Melbourne Business School News What business leaders need to know about biodiversity

What business leaders need to know about biodiversity

There are five steps organisations can take to contribute to an equitable, nature-positive world, says Dr Gary Veale.

Dr Gary Veal biodiversity business

While most organisations and their leaders are educated on the climate crisis, and are striving towards net zero, less is understood about the biodiversity crisis – but it is real and it's impacting business already.

The good news is that much can be done, and business leaders have an incredible role to play.

The theme of this year's World Environment Day on 5 June is #GenerationRestoration, focusing on land restoration, desertification and drought resilience. Land restoration is a key pillar of the UN Decade on Ecosystem Restoration from 2021 to 2030.

It's also an opportunity to take a quick look at why, and what you might do to address the biodiversity crisis.

Are we really that dependent on nature?

Yes. Every business relies on nature for resources and so called 'ecosystem services' such as water, food, pollination of crops, water filtration and climate regulation – both for their operations and supply chains, and for their employees and customers.

A 2022 report by the Australian Conservation Foundation found that roughly half of Australia's GDP – 49% or $896bn – has a very high direct dependence on nature.

The report also found that, indirectly, every dollar in the Australian economy depends on nature in one way or another. Sectors such as retail, government and healthcare depend on nature through their value chains, as well as through their people, customers and other stakeholders who need clean air and water, sustenance, their health and a stable climate.

Next time you're in the supermarket, try to imagine all the nature-dependencies that exist in generating electricity to power the store; producing and packaging the products that sit on the shelves; transporting the products behind the scenes, and so on. It's mind-boggling.

Is there really a biodiversity crisis?

Yes. The biodiversity crisis is well evidenced. A landmark report from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services – compiled by 145 expert authors from 50 countries, and released in 2019 – found that: "The health of ecosystems on which we and all other species depend is deteriorating more rapidly than ever. We are eroding the very foundations of our economies, livelihoods, food security, health and quality of life worldwide."

The report provides the most comprehensive assessment of its kind and found over 1 million species to be threatened with extinction.

In the Australian context, research reveals that 17 of our ecosystems are at risk of collapse including the Great Barrier Reef, the Mediterranean forests and woodlands of Western Australia, the Murray Darlin River Basin riverine and the Gondwanan conifer forests of Tasmania.

As Tanya Plibersek, Federal Minister for the Environment and Water, put it: "The prospect of accelerating decline should alarm us all. Our economy, our livelihood and our well-being all depend on the health of the natural world. And our current demands on nature exceed its capacity to survive and thrive."

Is it too late to make a difference?

The answer is firmly no. Much can be done, at every level from local to global. At a global level, we now have an international agreement, signed in 2022, to protect 30 per cent of land and oceans by 2030, and action across various parts of the Kunming-Montreal Global Biodiversity Framework.

For countries such as Australia, a signatory to this agreement, this commitment and framework is informing policy-making and action.

In recent years, climate change has become a material issue for many organisations; meaning that it is increasingly important to stakeholders and success. Alongside climate change, we are now seeing the same happen with biodiversity – firstly, because of nature-related risks and opportunities ('outside in' materiality); and secondly, because of the potential impact of business actions or influences, negative or positive, on the natural world ('inside out' materiality).

What does it mean to be nature-positive?

The term 'nature positive' describes circumstances where nature – including species and ecosystems – is being repaired and is regenerating, rather than being in decline.

A nature-positive approach enriches biodiversity, stores carbon, purifies water and reduces pandemic risk. In short, it enhances the resilience of our planet and our societies.

In 2021 at Cornwall in the UK, G7 leaders announced that "our world must not only become net zero, but also nature positive, for the benefit of both people and the planet".

As articulated by the World Economic Forum: "This represents a real paradigm shift in how nations, businesses, investors and consumers view nature. In the past, the mantra among a growing number of inspired leaders has been to do less harm, to reduce impact and to tread lightly... but now there is a new worldview gathering pace: 'Nature positive.' This asks: 'What if we go beyond damage limitation? What if our economic activities not only minimise impact, but also enhance ecosystems?'"

In a business context, that looks like companies agreeing to improve the quality of nature under their control. In Australia, the most prominent company to adopt a nature-positive pledge so far is BHP, which promised in June 2022 to place 30 per cent of its land under some form of environmental protection.

Nature positive lags its climate-related equivalent, net zero, but continues to gain increasing attention amongst investors, businesses, and other stakeholders – a trend that will almost certainly continue given the pressing nature of the biodiversity crisis.

Sitting alongside the widely-adopted, investor-led climate disclosure framework – Taskforce for Climate-related Financial Disclosures – many organisations have been following the emergence and piloting of an equivalent nature-related framework, the Taskforce for Nature-related Financial Disclosures.

What should businesses be doing?

There are five high-level steps that organisations can take to help reverse nature loss and contribute to an equitable, nature-positive world, where positive impacts outweigh negative ones.
They are:

  1. Assess – measure, value and prioritise your impacts and dependencies on nature to ensure you are acting on the most material ones.
  2. Commit – set transparent, time-bound, specific, science-based targets to put your company on the right track towards operating within the Earth's limits. 
  3. Transform – contribute to systems transformation by avoiding and reducing negative impacts on nature, restoring and regenerating nature where possible, shifting your business strategy and models, advocating for nature-based policy and embedding your strategy within your corporate governance. You should also think about how you can collaborate with other players along your value chain, as well as across land, seascapes and river basins where you operate and source from.
  4. Disclose – publicly report material nature-related information throughout your journey.
  5. Upskill – build your workforce so you have internal capacity and capability to act on nature-positive initiatives.

The Business for Nature coalition provides a range of materials that can be useful if you're looking to start taking these steps or making sense of nature-positive business activities. Its partners include many organisations shaping the future of business and nature strategies and disclosures around the world.

The coalition offers detailed guidance for a range of industry sectors – for instance, priority actions and opportunities for organisations in the financial services sector.

You can also get in touch with our Centre for Sustainability and Business, which partners with organisations like Bain & Co, NAB and Intrepid Travel to support their sustainability, climate and biodiversity journeys.

The Centre is currently developing a range of short courses for business leaders on nature positive. If you would like to register your interest, contact Alex Roberts

Dr Gary Veale is Executive Director of the Centre for Sustainability and Business and holds a PhD in the role of nature in unlocking human potential, as well as corporate responses to nature.

To learn more about what sustainability means for your organisation, visit the Centre for Sustainability and Business page.

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