Why integrate biodiversity into your ESG strategy?

Biodiversity – A Major Gap in ESG Strategies

For too long, businesses have focused solely on climate change in their environmental strategies. With global temperatures rising by +1.1°C, prioritising climate change is critical. However, this focus often leaves biodiversity as an overlooked factor, even though biodiversity loss can be just as devastating as climate change. Here’s why biodiversity deserves equal attention in any ESG strategy: 

1. Delay in addressing biodiversity at the public level

Biodiversity initiatives lag behind climate initiatives. The IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services), founded in 2012, came decades after the climate-focused IPCC, established in 1988. Although regulations like the BEGES mandate companies with over 500 employees to assess their carbon footprint, no equivalent exists for biodiversity. Still, new regulations such as the European RDF are promising steps forward.

2. Lack of awareness and knowledge of biodiversity issues

Biodiversity receives up to eight times less media attention than climate change, resulting in lower public and corporate awareness. Most consumers and companies are more informed about climate change impacts and are less likely to request biodiversity-focused initiatives. This lack of awareness and limited tools have hindered businesses from actively incorporating biodiversity into their ESG goals. However, the upcoming TNFD and SBTN frameworks aim to provide much-needed guidance for companies to address biodiversity better.

3. Difficulty in measuring biodiversity impact

Unlike carbon emissions, which can be measured in tonnes of CO₂ equivalents, there is no unified metric for biodiversity. Biodiversity is complex and encompasses genetic, species, and ecosystem diversity, making quantising impacts harder. New tools like the GBF, MSA, CBF, and STAR are emerging to help businesses calculate both negative and positive impacts on biodiversity, paving the way for more structured reporting and improvement efforts.

4. Overlooked connection between business and biodiversity

Companies are not always aware of their direct and indirect dependencies on biodiversity within their value chains, from suppliers and on-site operations to products and services sold. Recognising that all businesses rely on ecosystem services, similar to how they contribute to greenhouse gas emissions, is essential for a sustainable future. The health of ecosystems directly impacts a business’s long-term viability and ESG compliance.

Three reasons for businesses to prioritise biodiversity

Integrating biodiversity into your ESG strategy is not only beneficial but increasingly essential for long-term success. Below are three compelling reasons why prioritising biodiversity is crucial for any forward-thinking business:

1. Ensuring the longevity of your business

• Dependency on ecosystem services: All businesses depend on biodiversity and ecosystem services. From water and raw materials to pollination and waste regulation, biodiversity underpins 55% of the global GDP. A loss of biodiversity risks disrupting these essential services, which can impact business operations and resilience.
• Avoiding financial risks: Biodiversity degradation poses potential financial risks. Ecosystem collapse could increase costs, affect supply chains, and disrupt operational stability. By prioritising biodiversity, businesses can mitigate these risks.

2. Enhancing reputation with stakeholders

• Customer and investor appeal: Consumers increasingly expect companies to commit to biodiversity, with 80% valuing brands prioritising nature. Additionally, 76% of employees consider a company’s ESG practices, including biodiversity, in their job decisions.
• Brand differentiation: A strong biodiversity approach can enhance a company’s brand image. By positioning itself as a leader in sustainable practices, a business stands out among competitors and appeals to environmentally conscious consumers, investors, and employees.

3. Preparing for future regulations

• Anticipating regulatory changes: Biodiversity is already central to new ESG regulations. For instance, the European Corporate Sustainable Reporting Directive (CSRD) will require companies to include biodiversity in their sustainability reports starting January 2024. Implementing a biodiversity strategy now can help your company stay ahead of regulatory demands, improve ESG compliance, and reduce the risk of future penalties.

How to implement a biodiversity strategy for your business

Developing a biodiversity strategy can seem complex but achievable with the right tools and frameworks. Here’s a guide to integrating biodiversity into your ESG goals:

• Assess and prioritise: Identify the areas of your business that are most dependent on biodiversity, such as resource extraction or waste disposal. As your starting points, focus on high-impact sites or processes.
• Use frameworks for guidance: Leverage tools like the TNFD and SBTN frameworks to assess impacts and dependencies on biodiversity. These frameworks can help you set clear, measurable objectives and manage biodiversity risks and opportunities.
• Develop a SMART roadmap: Set Specific, Measurable, Achievable, Realistic, and Time-bound (SMART) goals for biodiversity. This roadmap should outline key actions to avoid, reduce, restore, and regenerate (AR3T) biodiversity impacts across your operations.

The SBTN framework – 5 Steps to enhance biodiversity in ESG

1. Identify: Recognize which environmental aspects need targets and in which parts of your business.
2. Prioritise: Determine the most critical areas for action.
3. Set and take action: Establish biodiversity targets and follow through with specific initiatives.
4. Implement AR3T actions: Follow the SBTN’s “Avoid, Reduce, Restore & Regenerate, Transform” approach.
5. Monitor progress: Regularly track changes and the outcomes of your biodiversity actions to measure impact.

Want to take the next step in ESG? Contact us to hear about the many biodiversity initiatives we do in our forests and how you can support those projects, or download our free guide to biodiversity integration for businesses.