Most companies have taken action on biodiversity, but necessary biodiversity strategies are still largely missing.
In recent years, global interest in biodiversity has grown remarkably fast. This increase is reflected in the Montreal Accord, signed by 188 governments, which underscores the urgency of addressing biodiversity loss. This concern is reinforced by the fact that the European Central Bank has recognized biodiversity as a major systemic financial risk and a growing number of investors – with significant assets under management – have committed to the biodiversity pledge. As attention to biodiversity increases, it is encouraging at first glance to see this being translated into corporate actions.
Research by VBDO (Association of Investors for Sustainable Development) shows a positive trend: more companies are taking concrete steps to address biodiversity. This year, 90% of the Dutch listed companies we spoke with explicitly mentioned biodiversity issues in their annual reports and implemented measures to reduce their negative impact on biodiversity. While this seems like a remarkably positive development, it is essential that we maintain a critical perspective.
Indeed, the problem does not necessarily lie in the quality of the company’s actions to reduce its impact on biodiversity. In fact, some initiatives have made positive contributions. The problem arises when these biodiversity projects divert attention from the essential steps needed to address the problems.
To truly address biodiversity challenges, companies must first conduct thorough research to understand the impacts and dependencies within their business models. Only then can companies significantly reduce negative impacts, increase positive contributions to biodiversity and, most importantly, develop nature-positive transformative solutions integrated into their business models.
ONLY HALF OF COMPANIES HAVE BIODIVERSITY STRATEGY
Unfortunately, it appears that only half of the companies surveyed have developed a dedicated biodiversity strategy. Only three out of 10 companies identified key biodiversity-related risks and opportunities, while only four out of 10 are actively working to develop transformative biodiversity solutions.
These findings indicate that while most companies have initiated actions related to biodiversity, more comprehensive biodiversity strategies are urgently needed. Without such strategies, the root causes of biodiversity loss remain untouched.
Simply checking boxes or implementing isolated projects is not enough to bring about the required change. It remains remarkable that the vast majority of companies VBDO works with are taking action to reduce their negative impact on biodiversity.
However, one should not get distracted. That is, stop urging companies to develop biodiversity strategies based on thorough impact and dependency analyses. Ultimately, that is the only path that leads to the much-needed transformative solutions, solutions that are desperately needed already in the short term to ensure their own continuity.
This column was previously posted on Financial Investigator.