What is biodiversity?
Let us start off by saying it isn’t just about planting trees and calling it quits. It’s not just a chapter in a school textbook, or something that enhances our weekend recreational pursuits.
In fact, it is so important that protecting and restoring life is one of the UN’s Sustainable Development Goals; biodiverse ecosystems are our life support network, not only providing essentials such as clean air and water, but also maintaining soil fertility and crop yields.
“We can think of biological diversity as the ‘infrastructure’ that supports all life on the planet. When we lose species through extinction, the web of life is destroyed and this in turn affects the resilience of the ecosystems and nature’s capacity to provide the services that humans benefit from.”
(Source: Cristiana Pasca-Palma, Executive Secretary of the Convention of Biological Diversity)
As every investor knows, the more diverse your portfolio, the less risk. Apply that same philosophy to protecting and restoring the Earth’s natural habitats and their intertwining components - the more diverse our planet’s ecosystems, species, and gene pools are, the less susceptible they are to collapse.
How does it relate to businesses?
Biodiversity loss is among the highest-impact risks of the next decade and has come to threaten the foundations of our economy, with “critical implications for humanity, from the collapse of food and health systems to the disruption of entire supply chains…” (Source: WEF 2020 Global Risks Report)
In essence, biodiversity does not belong solely in businesses’ sustainability action plans to flippantly claim carbon neutrality, but should be woven into risk management and supplier collaboration strategies in industries across the globe. By embedding biodiversity into policy and aligning themselves with nature, businesses will not only be able to reduce their exposure to risk, but also take advantage of opportunities for new eco-efficient products and services within our carbon and natural resource constrained world.
The restoration and sustained management of biodiversity also happens to be one of the most effective ways of keeping global heating below 1.5oC. This means that corporate biodiversity accountability plays a crucial role in ensuring global temperatures move in the right direction.
How to approach biodiversity accountability through supplier collaboration
Knowing how to measure and understand nature-related risks to business and their supply chains remains a challenge.
Here’s how you can start:
1. Understand how exposed your business is to risk via biodiversity loss, by first identifying where both the impacts and dependencies on nature lie across your supply chain (and thus where risk and opportunities arise from those impacts and dependencies).
2. Understand and assess how committed your suppliers are when it comes to approaching biodiversity. The awareness and the readiness of each supplier will be different, as will their knowledge, so targeted communication is extremely worthwhile at this stage of the process. Only then can you create SMART goals, using conservation science to develop commitments, meaningful indicators, and targeted activities across your supply chain.
Verifiable indicators are needed here, in order to assess the outcomes with limited ambiguity (e.g., an area of habitat restored or protected), rather than just disclosing activities such as “managing impacts”, “nature-friendly practices”, “restoring biodiversity”, or “investing in biodiversity”.
Whilst nearly half of Fortune 100 companies reference biodiversity within sustainability reports, only 5% had set SMART goals. No companies reported quantitative outcomes, making it difficult to determine whether the actions were of sufficient magnitude to achieve positive outcomes for nature.
(Source: Addison et al, 2018)
3. Collect the data and analyse performance against your SMART goals. This will give an indication of where you and your suppliers are when it comes to corporate biodiversity activity and accountability.
4. Sustain continuous engagement with suppliers’ key stakeholders to make sure they understand and are kept up to date with key information about nature-based solutions and biodiversity best practice, which will enable suppliers to better align with your own business’s policies, goals, and vision.
5. Keep track of supplier performance and transparency by holding your suppliers accountable to their commitments using a scoring system. This will ensure that both you and your suppliers are able to monitor performance against expectations.
6. Commercialise your hard work by letting your customers and clients know your commitments, activities, and success in managing biodiversity. Genuine achievements and transparency about your business’ supply chain accountability and own operational activities is excellent for your brand reputation.