Businesses have an important role to play in limiting biodiversity loss through innovation, investments and sustainable practices

Kate

<h2>The consequences of ecosystem collapse</h2>
Declining biodiversity threatens health, food security and quality of life.
Businesses are also more dependent on biodiversity than previously thought, with&nbsp;<a href="https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdf" target="_blank" rel="noopener">approximately $44 trillion of economic value generation</a>&nbsp;&ndash; or half the world's GDP &ndash; moderately or highly dependent on nature.
The depletion of biodiversity puts this figure at risk. As businesses grapple with the physical risks associated with the decline of ecosystem services, such as reduced protection from natural disasters or decreased production yields because pollinators, like bees and other insects, are declining. In some cases, loss of biodiversity also increases exposure to climate-related risks.
<h3>Indirect risks</h3>
Businesses also face&nbsp;<a href="https://commonwealthclimatelaw.org/wp-content/uploads/2023/01/CCLI-Biodiversity-Risk-Legal-Implications-for-Companies-and-their-Directors-December-2022.pdf" target="_blank" rel="noopener">other risks</a>&nbsp;as a direct or indirect result of ecosystem collapse.
This includes transition risks, which arise as a result of technological advances and regulatory changes aimed at curbing negative impacts on biodiversity. Transition risks can include subsidy reforms, taxes and fines, or risks to business models where new technologies replace those that pose a greater risk to biodiversity - for example, the rise of meat alternatives.
Companies that mismanage physical and transition risks may also expose themselves to legal risks, such as litigation, regulatory penalties, insurance costs or reputational damage, as consumers increasingly seek products and services that don't impact negatively on nature.
<h2>What has been done?</h2>
At the end of 2022, parties to the&nbsp;<a href="https://www.cbd.int/" target="_blank" rel="noopener">Convention on Biological Diversity</a>&nbsp;came together to agree to a new deal for a nature-positive world &ndash; which, simply speaking, means more nature by the end of this decade than at the beginning.
The outcome, the&nbsp;<a href="https://www.cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdf" target="_blank" rel="noopener">Post-2020 Global Biodiversity Framework</a>&nbsp;(GBF), contains four goals and 23 targets that will guide national governments in setting their nature-related policies, having significant implications for the risks businesses need to manage and report on.
The goal? Living in&nbsp;<a href="https://www.cbd.int/doc/c/0b54/1750/607267ea9109b52b750314a0/cop-14-09-en.pdf" target="_blank" rel="noopener">harmony with nature by 2050</a>, which means that biodiversity is valued, conserved, restored and wisely used, maintaining ecosystem services, sustaining a healthy planet and delivering benefits essential for all people.
<h2>The role of the private sector</h2>
The private sector has a critical role to play in achieving the goals and targets of the GBF.
Several of the&nbsp;<a href="https://www.pwccn.com/en/issues-based/global-biodiversity-framwork-dec2022.pdf" target="_blank" rel="noopener">targets directly affect business</a>. Target 15 is arguably the most directly relevant. This target requires businesses to address unsustainable production and supply chains - which are among the biggest drivers of biodiversity loss. Businesses are required to regularly monitor, assess, and transparently disclose their risks, dependencies and impacts on biodiversity.
This disclosure will enable businesses to reduce their negative impacts on biodiversity, increase positive impacts, and reduce biodiversity-related risks.
Importantly, businesses will have to account for impacts and risks across their value chains. This means that companies will no longer be able to divorce products and services from direct impacts on biodiversity and ecosystem services.
New initiatives, such as the&nbsp;<a href="https://tnfd.global/" target="_blank" rel="noopener">Taskforce for Nature-related Financial Disclosures</a>&nbsp;are developing the frameworks within which disclosure and reporting may be done, guiding business owners on their disclosure journeys.&nbsp;
But how can businesses benefit from these increased disclosure requirements?
<h2>Protecting business interests</h2>
As the focus on biodiversity loss increases, so too will regulatory and stakeholder demands on companies to make such disclosures. Protecting biodiversity, and reporting thereon, will not only be good for the planet but will reduce the physical, transition and legal risks businesses face, ultimately having a positive impact on the bottom line.
We saw how the Paris Agreement spurred a wave of climate action in the years that followed. So too will the targets and goals of the GBF accelerate changes in policies, regulations, stakeholder expectations and market environments. This will level the playing field for businesses that have already adopted sustainable practices while increasing transition risks for those businesses that fail to adopt a nature-positive approach.
These are all risks that businesses will be required to disclose and manage, but they also present significant opportunities for those savvy enough to recognise the inherent benefits of protecting and restoring biodiversity.
Companies that succeed in assessing and managing their nature-related risks and opportunities will not only increase resilience in their value chains but will be ahead of the curve in meeting growing stakeholder expectations in relation to protecting biodiversity. They would also be better placed to meet potential future regulatory requirements aligned with Target 15 as governments transpose the GBF into domestic law and policy.
<h2>Conclusion</h2>
Ultimately, all businesses will be affected to varying degrees by biodiversity loss and loss of ecosystem services.
With more than half the world's GDP dependent on nature, the risks are just too high to ignore. But business will also play a pivotal role in halting and reversing biodiversity loss through innovation, investment and sustainable practices.
Companies stand to benefit significantly by getting this right.
This article is also published in <a href="https://www.news24.com/fin24/climate_future/environment/opinion-biodiversity-whose-business-is-it-anyway-20230511" target="_blank" rel="noopener">News24</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Biodiversity – whose business is it anyway?

One would be forgiven for not feeling overly optimistic about the general state of governance in South Africa.

But there is an area providing some reprieve from the otherwise rather depressing state of affairs, and that is in the context of the protection and restoration of our country’s biodiversity.

It is hard not to feel despondent when reflecting on the current state of South Africa. We are experiencing crippling bouts of load-shedding, staggering revelations regarding the extent of corruption in Eskom and, as if this weren’t enough, South Africa has also been placed on the <a href="https://theconversation.com/south-africa-has-been-grey-listed-for-not-stopping-money-laundering-and-terrorism-funding-what-it-means-200696">Financial Action Task Force’s greylist</a> for not stopping money laundering and terrorism funding. 
It all paints a bleak picture, and one would be forgiven for not feeling overly optimistic about the general state of governance in South Africa.
But there is an area providing some reprieve from the otherwise rather depressing state of affairs, and that is in the context of the protection and restoration of our country’s biodiversity and, specifically, the steps being taken by Minister Barbara Creecy and the department of forestry, fisheries and the environment to implement South Africa’s international obligations.
In December 2022, the Conference of the Parties of the Convention on Biological Diversity (including South Africa), met for the 15th time (COP15), and the first time in four years, to negotiate the <a href="https://www.cbd.int/doc/decisions/cop-15/cop-15-dec-04-en.pdf">Post-2020 Global Biodiversity Framework</a>. The framework, which contains four goals and 23 targets, has been heralded by many as the ‘Paris Agreement for nature’.
The Paris Agreement and its goal to keep global warming within 1.5°C of pre-industrial temperatures have provided a globally accepted benchmark against which governments and corporations are held to account. Similarly, the biodiversity framework is set to provide the blueprint to halt and reverse biodiversity loss by 2030.
The framework is arguably the most robust international response to catastrophic biodiversity loss the world has seen. But with only eight years remaining to achieve its 23 ambitious targets, time is of the essence, and significant human, financial and technological resources will be necessary to achieve their implementation. Encouragingly, this fact is not lost on the department or Creecy.
At a virtual stakeholder feedback session held on 10 February, the department’s director-general, <a href="https://www.dffe.gov.za/speech/tshabalala_biodiversityinvestmentportal2022">Nomfundo Tshabalala</a>, who represented the SA delegation in Canada in December, reflected on the framework’s targets, and how they will be implemented.
To reduce threats to biodiversity, the framework contains the landmark 30×30 target, which seeks to ensure that at least 30% of the world’s lands, freshwater and oceans are conserved by 2030, while respecting the rights and contribution of indigenous peoples and local communities. Currently <a href="https://www.cbd.int/article/cop15-cbd-press-release-final-19dec2022#:~:text=Among%20the%20global%20targets%20for%202030%3A&amp;text=Have%20restoration%20completed%20or%20underway,ecosystems%20of%20high%20ecological%20integrity">17% and 10%</a> of the world’s terrestrial and marine areas respectively are under protection.
Further, the framework aims to have restoration completed or underway on at least 30% of degraded terrestrial, inland waters and coastal and marine ecosystems, and to reduce to near-zero the loss of areas of high biodiversity importance, including ecosystems of high ecological integrity.
The framework also aims to halt human-induced extinction of known threatened species, to reduce pollution and to ensure that the use, harvesting and trade of wild species is sustainable, safe and legal, preventing overexploitation. Importantly, it also aims to minimise the impact of climate change on biodiversity, and to increase resilience.
The framework contains important targets relating to meeting people’s needs through the sustainable use of wild species and benefit sharing. This includes ensuring that nature’s contributions to people (which include the ecosystem goods and services on which we rely, such as provision of food and regulation of air and water) are restored, maintained and enhanced.
Critical targets in the framework include the means of its implementation, and Tshabalala paid particular attention to these targets during the feedback session. It is estimated that an <a href="https://www.weforum.org/agenda/2021/05/biodiversity-deforestation-global-investment-inititive/">additional $700 billion</a> per year is needed to safeguard biodiversity and conserve ecosystems. In order to reach this amount, target 18 makes provision for the phasing out of subsidies which have harmful impacts on biodiversity to the tune of $500 billion per year by 2030, while target 19 requires an increase in financial flows of $200 billion per year by 2030.
Tshabalala explained that to mobilise $200 billion per year, COP15 adopted the Strategy for Resource Mobilisation, which will occur in two phases: an intermediate phase (2023–2024) to raise $20-billion per year by 2025, and a medium-term phase (2025–2030) to raise at least $30-billion per year by 2030.
Tshabalala emphasised that the financial flows were necessary to ensure implementation of the framework and must be supported by a mechanism that will strengthen technical and scientific cooperation.
The <a href="https://www.cbd.int/sp/targets/">previous biodiversity targets agreed in 2010</a> were not met. While good ideas on paper, the targets weren’t properly implemented, and thus weren’t achieved. The key takeaways of the stakeholder feedback session were consequently the commitments made by Creecy and her department to implement the framework, and the plan outlined in this regard.
The first step of the plan involves hosting engagements with stakeholders who may contribute to the implementation plan. Second, the department plans to hold national feedback sessions on the framework during which it will engage with all stakeholders involved. Third, the department will categorise the 23 framework targets to facilitate their implementation. Finally, the department will review South Africa’s national biodiversity strategy and action plan, and align it with the implementation of South Africa’s <a href="https://www.gov.za/sites/default/files/gcis_document/202207/46687gon2252.pdf">white paper on conservation and sustainable use</a> of biodiversity.
Accountability in implementation of the framework is key, and Tshabalala explained that the department will develop national indicators in terms of which the process may be tracked to evaluate whether the targets are in fact being achieved. National reports will be developed from the monitoring and evaluation process.
One can only be encouraged that, within less than two months of the framework being adopted in Montreal, Creecy and her department are already taking concrete steps towards implementing it and achieving its targets.
As Tshabalala noted, the framework is seen as the new roadmap in terms of living in harmony with nature, and achieving its implementation is going to be critical if South Africa, and the world, are to avoid again failing to meet internationally agreed targets to protect and restore our planet.
This article is also published by the <a href="https://mg.co.za/opinion/2023-03-07-sas-progress-towards-international-biodiversity-targets-provide-a-glimmer-of-hope/">The Mail &amp; Guardian</a>. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
<h6>Cover photo by <a href="https://unsplash.com/@westbeach013?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Casey Allen</a> on <a href="https://unsplash.com/photos/UjpEGHu8uNU?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>​ </h6>

South Africa advances on international biodiversity targets despite its other challenges

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.

<h4>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.</h4>
The <a href="https://livingplanet.panda.org/en-GB/">Living Planet Report</a>, 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. &quot;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,&quot; urges Marco Lambertini, director-general of WWF International.
&quot;Agreeing on a nature-positive global goal is crucial and urgent.&quot;
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 <a href="https://www3.weforum.org/docs/WEF_New_Nature_Economy_Report_2020.pdf">report by the World Economic Forum</a> 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: &quot;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.&quot;
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 <a href="https://www.clydeco.com/en/reports/2022/03/biodiversity-liability-and-value-chain-risk">generation of HREDD go beyond mere reporting obligations</a>, 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 <a href="https://eur-lex.europa.eu/resource.html?uri=cellar:bc4dcea4-9584-11ec-b4e4-01aa75ed71a1.0001.02/DOC_1&amp;format=PDF">Directive on Corporate Sustainability Due Diligence</a> 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 &quot;third country&quot; companies over a certain turnover.
Additional action in the context of HREDD has also been spurred by the <a href="https://news.un.org/en/story/2021/10/1102582">UN Human Rights Council declaring</a> in October 2021 that having a clean, healthy and sustainable environment is a human right. A <a href="https://www.ohchr.org/sites/default/files/documents/issues/environment/srenvironment/activities/2022-07-01/20220701-sr-environment-policybriefing3.pdf">Policy Brief</a> 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 <a href="https://www.news24.com/fin24/opinion/opinion-biodiversity-is-declining-at-an-unprecedented-rate-and-business-needs-to-care-20221101">News24</a>. Illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

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Kate Handley

Kate Handley

Biodiversity – whose business is it anyway?

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