A growing body of research is showing that there are financial risks associated with biodiversity impacts. However, wider awareness of this remains low in the business community. We now need to work closer together to raise this awareness, said entrepreneurs and researchers at a seminar organised by the Confederation of Swedish Enterprise.
Many businesses, some of which have not traditionally been used to managing risk, are currently Many businesses, some of which have not traditionally been used to managing risk, are currently extremely vulnerable to sudden shocks in areas such as the environment and climate. This was the message delivered by the researcher Mark Sanctuary, in his presentation at the Confederation of Swedish Enterprise’s seminar on business dependence on natural resources and biodiversity. More specifically, he demonstrated how Swedish companies were indirectly affected by the floods in Thailand in 2011.
“Our research has shown that for every Swedish krona (SEK) that failed to reach Sweden because of the floods, Swedish companies missed out on three Swedish kronor in sales,” he explained.
Sanctuary, who is Associate Professor at the KTH Royal Institute of Technology, is one of a growing number of researchers examining how the destruction of ecosystems at local, regional and global levels can increase business risks globally.
On the same topic, Adis Dzebo, Senior Research Fellow at the Stockholm Environment Institute, pointed out that the current quest to meet climate targets on time is - paradoxically - contributing to biodiversity loss. Rampant competition for food, minerals and renewable energy in order to realise the climate transition has been identified as an underlying cause.
“We want to show how this increased demand spreads risks throughout the supply chain, from production to consumption. Therefore, I think we need to shift our focus; we need to look not only at how we can increase production but also how it can be complemented with sustainable consumption and recycling,” says Dzebo.
The seminar was held less than a month before the UN Convention on Biological Diversity, COP16, which takes place in Cali, Colombia in October.
Romina Pourmokhtari, Minister for Climate and Environment took part in the seminar, and her view prior the upcoming COP16 is that the meeting will be a test as to whether the world’s countries can live up to the commitments they made at COP15 and the signing of the so-called ‘Kunming-Montreal Global Biodiversity Framework’.
“COP16 will be the first critical checkpoint for how to implement what we managed to agree upon during COP15. We need to put in place a forward-looking decision that will strengthen the link between climate, biodiversity and pollution work in the long term,” she said.
“At the same time, we need to step up the work at the local level, and ensure that more businesses understand the relationship between protecting biodiversity and how it will affect their own operations,” said Ms Pourmokhtari.
“Currently, the link between climate change and business is explicit. However, this degree of clarity is not as great when it comes to biodiversity, and I think that this is one of the knots we need to unravel in the coming years,” she concluded.
So, how can a company start working to promote biodiversity? Elin Larsson, head of business at WWF, says that her organisation has developed a risk filter tool, which helps companies to improve their overview of their value chains and to identify potential risks of biodiversity loss.
“We also do this by raising awareness through our Living Planet Report, which is published every year. It is a method of measuring biodiversity and is an important part of our outreach to all stakeholders,” says Elin Larsson.
The good news, according to Albert Askeljung, Programme Manager for Environment and Climate at the UN Global Compact, is that business engagement on biodiversity has increased in recent years, especially in the EU.
“Large companies, such as GSK, Holcim and Tetra Pak – as well as smaller companies -are starting to address this issue seriously and are now publishing biodiversity strategies. We also see that small and medium-sized enterprises are asking for more help and support on the topic. There is a great deal of interest in this issue, and in the future we will invest strongly in different types of training programmes and similar,” he said.
The seminar’s business panel was also confirmed industry’s interest in biodiversity. The panel included Åsa Domeij, Head of Sustainability at Axfood, Sara Lindahl, Sustainable Finance Expert at Danske Bank and Johan Melinder, Head of Sustainability at Fazer. One of the greatest challenges that they highlighted was the fact that awareness of biodiversity continues to vary greatly between industries.
“Even internally, we realise that biodiversity is not so easy to understand for those who don’t have a scientific background. If you enter our shops and ask an assistant for advice on biodiversity, it can often be difficult to get an informed answer. Of course, I wish that this weren’t the case, but I think that you have to respect the fact that these are difficult issues, and that it can take a little longer to make an impact,” said Åsa Domeij, head of sustainability at Axfood.
“The forestry and mining industries are among those sectors that have made great progress with concrete measures and measurable goals. However, if we look at the entire business sector, it’s clear that we still face significant challenges,” says Sara Lindahl, sustainable finance expert at Danske Bank
She continued, “We have conducted a study of the largest Nordic companies that we believe are dependent on ecosystem services and found that 16 percent do not mention biodiversity in their reporting at all”.
A crucial prerequisite for companies to meet these revised targets is to ensure they are measurable. That’s why Sara Lindahl, like others on the panel, believes that the solution lies in developing relevant key performance indicators. With so-called Key Performance Indicators (KPIs), we can measure and monitor progress more effectively.
“From the bank’s perspective, we want that single figure; one that we can measure and monitor. There are many people and many different ways of reporting, which makes it difficult for us to know who is ahead of their goals and who is behind in their work.”
However, we shouldn’t get overly bogged down in measurement systems. According to a number of entrepreneurs, we also need to focus on what we can already do today.
“We need to skip the complex KPIs and instead go straight to engagement. Dig ditches during working hours, grow crops during working hours. We can set a KPI for that,” said Johan Melinder, Sustainability Manager at Fazer.
“There are many things that we can already measure and monitor today. Our industry has long measured the development of those forest structures that are important for biodiversity. It doesn’t tell us exactly how species are affected at the genetic level, but it’s still something to work on,” added Magnus Berg, head of industrial policy at the Swedish Forest Industries Federation.
“Clearly, the discussion on how more people can contribute to biodiversity targets is crucial. This will be central to COP16 and the work ahead,” said Romina Pourmokhtari.
“Your knowledge and your drive for entrepreneurship and innovation will be crucial if we are to succeed in mobilising the level of commitment needed for such change,” she added.
Biologisk mångfald