually contribute to building climate resilience within their supply chains and reduce their vulnerability to climate-related disruptions.
By aligning their products and services to environmentally conscious consumer preferences, businesses gain a competitive edge and carve out new avenues for economic growth and innovation. By proactively addressing biodiversity-related risks, they avoid regulatory non-compliance and potential reputational damage, safeguarding their brand value and financial stability.
Keeping biodiversity as one of the key ESG performance parameters, companies not only secure essential ecosystem services but also future-proof their operations, adapt to environmental changes easily and gain access to financing and investment opportunities by enhancing credibility with responsible investors, both within and outside the country.
Conducting comprehensive assessments is the first step to effectively address biodiversity concerns. One of the key challenges is usually related to data availability and standardisation. Collaboration with industry peers and governments helps develop common standards and metrics for biodiversity-related disclosure as well as for sharing best practices.
As the next step, companies need to establish conservation targets and action plans based on the assessment findings. These plans require the integration of biodiversity considerations into decision-making, supply chain management and several related operational practices. Engaging stakeholders is crucial for effective biodiversity management. Collaborating with conservation bodies, civil society organisations, governments and local communities leverages expertise and resources to protect ecosystems. Corporate partnerships with conservation organisations mobilise financial resources for habitat preservation. Community-based initiatives foster positive relationships, trust and shared values.
Some key elements for promoting ecosystem preservation through responsible sourcing include assessing supply chain partners, ensuring sustainable sourcing of raw materials, including biodiversity as a criterion for supplier selection, and supporting ethical wildlife trade practices.
The India Landscape
India relies significantly on agriculture and the processing of agro-produce for addressing food security. Protecting and enhancing biodiversity in agricultural practices leads to improved crop resilience, pest control and soil fertility, ultimately boosting productivity and ensuring long-term sustainability. All sectors, including pharmaceuticals, biotechnology, infrastructure development, energy, mining and manufacturing, need to recognise the importance of a biodiversity management strategy to mitigate environmental risks.
The Biological Diversity Act, 2002, provides the legal framework for the protection and conservation of biodiversity and its sustainable management in India. The Ministry of Environment, Forest and Climate Change has issued guidelines and notifications to promote biodiversity disclosures and integrate biodiversity considerations into business decision-making processes. Under the Companies Act, 2013, certain companies are mandated to disclose their environmental impact, including biodiversity-related information, in their annual reports. The Business Responsibility and Sustainability Reporting guidelines issued by the Securities and Exchange Board of India also require top listed companies to disclose their operations in ecologically sensitive areas, such as designated national parks, wildlife sanctuaries, biosphere reserves, wetlands, biodiversity hotspots, forests and coastal regulation zones.
These well-intentioned legal requirements aim to enhance transparency, accountability and awareness among businesses regarding their impact on biodiversity. The regulatory landscape is expected to evolve in line with the awareness about biodiversity, fostering enhanced biodiversity disclosures and encouraging responsible business practices.
Corporate Sustainability and Biodiversity
The effects of the loss of biodiversity on businesses across their value chains will be significant and widespread. Future businesses will need to integrate this aspect into their sustainability strategy and planning for business continuity. Demonstrating this commitment and enhancing transparency and accountability will be equally important for building trust among stakeholders.
The integration of natural capital accounting and nature-based solutions is an emerging trend that can further enhance the effectiveness of biodiversity conservation efforts. Natural capital accounting allows companies to quantify ecosystem services and incorporate them into their decision-making. Embracing biodiversity through comprehensive assessments, setting conservation targets, engaging stakeholders and adopting sustainable practices allows companies to contribute to the preservation and restoration of ecosystems while safeguarding their future. By prioritising biodiversity as a fundamental element of their sustainability strategies, businesses can foster a harmonious relationship between corporate practices and the natural world, paving the way for a more stainable future.
Source : Outlook Business