What is your company’s biodiversity impact?

A recent report published by PwC Netherlands in conjunction with the Association of Investors for Sustainable Development sheds light on an increasingly urgent challenge for businesses: biodiversity loss. Broadly defined as a decline in the number and variety of living organisms, biodiversity loss is caused by several interconnected factors, such as climate change, pollution, land use for unsustainable mining or farming, and overexploitation through activities like fishing. Biodiversity is essential for the resilience of natural ecosystems—and natural ecosystems are essential to business: 55% of global GDP is moderately or highly dependent on them, according to a PwC estimate. That fact, combined with demands for environmental action on the part of a wide range of stakeholders and regulators, makes biodiversity loss a problem business leaders can’t afford to ignore.

And yet too many are, according to PwC’s 27th Annual Global CEO Survey. When the survey asked 4,702 chief executives how much progress they were making on critical climate actions (see the chart above), nature-based solutions—which are key to stemming biodiversity loss—landed at the bottom of the ranking. 

The biodiversity report, which cites research by the World Wildlife Fund estimating that 1 million species are currently threatened with extinction, lays out a few principles that can help business leaders to rise to the challenge:

• Start with vision at the top. Board members and senior management need to understand the complex, multidimensional nature of biodiversity and translate it into a strong, linear strategy and message. Clear messaging can help overcome a reluctance to treat biodiversity as a business-critical issue, and it can empower finance teams to increase resource allocation to biodiversity initiatives.

• Set SMART targets and incentivise action. Biodiversity loss is caused by a multiplicity of factors, from water consumption to noise pollution, making impact harder to measure than, say, carbon emissions. But by closely examining activities—such as land use or the discharge of pollutants—across the full supply chain, leaders can begin to establish specific, measurable, achievable, relevant and time-bound (SMART) targets for limiting those activities that impact biodiversity. Attainment of those targets can serve as a framework for initiating company-wide action, and can even be integrated into reward and compensation considerations.
• Capture biodiversity and climate synergies. Climate change and biodiversity are deeply interconnected, but mitigating against the former doesn’t always benefit the latter. For example, electric vehicles reduce emissions, but mining the critical minerals needed for EV batteries can in some cases threaten species diversity. Wherever possible, focus on nature-based climate solutions, like reforestation, as a complement to decarbonisation, and be mindful of the trade-offs.

Nature and biodiversity may be under-prioritised by business leaders, but the potential for progress is enormous. Embarking on the above steps while starting with the doable—regreening office campuses, say—is a way to lead by example and spur recovery and restoration.