In the past, companies have seen environmental concerns and business goals as two distinct issues—at best unrelated to one another, at worst in opposition.
However, it’s increasingly clear that businesses can pursue both at the same time. Seeking to improve and preserve the environment can directly improve the bottom line.
To illustrate the point, let’s zero in on a particular environmental concern: biodiversity. We’ll explore what the term means, why it’s important, and what it has to do with business.
What Is Biodiversity?
Biodiversity means there is a wide variety of species in every biome on the planet. From insects to herbivores to apex predators, there are thousands of lifeforms around us — and many more thousands to still be discovered.
All of these diverse types of life are interconnected with one another and with their environment in a complex but delicate web of relationships.
For example, a particular species of insect might be the sole food source for a particular species of frog. That frog might secrete a mucus that inhibits the growth of a particular algae in a pond. If the insect goes extinct, the frog goes, too, and soon the pond is a brackish mess that chokes out the fish living there.
Why Is Biodiversity at Risk?
There are many factors contributing to the biodiversity-threatening endangerment and extinction of species. Virtually all of them are caused by human activity:
- Climate change makes biomes uninhabitable for their native species
- Modification and destruction of natural habitats due to overpopulation, urbanization and construction
- Overexploitation of plant and animal species, such as overfishing in the oceans
- Air, soil and water pollution, largely from industrial sources
- The introduction of non-native species can overtake the existing species in a particular area
Why Does It Matter?
Biodiversity affects human beings in much the same way as other species – like the hypothetical insect, frog, and algae – but on a far larger scale. According to the Convention on Biological Diversity, “Biodiversity underpins the provision of food, fiber and water; it mitigates and provides resilience to climate change; it supports human health, and provides jobs in agriculture, fisheries, forestry and many other sectors.”
In other words, the risks to humans from a loss of biodiversity are nothing less than the underpinnings of our existence: food, water, health, and livelihood.
How Does Biodiversity Affect Businesses?
The survival of the humanity/human beings human race aside, there are ample business benefits to preserving biodiversity.
Financial investors are favoring sustainable businesses. According to SEC chairman Gary Gensler, high-level investors—those with $130 trillion or more in assets managed—are asking companies to reveal their climate impact. Investors are looking for companies that are taking action to be more socially responsible.
Consumers are taking an elevated interest in sustainability. A recent report shows that 78% of consumers take sustainability into consideration when making purchase decisions, and over two-thirds say they are willing to pay more for environmentally responsible products and services.
Health and well-being of employees depends on clean air, water and food—all of which are dependent on a diverse and healthy environment. Preserving biodiverse habitats can help limit the spread of disease as well.
On the other hand, shrinking biodiversity is costing businesses in both tangible and intangible ways.
Scarcity and reduced quality of natural resources has a direct cost to the bottom line. It’s estimated that $44 trillion of business value is tied up in natural resources that are at risk due to decreasing biodiversity.
Increased adverse weather events, due to both climate change and decreasing biodiversity, can affect supply lines, destroy business assets, and interrupt work. For example, loss of biodiversity in plants has led to increased erosion and flooding in areas that have never seen floods before.
Increased spread of disease is a risk that became very concrete to businesses during the COVID-19 pandemic. As habitats shrink and animals relocate closer to human habitats, the likelihood of another pandemic rises. We have seen clearly how a global pandemic impacts workflow, production, supply lines and beyond.
Extreme heat and cold from ongoing climate change both increase the cost of doing business. The extra expenses range from more usage of heating and air conditioning, to spoilage of perishable goods, and beyond.
How Can Businesses Preserve Biodiversity?
There is no one-size-fits-all plan of action for biodiversity. The right plan for your company will depend on your industry, size, location, and more. The easiest way to get started is to commission a sustainability analysis report.
This report can help your business form a plan to make the biggest impact with the fewest dedicated resources. Your plan should go beyond simply purchasing offsets—they can be on the list, but should be at the bottom. Biodiversity is a local issue with global implications, so it’s important to concentrate your efforts where they will matter most.
For some different regional views, in Europe corporate biodiversity requirements are fast approaching in the next months with the CSRD (Corporate Sustainability Reporting Directive) and the EU taxonomy. Both will impose new biodiversity reporting obligations for companies. These requirements are expected to cover not just companies’ own operations, but also their upstream and downstream value chains. Check out more in the full article from our associate denkstatt.
In one example from our Associate at ESC Singapore in its oversight of the Tina River Hydro Development Project in the Solomon Islands, they are demonstrating the importance of environmental consultancy in the transition towards renewable energy reliance. ESC was tasked with overseeing a Biodiversity Management Plan (BMP), designed to mitigate any disruption to the wildlife and ecology of the surrounding area during the construction phase. Read more on the project here.
Within Inogen Alliance's global network we have professional groups focused on topics within sustainability with one of our latest internal discussions focused on the importance of biodiversity within our work.
It can be rare to find an overlap between the right thing to do, the popular thing to do, and the profitable thing to do. When it comes to fighting climate change and preserving biodiversity, however, it’s a win-win-win: Good for the planet, good for consumer relations, and good for the bottom line.
In the words of Gandhi, “be the change you want to see in the world” Ready to get started? Find an Inogen Alliance consultant near you.