Ten ways biodiversity is good for your business

Positive effects of supporting biodiversity apply across all industries. Some of the outcomes may come as a surprise. However, finding the most impactful way to engage with biodiversity remains an issue for many companies. 

‘Interlinked’ would likely be among the leading contenders for word of the year winner in 2022 if the poll only involved companies.

The early parts of the 2020s have underlined the global nature of supply chains, business operations, and customers. Being a locally focused company provides little or no insulation from ongoing global trends, including energy prices, rising inflation and interest rate hikes. 

Biodiversity is no different. As my enteleco colleague, Tove Kinooka, eloquently describes it, biodiversity loss can affect companies in a multitude of negative ways. These effects are already visible, as animals, plants and entire ecosystems are disappearing at an alarming rate. However, she also points out how maintaining and increasing biodiversity can positively affect businesses. 

The interlinked nature of biodiversity’s effects on our health, livelihoods, and well-being is mirrored by its economic importance. Today, more than US $44 trillion of economic value, or more than half our global GDP – is either moderately or highly dependent on nature and its services.

Here I have gathered some of the most profound positive impacts that protecting and encouraging biodiversity can have on companies. 

1: Biodiversity and resource availability 

Many companies rely on a broad range of natural resources for their operations. Ensuring the continued availability of resources like timber, food, water, and minerals helps ensure operational stability. Conversely, loss of biodiversity may create scarcity and increase costs. Biodiversity is also core to innovation. For example, pharmaceutical companies need plants to make and develop drugs. One study suggests that the value of marine biodiversity for anti-cancer drug discovery could be counted in trillions of dollars.

2: Biodiversity and health 

Biodiversity plays a vital role in the health and well-being of individuals and communities. For example, biodiversity plays a core role in air quality, soil formation, and limiting exposure to pathogens. The effects range from microbial to global. None of your employees, customers, or collaborators exists in a vacuum, and protecting biodiversity can equal healthier, happier, and more productive interactions with all those groups. 

3: Biodiversity and supply chains 

Global supply chains are heavily dependent on local conditions for stability. As put by the World Economic Forum, biodiversity loss can ‘disrupt entire supply chains.’ For example, the loss of mangrove biodiversity can increase climate risks, such as floods. If you or your collaborators have operations in such areas, the risk of worsening floods increases the risk of supply chain issues. In contrast, increased biodiversity can positively impact supply chains and thereby minimise risks of disruptions. 

4: Biodiversity and lower operational costs 

Companies succeeding with sustainability and ESG can testify that positive results go beyond compliance and risk management. For example, improving water recycling equals lower overall operational costs. Similarly, biodiversity initiatives like organic pest management practices can improve biodiversity outcomes and lower production costs. An OECD report shows similar benefits across other industries.

5: Biodiversity and future-proofing operations 

Loss of biodiversity can seriously impact the long-term sustainability of your businesses. This fact applies across all industries and in sometimes surprising ways. For example, some insurance companies are very dependent on biodiverse coastal wetlands. These wetlands help minimise the impacts of big storms on houses and infrastructure, thereby lowering insurance claims. During Hurricane Sandy in 2016, marsh wetlands in the US negated approximately US$625 million of damages.

6: Biodiversity and company reputation

A recent study showed that executives attribute 63% of their company’s market value to their overall reputation. It follows that damages to your reputation due to actions that harm biodiversity directly impact your company’s value. In contrast, measures that support or increase biodiversity can enhance your reputation and overall market value.

7: Biodiversity and customers 

A 2020 survey of 6000 consumers had a clear message for companies: consumers want companies to do more for biodiversity. This was particularly true for younger consumers. In other words, customers are increasingly focused on biodiversity, which is becoming an influential factor in their shopping preferences. Meeting their values and priorities is central to building lasting customer relationships.

8: Biodiversity and market share 

Following the previous point, companies’ biodiversity efforts compared to their competitors may become a deciding factor in gaining market share. As mentioned in this World Economic Forum article, 75% of US Millennials and 63% of Gen Z are willing to pay more for sustainable products. On the other hand, companies with negative impacts on nature can lose market share as consumers’ environmentally-conscious purchasing behaviours continue to gain traction.

9: Biodiversity, legislation, disclosures, and incentives 

In 2019, France issued a new decree under article 29 of its law on energy and climate. It set forth new requirements for companies’ biodiversity disclosures. Other countries, including Indonesia, Costa Rica, and Australia, have introduced biodiversity-related legislation, requirements and incentives. More countries are expected to follow. Ensuring compliance and using incentives as early as possible not only helps companies minimise disruptions but can also supplement revenues.

10: Biodiversity, purpose and employees 

Help your employees find purpose - or watch them leave. This warning from a 2021 article by McKinsey underscores how modern companies must think holistically to attract and retain talent. Being part of a purpose-driven company is high on the wishlist for modern employees. Part of the purpose employees want is to work for companies that embrace their moral and ethical responsibility to protect biodiversity as stewards of the natural world. 

How to get started with biodiversity

Companies will often find themselves in uncharted territory when considering biodiversity initiatives. Usually, the optimal approach will be collaborating with outside experts, but there is much that companies can do on their own to get the ball rolling. Tove Kinooka has detailed what such an approach can look like, which you can see here. See an overview below: 

• Visualise: Map out your impact on the ecosystems where you and your collaborators operate.

• Focus: Conduct a materiality assessment and consult biodiversity experts to identify critical risks and opportunities.

• Educate: Build awareness of how biodiversity relates to your business and that of your key stakeholders.

• Incentivise: Build sustainability KPIs into your executive and management performance assessments.

• Collaborate: Identify partners for creating mutually beneficial solutions.

Connecting issues, actions, and business outcomes

Having a clear strategy and targets for action on biodiversity is only half the story - transforming the culture in your organisation so that it encourages and supports the implementation of those ambitions is equally important. 

At enteleco, we specialise in shifting mindsets and behaviours by helping your people to “connect the dots” between their everyday actions, your sustainability ambitions, and their real-world impact. 

If you would like to discuss how we can support your organisation to unleash the potential of your people for positive impact, do get in touch!