Biodiversity Metrics for Corporate Sustainability
The Shift
in Corporate Environmental Responsibility
In the past, protecting the environment was often the domain of non-profits and advocacy groups, while large multinational corporations were viewed as primary contributors to environmental degradation. This dichotomy is changing. Increasingly, businesses recognize the importance of sustainability and are integrating it into their core strategies.
The Shifting Baseline Syndrome
This concept describes how each generation perceives the environmental conditions they grew up with as the norm, leading to progressively lower standards over time. In just 50 years, we’ve lost 70% of the world's biomass due to activities like deforestation and industrial agriculture (80% of which is meant to feed cattle so that we can eat meat). Paradoxically, the richest want to live 400 years on Mars, where there is no nature.
Measuring Biodiversity is Complex
Measuring biodiversity is more complex than measuring CO2 emissions, which are a single, quantifiable element. Biodiversity encompasses a wide range of interconnected elements, including species variety, ecosystem health, and genetic diversity. Despite these challenges, recent advancements have provided us with effective KPIs that help businesses understand their impact on nature. For that, we combine different data sources, like satellite images for deforestation, academic databases, and combine them into indicators that are actionable and manageable by companies.
Key Biodiversity Indicators
Ecosystem Integrity: This measures the health and functionality of ecosystems. For instance, companies can use satellite imagery to monitor deforestation rates and habitat fragmentation.
Biodiversity Decline: Tracking species populations and diversity within a given area can indicate the health of the local environment.
Land Degradation: Assessing soil health and land use changes helps companies understand the long-term sustainability of their land use practices (read our article on deforestation monitoring).
Water Stress: Monitoring water usage and availability can prevent over-extraction in water-scarce areas.
These indicators allow businesses to make informed decisions to mitigate their environmental impact. For example, a manufacturing plant experiencing water stress might adopt water-efficient technologies or processes.
Case study: Tesla Gigafactory in Brandenburg
The Tesla Gigafactory in Brandenburg, Germany, faced significant challenges due to its high water usage in a region already suffering from water stress. This led to substantial delays in production, costing Tesla an estimated $6 billion. The water shortage also caused public upheaval. This example underscores the importance of considering local environmental conditions in business operations and strategies.
What is Biodiversity’s Economic Value?
Biodiversity isn't just an environmental issue; it's a critical economic one. Approximately half of the global GDP is dependent on natural resources and ecosystem services. For example:
Pollination: About 75% of the crops we rely on, including fruits and vegetables, are pollinated by insects. Without these pollinators, global food supplies would be drastically reduced.
Natural Resources: Biodiversity contributes an estimated $500 billion annually to the global economy through ecosystem services like water purification, disease regulation, and carbon sequestration.
The Rise of Corporate Sustainability Roles
Sustainability has become a strategic priority for businesses. Companies are now appointing Chief Sustainability Officers (CSOs) who work alongside CEOs and CFOs to integrate sustainability into business models. These roles are crucial in identifying risks and opportunities related to environmental impact. They are not only reporting through CRSD (read our article on CSRD ESRS E4), they have important strategic insights and implications because there’s a lot of risks attached to biodiversity for businesses. And the risk component is much more local in biodiversity sustainability than in the efforts to fight climate change.
Implementing Biodiversity Metrics
By using biodiversity metrics, companies can identify areas where they are causing the most harm and take steps to mitigate it. This proactive approach helps businesses not only comply with regulations but also enhance their reputation and operational efficiency. By pivoting towards sustainability, and saving natural resources, businesses can gain market share (read our article on Regenerative economy).
Strategic Insights and Local Risks
Biodiversity loss presents more localized risks compared to climate change. For instance, if a company pollutes a local water source, it directly affects its operations and supply chain in that region. This immediate impact makes biodiversity a critical factor in risk management and strategic planning.
The perception of sustainability is evolving. Rather than viewing it as a regulatory burden or a cost, companies now see it as an opportunity to innovate and gain competitive advantage, but they are also seeing the need to manage and save resources.
Our Role at Natural Solutions
At Natural Solutions, our mission is to make nature measurable and manageable for companies. We provide solutions to help businesses monitor biodiversity, biodiversity risks, prioritize actions and our expertise allow for biodiversity consultancy. Along with our software solutions, we use tools such as camera traps, Lidar, biologging, SIG, AI, acoustic sensors, and more.
Bringing biodiversity metrics into businesses strategies is one of the only ways to slow down nature destruction. Nature knows no waste, it recycles everything constantly.
By embedding these practices, businesses can not only mitigate their environmental impact but also unlock new opportunities for growth and innovation in a rapidly changing world.
