“Biodiversity impacts everyone. Now biodiversity loss will become a chief concern for all businesses, in particular those with far-reaching supply chains that significantly depend on, and have responsibility for, nature impacts,”
Drivers for reversing biodiversity loss
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- 50% of global GDP or $58 trillion is highly or moderately dependent on nature and its services*
- 50,000 to 70,000 plant species are used in medicine **
- 100 million tonnes of aquatic wildlife are fished annually**
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- Nearly 25% of all species are threatened with extinction
- Natural ecosystems are decreasing by an average of 47% from baseline estimates***
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- An estimated 60,000 companies globally are affected by the EU CSRD.
- Other new biodiversity regulations include green claims, deforestation, and voluntary frameworks, such as TNFD and SBT for Nature.
Three steps to reduce biodiversity-related regulatory risks
The Convention on Biological Diversity provides a legal framework for global biodiversity-related actions. The Convention launched the Kunming-Montreal Global Biodiversity Framework (GBF) in 2022 to provide comprehensive, measurable, achievable, and time-bound biodiversity goals and targets including the development of National Biodiversity Strategies and Action Plans.
The GBF’s 23 targets across four major goals are designed with the objective of reversing biodiversity loss by 2030 and recovering ecosystems by 2050.
Global Biodiversity Framework targets include:
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Conserve 30% of the world’s terrestrial and aquatic ecosystems, and restore at least 30% of the world’s degraded ecosystems by 2030
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Halt the loss of areas of high biodiversity importance
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Reduce by half the excess nutrient releases, risks from pesticides, and hazardous chemicals
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Reduce or mitigate the impact of invasive species on biodiversity and ecosystem services
Pay close attention to the GBF’s target 15 calling for large transnational companies and financial institutions to regularly monitor, assess, and transparently disclose risks, dependencies, and impacts on biodiversity. This includes reporting on business operations, supply chains, value chains, and portfolios.
“Biodiversity is not measured using a single metric. Unlike carbon emissions, the complexity of biodiversity requires diverse expertise and a variety of metrics to quantify nature at different scales and pressures. From entire biodiverse ecosystems to our everyday, urban nature, all must be considered” says Vikki Patton, Nature-Positive Lead at Ramboll in the United Kingdom.
“Many new regulations coming into force on biodiversity protection, restoration, deforestation, green claims, and corporate sustainability reporting are aligning with the GBF. While regulations and guidance evolve, businesses can begin their biodiversity journeys using voluntary frameworks addressing operations and supply chain risks” says Samantha Deacon, Global Biodiversity and Ecosystems Lead at Ramboll. She recommends beginning with these frameworks:
- The Taskforce on Nature-related Financial Disclosures (TNFD) which provides GBF-aligned approaches and a framework for nature-related risk management and disclosure reporting
- The Science Based Targets Network (SBTN) released the first corporate science-based targets for nature to guide companies and cities towards an equitable, net zero, and nature-positive future. Initial SBTN targets focus on how companies can improve their impacts on freshwater quality and quantity, as well as protect and restore terrestrial ecosystems
These voluntary frameworks are cited in the Corporate Sustainability Reporting Directive (CSRD) which requires large companies with a European presence to regularly publish reports regarding their social and environmental risks and impacts. Companies with a European presence must abide by new rules when reporting for the 2024 financial year in 2025. CSRD reporting is phased in depending on size of business and annual revenue, and requires companies to define their material risks and report on a number of metrics, targets, plans, and policies.
CSRD areas of reporting for biodiversity and ecosystems
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Impact metrics
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Biodiversity targets
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Action and management plans
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Governance, resources, finance, & transition plans
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Biodiversity risk and opportunity policies
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Anticipated financial effects
Even businesses in jurisdictions with no regulatory mandates are feeling pressure to assess and disclose biodiversity-related risks.
New biodiversity-related pressures can be imposed in non-traditional ways including through securities regulation, litigation, or by competitive and other market influences.
For example, businesses must consider litigation regarding sustainability, biodiversity, and greenwashing claims under consumer protection laws such as the United States Federal Trade Commission Act, or substantive litigation under standards such as France’s Duty of Vigilance law.
Almost all businesses are facing increasing pressures to monitor, assess, and disclose biodiversity risks and opportunities.
Being proactive about biodiversity disclosures and action can provide business opportunities and better outcomes. Start by partnering with experts in biodiversity to navigate your company’s specific risks, potential liabilities, and prioritise mitigation actions. Gaining biodiversity and business specific insights could be key to enabling new business processes that assure compliance throughout your supply chain.
*World Economic Forum estimates
*** 2019 UN Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) and article here
Want to know more?
Lars Tappert
Managing Consultant
+49 89 978970182