Biodiversity in Business: From Compliance to Net Positive

By Jonathan Plaistowe , Nina Hees , Michael Adams and Byron Bester Pr.Sci.Nat.

With biodiversity under ever-increasing threat, 2024 is another pivotal year for businesses to mainstream biodiversity into their management practices and strategy development. The Kunming-Montreal Global Biodiversity Framework (GBF) and Convention on Biological Diversity (CBD) continue to lay down important goals and targets for biodiversity conservation, and the Taskforce for Nature-related Financial Disclosures (TNFD) provides a framework for actioning them through private sector investment. In striving for net positivity and pushing beyond compliance, we must mitigate risk and identify new opportunities that can contribute to a more functional and sustainable future. We are in the UN Decade of Restoration, and we all must play a role in achieving a net-positive future.

1. Biodiversity Loss and Business

Despite increasing ambition towards biodiversity conservation, biodiversity loss remains a massive threat. Nature is deteriorating globally, and biodiversity is declining faster than ever in human history, as species are being lost between hundreds and thousands of times faster than the background extinction rate. This is alarming for multiple reasons. Besides the intrinsic value biodiversity holds, we receive many benefits to society from ecosystems (referred to as ecosystem services or nature’s contributions to people). With biodiversity being lost, we are putting ourselves at risk.

Society is driving biodiversity loss through invasive species, changes in land and sea use, climate change, pollution, and the direct exploitation of natural resources. In disrupting ecosystems, the resilience of nature and business is compromised, which has negative implications for the business’s long-term operational and financial stability. Nature-related risks are materialising with increasing severity and frequency, showing that biodiversity loss is a strategic risk management issue. The science is clear, and numerous reports show the risks that society faces.

Several planetary boundaries have been crossed, including biodiversity loss, climate change, biogeochemical flows and land system change, and global ‘tipping points’ are being reached. According to a PwC study in 2023, 55% of the global GDP, $44 trillion, was moderately or highly dependent on nature, while a study by S&P Global Sustainable1 in 2023 found that 85% of the S&P Global 1200 companies had a significant dependence on nature across their direct operations. Furthermore, it is stressed that the entire economy depends on nature to some degree, so the impact of the biodiversity crisis poses an increasing risk. The World Economic Forum regards biodiversity loss and ecosystem collapse as the 3rd most significant global risk over the long term (i.e. 10 years).

Fortunately, the risk of biodiversity loss also poses an opportunity for a renewed approach towards the interaction with nature, including novel enhancement efforts and conservation objectives. Businesses and the private sector play a crucial role in ensuring that society achieves this goal. The private sector impacts the environment, but it also has the power to facilitate achieving the goal.

2. COP16 and the Kunming-Montreal Global Biodiversity Framework

The GBF, adopted at COP15 in 2022, is a monumental agreement to address the biodiversity loss crisis, aligned with this being the decade of restoration. It builds on previous work by the Convention on Biological Diversity, as well as scientists around the world, in establishing four goals and 23 targets to halt biodiversity loss by 2030 and restore ecosystems by 2050. With several targets, such as ‘30 x 30’ (30% of the world’s area protected by 2030) and maintaining and enhancing ecosystem services, the GBF aims for a society which lives in harmony with nature.

The GBF builds on the Aichi Biodiversity Targets established during the CBD in 2010, which consisted of 20 specific targets to be achieved by 2020. Unfortunately, none of the targets were fully met, and only six were partially met. The ambition behind some of these targets (e.g. Target 3 targeting incentives and Target 20 targeting mobilisation of funding) was for the financial sector to shift resources away from negative biodiversity impacts towards positive biodiversity outcomes. One of the lessons in failing to meet these Aichi Targets is that the private sector needs to get involved if there is to be meaningful positive biodiversity change.

COP-16, the 16th United Nations Conference on Biological Diversity, will be the first biodiversity COP since adopting the GBF. COP16 will translate the GBF into more concrete action and aim to facilitate and enable implementation. Target 15 calls for businesses to integrate biodiversity into management and strategy by assessing and reporting on their interactions with nature to encourage a shift in financing towards positive interactions, which builds on the related Aichi Targets (Target 3 and Target 20). Businesses face increased expectations and need to investigate better or best practices, such as alignment with IFC Performance Standard 6 and the High Conservation Value (HCV) Approach, in how they interact with nature.

3. The TNFD: Translating Nature for Business

The Taskforce on Nature-related Financial Disclosures (TNFD) has emerged as an important framework that helps organisations assess, disclose, and manage their nature-related dependencies, impacts, risks, and opportunities. It is built around four key pillars—Governance, Strategy, Risk and Impact Management, and Metrics and Targets— and aligns with global sustainability goals, including the GBF. The TNFD recommendations have become vital in understanding the ties between an organisation’s resilience and biodiversity, both from an economic and reputational perspective.

With better tools for mainstreaming biodiversity, businesses are better placed to ensure alignment with the GBF, specifically Target 15, and achieve a net positive impact. As biodiversity loss gains more attention and with more robust methodology and improved data availability, such as the methods provided in the TNFD recommendations, companies will have greater expectations to pursue this net positive impact. This is an opportunity for wins for both biodiversity and business. Businesses can enhance their reputation and appease investors by showcasing ambitious commitments towards biodiversity conservation.

4. Addressing Compliance and Pursuing Net Positivity

In changing how business interacts with biodiversity and nature, with respect to the TNFD pillars or the impacts, dependencies, risks and opportunities, net positivity becomes an exciting prospect. There are many steps towards achieving this, including addressing and adhering to local legislation and best practice policies. Beyond compliance, businesses need to understand their biodiversity interface and develop a policy that showcases their vision and objectives toward biodiversity conservation. A strategy takes this further to guide the business on addressing and managing nature-related business risks and opportunities.

Screening assessments and situational analyses are important for understanding the business’s context, and benchmarking against best-practice principles helps inform policy and strategy development. Day-to-day biomonitoring of sensitive biodiversity and assessments for ecosystem services and critical habitat may be needed to comply with and inform progress against risk management objectives highlighted in the policy or strategy. Beyond the assessments, businesses should disclose their interactions with nature and monitor progress towards their business targets and operational management plans. These steps enable the achievement of greater biodiversity-business integration.

5. Conclusion: A Call to Action for Businesses

As another year passes, we have the opportunity and responsibility to address the biodiversity crisis. With net positivity in mind, biodiversity needs to be considered across a business, from boardroom to operation, and across the project life cycle, from planning and exploration to closure. Moving beyond compliance to align with best practice and frameworks, particularly the TNFD, allows businesses to mitigate risks and embrace the opportunity of becoming stewards of nature.

Now is the time to plan, collaborate and take action for a nature-positive future where our ecosystems are conserved. This is not just a necessity for planetary health but also strategic for long-term economic resilience.