The Looming Biodiversity Crisis: Why Business Must Embrace Nature to Survive
A fundamental shift is underway in how the world views the relationship between business and the natural world. A landmark report from the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) reveals a stark truth: the current business model, prioritizing growth at the expense of nature, is not only unsustainable but actively threatens our future.
The Interdependence of Commerce and Biodiversity
For the first time, scientists and business leaders have collaborated to assess how commerce both impacts and depends on biodiversity. The report underscores that businesses cannot function without a healthy natural world. From the pollinators crucial for fruit production to the coral reefs that support fisheries, the foundations of many industries are directly tied to the health of ecosystems. As Ryo Kohsaka of the University of Tokyo, coordinating lead author of the report, explains, businesses are “exhausting the basis for our daily life” and undermining nature’s contributions to society.
Consider the agricultural sector. Whereas production has increased by 300% since 1970, up to $577 billion in annual global crop output is now at risk due to declining pollinator populations and land degradation. This illustrates a critical point: environmental degradation isn’t just an ecological issue; it’s a significant economic risk.
The Scale of Misaligned Finance
The problem isn’t a lack of financial resources, but rather their misallocation. In 2023, a staggering $7.3 trillion flowed into enterprises with demonstrably negative impacts on nature, with approximately two-thirds originating from private sources. A mere 3% – $220 billion – was invested in biodiversity conservation. This disparity, highlighted by recent UN analysis, shows that “harmful investments” outweigh those supporting environmental protection by a factor of 30.
Much of the government subsidies continue to prop up industries driving biodiversity loss, particularly fossil fuels, and agriculture. These “perverse incentives,” as the IPBES report terms them, perpetuate unsustainable practices.
Accountability and the Need for Systemic Change
A key challenge is the lack of accountability. Fewer than 1% of publicly reporting companies currently disclose their impacts on biodiversity. The absence of “adequate rewards and penalties” hinders progress, and the relentless focus on quarterly earnings and shareholder dividends reinforces the cycle of unsustainable consumption.
Ximena Rueda, a researcher at Colombia’s Universidad de los Andes and co-chair of the IPBES assessment, emphasizes that better engagement with nature isn’t optional for business – it’s a necessity. She suggests that environmental “stewardship” is “vital for their bottom line [and] long-term prosperity.”
Transforming Business: A Five-Component Framework
The IPBES assessment doesn’t simply identify the problems; it offers a pathway toward solutions. It proposes aligning five core components of business to foster sustainability:
- Policy, legal and regulatory frameworks
- Economic and financial systems
- Social values, norms and culture
- Technology and data
- Capacity and knowledge
The report provides over 100 concrete examples of actions businesses can accept, emphasizing the need for collaboration between governments, consumers, businesses, NGOs, Indigenous Peoples, and local communities. Stephen Polasky of the University of Minnesota, co-chair of the assessment, argues that biodiversity stewardship is “central to managing risk across the whole of the economy and throughout societies.”
Pro Tip
Businesses can start by conducting a thorough assessment of their supply chains to identify and mitigate biodiversity risks. This includes mapping dependencies on natural resources and engaging with suppliers to promote sustainable practices.
Frequently Asked Questions
Q: What is IPBES?
A: The Intergovernmental Platform on Biodiversity and Ecosystem Services is a global independent research body comprising more than 150 member states’ governments.
Q: What is meant by “perverse incentives”?
A: These are policies or financial structures that unintentionally encourage environmentally damaging behavior.
Q: Is this report only relevant for large corporations?
A: No. The principles outlined in the report apply to businesses of all sizes, as all economic activities have some impact on biodiversity.
Q: What can consumers do to support biodiversity?
A: Consumers can support businesses committed to sustainable practices, reduce consumption, and advocate for policies that protect the environment.
Did you realize? Investing in nature-based solutions can generate significant economic benefits, including job creation and increased resilience to climate change.
What steps will your organization take to address the findings of the IPBES report? Share your thoughts in the comments below, and explore our other articles on sustainable business practices for more insights.
