Biodiversity, a business priority?
Ahead of the International Day for Biological Diversity this weekend, Dr Gemma Cranston, Senior Programme Manager, Natural Capital Leaders Platform, suggests biodiversity is critical for business
20 May 2016
Biodiversity is not necessarily the first thing you think of when purchasing a new handbag, a pair of shoes or a dress for the next season. Perhaps it should be. After all, biodiversity is critical to support the production of the raw materials – the leather, the cotton, the cashmere – that make up your wardrobe. Biodiversity represents the variety of all life on earth; it is vital to the functioning of our ecosystems and provides a wealth of benefits such as regulating water sources, increasing soil fertility and providing pollination.
The Cambridge Institute for Sustainability Leadership (CISL) is supporting companies to understand their relationship with biodiversity and the associated business opportunities. Measuring business impact on biodiversity has been raised as a particular priority by the French luxury goods company Kering. CISL and Stanford University are helping to support Kering in developing the latest thinking and approaches to address this issue, leveraging Kering’s pioneering work on its Environmental Profit & Loss account (EP&L).
Ending biodiversity loss is not a side show, it is a global priority. This has been clearly articulated in the Sustainable Development Goals (SGDs) that were adopted by the United Nations in 2015. Biodiversity is highlighted in particular in SDG 15 where the goal is to “Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss”. Some companies are now responding to these SDGs and incorporating them into their business models and strategies.
The dependency upon biodiversity is front of mind for some businesses in the fashion industry. “Sustainability is not an option,” Kering’s Marie-Claire Daveu, Chief Sustainability Officer and Head of International Institutional Affairs, has said. “When you look at the state of the planet, you can see already the effects of climate change and loss of biodiversity, resource scarcity and population growth.” In recognition of this issue, Kering developed the EP&L to measure and monetise the environmental impact of its own operations and its entire supply chain.
The loss of biodiversity can have a direct impact upon business operations, where raw materials are no longer available at the quality and in the quantity needed. Increasing costs in commodity supply chains, as a result of decreasing biodiversity, can have consequences on a company’s bottom line. This threatens future cash flows and the stability of business by amplifying unmanaged risks in supply chains. In order to maintain licenses to operate and to secure supply chains, businesses need to develop strategy that address their dependencies on biodiversity and adapt to external pressures.
The survival mindset is clear in business in the need for growth and profit; it is just that this is not usually attributed to the survival of the planet’s biodiversity. Without biodiversity it will be difficult for many sectors to secure long-term business growth. Businesses have opportunities to safeguard their futures by reducing the impacts of their operations on biodiversity. Of course, this varies by sector but broadly includes impacts from raw material production, during processing and manufacturing all the way to the product use and disposal. The largest environmental impacts are located during the production of raw materials. Businesses aiming to support biodiversity should therefore focus their efforts at the very beginning of the supply chain. Kering has shown the benefits of this approach through their EP&L.
As well as looking at the beginning of their supply chain businesses also need to be able to measure biodiversity impacts and demonstrate their progress against these metrics. CISL and Stanford University are working with Kering to help the Group develop a metric that can assess the impact their brands have on biodiversity at the raw material production level and evaluate possible improvements. We are developing approaches that address the benefits and methodology of measuring and valuing business impacts on biodiversity. This includes improving the way corporate natural capital accounts such as the EP&L measure impacts on biodiversity and ecosystem services.
Developing a metric for biodiversity is no easy task and should not be undertaken in isolation. It is not only in the interest of luxury apparel brands either but for many different sectors who have a relationship with the natural environment. CISL’s Natural Capital Leaders Platform recognises the importance of working across sectors to explore and address common natural capital problems and has invited a group of businesses and leading experts to develop new thinking around biodiversity measurement for the private sector. We are looking forward to rising to this challenge in our June workshop here in Cambridge.
Our hope is that, with a clear metric on biodiversity, business will have a simple approach to assess their impacts on biodiversity. Perhaps then, as well as considerations of latest fashions and styles, we might also take biodiversity into account when we design our wardrobes.