Companies should heed the warnings of the new Business and Biodiversity Assessment – Inside track

This post is by Katie Leach, head of nature at Lloyd’s Banking Group and IPBES business and biodiversity assessment co-ordinating lead author.

A couple weeks ago over 150 governments gathered in Manchester to finalise the first Business and Biodiversity Assessment at the 12th Plenary of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES-12). This is the nature equivalent of the UN’s Intergovernmental Panel on Climate Change (IPCC). Its job is to assess the state of nature, show how it supports economies and societies, identify what is driving biodiversity loss and provide governments, businesses and civil society with evidence-based options for action. It brings together hundreds of scientists and knowledge-holders, including Indigenous experts, to produce global assessments that inform policy and practice.

While many of the messages of the recently launched Business and Biodiversity Assessment might not feel new to those who work on business and biodiversity, the fact that the assessment was approved by over 150 governments, with clear actions for companies, governments, financial actors and others, sends a very clear message. We cannot continue to treat nature as separate to our economies, nature is our economy and all businesses have an impact and depend on it.

Biodiversity loss is now recognised as a critical systemic risk that threatens the ability of businesses, local economies and whole sectors to function, with more than half of global GDP dependent on nature. Dependencies such as water, soil fertility and flood protection give rise to physical risks when degraded ecosystems reduce productivity or increase costs. Impacts, like land and sea use change and pollution, can push ecosystems beyond ecological thresholds, leading to long term or irreversible losses.

Alongside IPBES-12, The Department for Environment, Food and Rural Affairs (Defra) curated a parallel programme for UK businesses and financial institutions. It’s the first time this has been done alongside an IPBES meeting. Hundreds of businesses, consultancies and NGOs from across the UK travelled to Manchester for the Aviva and Defra Business and Finance Day and other events around it, including a breakfast roundtable held by my organisation, Lloyds Banking Group. The presence of so many was definitely felt by governments in the negotiation rooms and showed the assessment is something that both governments and businesses want.

These are ten key takeaways for businesses:

1. Nature is business critical
Building from the Treasury commissioned Dasgupta Review of the economics of biodiversity in 2021, the assessment highlights that what’s profitable for business now, but harms nature, will erode long term value.

2. From risk to opportunity
Businesses can reduce nature-related risks while unlocking new opportunities. As the UK is one of the most nature-depleted countries in the world, it is important for UK businesses to assess and manage their risks and opportunities.

3. The gap is stark
Fewer than one per cent of publicly traded companies globally report on how important nature is to their business. While the analysis hasn’t been undertaken for UK businesses specifically, it’s expected that most companies in the UK will not have reported on this.

4. Reporting is just the start
Disclosure matters, but real progress also depends on action and outcomes. The UK is moving towards mandatory sustainability reporting, aligned with International Sustainability Standards Board (ISSB) expectations, with further nature-specific requirements expected as ISSB develops its guidance. But this needs to be accompanied by action and long term outcomes for biodiversity across the UK.

5. Action can be taken now
The assessment synthesises 25 practical actions, from portfolio management and corporate strategy to site-level operations that can be taken now by all businesses across the UK.

6. This isn’t a data problem
Data and methods already exist to manage impacts on nature and strengthen business resilience. The UK boasts one of the world’s most comprehensive biodiversity data resources, with over a billion biological records freely accessible via the NBN Atlas, continually updated through collaboration between the government, research bodies and citizen scientists.

7. One size doesn’t fit all
There’s no single method suitable for all business decisions. The assessment sets out principles on what’s fit for purpose. The principles are the same regardless of whether you’re a UK business or based anywhere else in the world.

8. Better decisions come from better knowledge
Combining business insight, science and Indigenous and local knowledge leads to improved outcomes. In the UK collaborating with, and supporting local knowledge from, farmers, landowners and NGOs can significantly enhance action by businesses.

9. Action has ripple effects
Business leadership can shift behaviour across peers, suppliers, clients, customers and consumers. In the UK, leading businesses are already starting to address their impacts and dependencies, for example those involved in the UK Business and Biodiversity Forum, which is bringing together many leading businesses to drive progress.

10. It’s a team effort
Businesses can’t do it alone. The assessment outlines 100+ actions for governments, finance, civil society and others to ensure benefits for both businesses and nature.

These are the top 10 key insights from the assessment to date but, stay tuned, because soon, along with the other IPBES Coordinating Lead Authors, I will be releasing takeaways for specific groups: notably, banks, investors, insurers, primary production businesses and manufacturing, retail and distribution businesses.

As reported by Mongabay and others, the IPBES Business and Biodiversity Assessment is a major scientific and economic warning to the private sector. Biodiversity loss is not just an environmental issue, but a systemic economic risk affecting global markets, supply chains and financial stability. We need action now and the UK has a real opportunity to lead.

For more information on the assessment visit the IPBES website.

Photo by Ottr Dan on Unsplash