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Biodiversity is declining at an unprecedented rate, and business needs to care

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By Kate Handley

· 6 min read

The abundance of monitored wildlife populations around the world has declined by an average of 69% between 1970 and 2018. This is code red for the planet, and humanity. The crisis is not just taking place within the confines of the conservation sector, it fundamentally affects business.

The Living Planet Report, recently published by the World Wide Fund for Nature, revealed these startling statistics. Detailing the findings of the Living Planet Index, which tracks the abundance of 32,000 populations of mammals, birds, fish, reptiles and amphibians around the world, the Report provides a comprehensive overview of the state of nature globally, the biggest drivers of loss, and what actions need to be taken to build a nature-positive society.

But the devil truly is in the details. Humanity’s demands on nature, from food and fibre production to the absorption of excess carbon emissions, amounts to the overuse of our planet by at least 75%, so says the Report. That’s the equivalent of living off 1.75 Earths.

One million plants and animal species are threatened with extinction. 1%-2.5% of birds, mammals, amphibians, reptiles and fish have already gone extinct. Having regard to distinct species and ecosystems, the figures are no less alarming. Every year we lose roughly 10 million hectares of forests – an area about the size of Portugal.

Mangroves, a key nature-based solution to climate change, continue to be deforested by aquaculture and coastal developments at current rates of 0.13% per year. The global abundance of oceanic sharks and rays has declined by 71% over the last 50 years, due primarily to an 18-fold increase in fishing pressure since 1970.

Freshwater species have suffered the most, seeing an overall global decline of 83%. Only 37% of rivers longer than 1,000km remain free-flowing over their entire length, affecting routes for migratory fish, which have shown an average decline of 76% between 1970 and 2016 due to habitat loss and barriers to migration routes.

Latin America (including the Amazon) shows the greatest regional decline in average population abundance (94% in 40 years), followed by Africa at 66%.

The Report is a clarion call to act. "We know what’s happening, we know the risks and we know the solutions. What we urgently need now is a plan that unites the world in dealing with this existential challenge," urges Marco Lambertini, director-general of WWF International.

"Agreeing on a nature-positive global goal is crucial and urgent."

The report calls on governments to take action by, among other things, ending subsidies that encourage activities that degrade ecosystems, shifting to sustainable production and consumption, including the transition to a circular economy, and requiring businesses to carry out human rights and environmental due diligence across their supply chains. This is where businesses should pay attention.

A report by the World Economic Forum in 2020 found that businesses are more dependent on nature than previously thought, with approximately $44 trillion of economic value generation – or half the world’s GDP – moderately or highly dependent on Nature. The depletion of Nature puts this figure at risk.

But businesses face other risks as a direct or indirect result of ecosystem collapse. For example, legal risks as new regulatory levers are brought into effect to curb impacts on biodiversity, including strict rules on the commercial use of specific land areas, subsidy reforms, and taxes and fines. Businesses also face reputational risks and changes in consumer behaviour if the products and services they provide are demonstrated to have negative impacts on biodiversity.

In addition, the requirement for businesses to conduct human rights and environmental due diligence (HREDD) across their supply chains is gaining traction internationally. The report recognises that: "At present, global momentum is building to go beyond voluntary sustainability commitments previously put in place by individual entities, towards legally binding due diligence processes governed by importing countries or blocs."

This has significant implications for business. With mandatory HREDD laws in place, it will no longer be possible to divorce products and services from impacts sustained to biodiversity in a company’s supply chain. Businesses will be required to act on biodiversity across their value chain, disclose where risks arise and take action to manage them.

This generation of HREDD go beyond mere reporting obligations, and create new standards of care for companies to act to mitigate human rights and environmental harms in their value chains. This requirement is already developing in the European Union, which published its proposed Directive on Corporate Sustainability Due Diligence on 23 February this year.

The directive, which once adopted will be transcribed into national laws by EU member states, lays out the steps which should be included in HREDD processes, including identifying, assessing and preventing adverse human rights and environmental harms, and reporting on these to the public. These due diligence obligations apply not only to a company’s own operations, but also to their subsidiaries and their value chains, including "third country" companies over a certain turnover.

Additional action in the context of HREDD has also been spurred by the UN Human Rights Council declaring in October 2021 that having a clean, healthy and sustainable environment is a human right. A Policy Brief by David Boyd, the Special Rapporteur on Human Rights and the Environment, recognises that given the scale at which large multinational businesses operate and the environmental and human rights harms that may be suffered across their national and transnational value chains, effective and equitable human rights and environmental due diligence legislation is fundamental.

This rise in obligations to trace and identify environmental impacts through due diligence regulation and disclosure standards means that companies will have the necessary knowledge, control and foresight to be held liable for failures to prevent or mitigate biodiversity loss. In addition, as knowledge of biodiversity loss and risk grows, the standards of care expected of directors will rise. It is important for South African businesses to stay abreast of international trends that may impact their operations, or eventually be transposed into South African law.

Nature is being eroded at a disastrous rate. The Living Planet Report paints a bleak picture, and it is becoming increasingly important for corporates to assess and address their role in this degradation, not only because of their dependence on healthy ecosystems, but for the liability and reputational risks to which they may be exposed should they be complicit in ecosystem collapse.

Businesses should respond to these risks by mapping vulnerabilities and exposure to biodiversity risk, including for subsidiaries and value chain partners. Given the enormous reach of business, its role in stemming the tide of biodiversity loss is crucial.

This article is also published by News24. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Kate Handley is the Executive Director of the Biodiversity Law Centre, a new non-profit law clinic whose vision is flourishing indigenous species and ecosystems that support sustainable livelihoods in Southern Africa.

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