Preserving the natural world – driving biodiversity into the business

To date we have really struggled to create a balanced approach to sustainability. While elements of social change (forced labour, minimum wage requirements, etc.) have been a part of the corporate lexicon for years and carbon has been a focus of at least the past decade (for most!), a just transition that puts the planet at the heart of decision making has yet to really land – despite targeted efforts in prior years around preservation of endangered species, deforestation and ocean protection.

With the release of things like the TNFD framework, governments building biodiversity into planning rules (e.g. UK requiring a biodiversity net gain of 10%) and corporates looking to put bio-diversity/planetary protection into the core of what they are doing, this is rapidly changing – driving biodiversity up the corporate agenda.

Yet biodiversity is an incredibly complicated topic. Looking at it from a corporate perspective, it covers everything from the physical footprint of a business’s capital assets, through how products are made and what they're made of, to how they are disposed of and the residual impact of all of those stages on the planet. Comparability is also complicated. We need to be able to compare everything from a wildflower meadow to a mangrove swamp to a cod spawning site and everything in between. Being able to put values to this is incredibly difficult and can be very subjective. Even in more simple elements of sustainability such as carbon, the ability to calculate the overall carbon intensity of a business is still very complicated and fraught with issues of both comparability and under reporting. For biodiversity this complexity is taken to another level.

So how are businesses handling this. In reality what most businesses are doing is breaking this down into digestible chunks. This may manifest as:

• Determining the biodiversity impact of capital projects and meeting regulatory requirements of biodiversity net gain in the build (using offsets as needed). This is increasingly going to impact decisions around things like siting of assets, making the use of greenfield sites more complex due to their potentially higher biodiversity baseline numbers in comparison to brownfield and the complexity of attempting to deliver a 10% net gain on top of the biodiversity loss of the original site post build.
• Including biodiversity in a more structured way into life cycle analysis of products. This will need to incorporate a review of the materials to be used, how they are produced and the associated biodiversity impacts of that production, all the way through to how the materials potentially will be recycled and how to prevent harmful materials leaching out into the environment. Much of this is way beyond the current levels of understanding of most corporates of their supply chains. We are after all struggling still to get the core data needed to be able to track the social issues required by the European supply chain act and carbon numbers to determine carbon baselines, never mind the complexity that is associated with biodiversity

With biodiversity tools in the early stage of development, the approach taken is one of rough estimation and then creating a direction of travel for delivery. This is more true on the product side than the capital side where regulation on the capital side is now coming in to provide at least a high level of structure for comparability purposes.

So how do we deliver biodiversity for business? The steps that we are seeing organisations take are in fact very similar to how carbon has been handled:

1.???? We start with baselining current activity. This will look at everything from the physical capital assets of the business through to how biodiversity plays in product design, delivery and across the supply chain. In most cases this requires the use of specialists to come in and understand potential impacts and then map actual impacts through physical auditing. Using proxies will be a key part of this as well as leveraging simplified eco-system categorizations in order to come to at least a half decent view of the entire biodiversity impact of the business.

2.???? The next stage is to define the strategy. This will need to include an understanding of the key risks using tools such as TNFD as well as determining where the business wants to make a stand and how that then manifests in the form of its products and services. Understanding regulatory requirements will also be core at this point, both current and those that are being signalled at the moment across the various global jurisdictions. Determining at this point the approach from product redesign through to on site mitigation and how and where credits and offsets will be used will then be a critical part of the process. As in most cases this is not a regulatory requirement at the moment, developing the cost/benefit analysis around the biodiversity pieces to fit within the current strategy will be a part of the decision making process

3.???? The third stage will then be determining where to focus first and how to drive biodiversity improvements across the business. Examples of this are the design of biodiverse physical infrastructure for new capital projects, supporting supply chain providers on building out biodiversity approaches for their businesses and determining how circularity will be incorporated into the overall product design and delivery. Looking at how to then turn that into a business benefit making it part of the corporate approach and delivering it as part of the overall brand message is also going to be a key part of that delivery. We want organisations to be aggressive around how they go after this highlighting the value that this creates for their customers in order to accelerate what has been limited progress to date

4.???? The last part of the picture (although this will be done in parallel to stage 3 above) is then determining how to address the gap between current performance and where the organisation needs to be. For capital projects again particularly in countries like the UK, determining what can be done on site and what therefore needs to be bought as credits will be a key part of the design process. Biodiversity net gain credits will incorporate both the development of the site and 30 years worth of management so the costs of these will not be low. In the UK the proposed statutory credit range is from around ￡40,000 to ￡650,000 depending on the type of habitat. For operational business delivery, leveraging nature positive credits to support the delivery of the businesses targets in the short term will be needed as solutions to complex on the ground problems (from product design to circularity) are developed

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What I have done here is tried to highlight in around about a thousand words what is an incredibly complicated topic (apologies if I have over simplified to much!). On all other elements of sustainability we have seen organisations relying on specialists to support everything from the management of social issues in the supply chain through to water and carbon. For biodiversity that degree of expertise requirement is going to go up. We will need everything from experts within habitat recognition and design, through to lifecycle management of key components of products, to the development of biodiverse ecosystems around the facilities of an organisation.

This like every other element is sustainability will need to be done in a way that plays to a set of regulations, calculations and credits that are still forming, so a best efforts approach will be needed but built in a way that anticipates the direction of travel and will future proof solutions as they are being developed (as much as they can be) in order that they can simply course correct in the future. The direction of travel around most of this is relatively predictable as the thinking is developing along similar lines to other elements of the sustainability journey - for example TNFD has replicated much of the structure of TCFD. Leveraging full-service solutions from partners and suppliers around biodiversity to be able to support organisations while they build out their own capabilities I think will be an essential element of that future delivery.