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Biodiversity Policy What on earth?

Agreements reached in Nagoya are good news. But, according to a new report, the business community has much to learn about the impact of – and dependency on – biodiversity-related activities. By Tom Idle


he UN COP10 Convention on Biological Diversity, which took place in the Japanese city of Nagoya before Christmas, was largely deemed a success. Delegates from across the globe joined forc- es in a bid to save our precious resources. Environment ministers agreed to cut the loss of forests and other natural habitats by half, increase the amount of land designated as nature reserves from 13% to 17% by 2020 and to raise the amount of marine and coastal areas protected by reserves from 1% to 10%. The agreements that were reached are excellent news. According to the UN-backed Economics of Environment and Biodiversity, the loss of biodiversity is costing a staggering $2-4.5T – that is around 7.5% of global GDP. But agreements between governments are one thing; the practical reality is something else. A new report from EIRIS, a provider of research into the environmental, social, governance and ethical performance of com- panies, shows that the business community is showing a severe lack of understanding over the impact of, and dependency on, biodiver- sity-related activities – and is largely being ignored in the corporate world. As its title suggests, COP Out? Biodiversity Loss and the Risk to Investors has been designed to help the investment community understand the systematic risks that biodiver-

22 | Sustainable Business | February 2011

sity loss represents to investments, focusing on around 1,800 FTSE-listed companies. It shows that almost 60% of them operate in sec- tors whose business activities have a consider- able biodiversity impact, such as construction, energy, mining and metals, oil and gas, and food and beverage.

Yet only 6% of these so-called high-impact companies have strong policy on biodiversity, according to EIRIS experts. Other findings include:

n medium-impact sectors, such as chemicals, retail and property, consistently lag high- impact sectors in their understanding of the relationship between nature and business models; n chemicals and pharmaceuticals, construc- tion, property development and road distribu- tion and shipping sectors are doing the least to tackle biodiversity. The forestry and paper sector displays the best performance; n sectors with high biodiversity impacts asso- ciated with their supply-chain are failing to tackle biodiversity; n few companies link biodiversity to other key issues such as climate change, air and water emissions, water use and waste; and n regional disparities do exist. European com- panies performed best and Asian companies performed worst

A key facet of the COP10 agreement relates to the access to, and sharing of, genetic resources. Businesses may have to negotiate agreements to maintain access to those resources and pay into an international fund to finance research projects that will help to protect biodiver- sity, particularly in developing countries. As EIRIS points out, this could have serious implications for a number of company sectors, with the pharmaceuticals sector likely to be severely hit. However, EIRIS’ analysis shows that this sector is among those doing the least to tackle biodiversity.

“Over the next few decades ecosystems will be altered faster and more extensively than ever before,” says Carlota Garcia-Manas, head of research at EIRIS. “This poses both signifi- cant risks for investors as well as investment opportunities around companies producing more eco-efficient goods, services and new technologies.

“Investors should take steps to under-

stand the systematic risks that biodiversity loss represents to their investments and use engagement channels to increase business par- ticipation in voluntary stewardship schemes to protect biodiversity, especially amongst companies based in medium-impact sectors.”

For more, visit the Biodiversity Knowledge Hub >

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