Loss of Biodiversity: Companies Face Extinction Risk – Scientists Warn

Measuring CO emissions₂ is poised to become an essential step in business reporting. The impact of the destruction of biodiversity is much less so. However, companies are much more dependent than they think on lack of water, the risk of flooding or even deforestation, to take just a few examples.

This is the whole purpose of the IPBES evaluation report adopted this Monday during its plenary session in Manchester. IPBES, often called the “IPCC of Biodiversity”, is an intergovernmental body composed of more than 150 members, whose objective is to provide political decision-makers with objective assessments of the state of knowledge concerning ecosystems and biodiversity.

“This report should allow companies to better identify their dependencies on biodiversity. The goal is to bring the private sector, SMEs and large groups, into action to protect ecosystems by providing them with the right tools,” explains Barbara Pompili, environment ambassador attached to the Quai d’Orsay.

For the first time, personalities from the business world, such as TotalEnergies or Solvay, participated in the drafting of the report, which represents nearly three years of work. An initiative which made it possible to take into account the realities on the ground.

Tipping points

Not all companies have the same degree of maturity on these subjects. Depending on the sector, dependence on ecosystems can be very different: agri-food and agriculture are on the front line, of course, because these sectors are both the origin of part of the loss of biodiversity – due to the use of pesticides for example – and the first victims of its degradation – with the reduction in agricultural yields or the decline in pollination. But all sectors are, in one way or another, affected, the researchers insist.

“Biodiversity loss is one of the most serious threats facing businesses,” said Stephen Polasky, co-chair of the IPBES assessment. However, the paradox is that it often seems more profitable for companies to degrade biodiversity than to protect it.

But if the “status quo” may have seemed more profitable in the short term, “the impacts of several companies can have cumulative effects which, when combined, can take us across ecological tipping points,” continues the researcher. “Businesses have a choice: lead transformative change or risk extinction,” the report sums up very bluntly.

The difficulties of extra-financial reporting

However, change is anything but simple for economic actors. “Too often, businesses spend more time trying to decipher complex and competing compliance frameworks than taking meaningful action,” says Stephen Polasky.

The multiple postponements and relaxations that were necessary to adopt the CSRD directive on extra-financial reporting in Europe are proof of this. Business leaders felt paralyzed by the more than 1,000 indicators offered to them to measure the impact of their activity on ecosystems.

Result ? Less than 1% of companies currently publish reports mentioning their impact on biodiversity in their public reporting.

“Look for a single metric, like for CO emissions₂is not possible for biodiversity. This is an element of complexity that cannot be ignored. But one of the major contributions of this report is precisely to provide clarity in traceability methods. One of the challenges also relates to the integration of these measures into companies’ accounting systems. Some have a purely instrumental vision of biodiversity, others more focused on accountability, on what they owe to nature. Simply analyzing financial risks is a first step, but it is not enough to support truly transformative changes,” analyzes Clément Feger, lecturer at AgroParisTech and co-author of the IPBES report.

Crisis of multilateralism

The authors of the report insist on its methodological and operational nature. They therefore offer around a hundred fact sheets with concrete actions to take. Both for businesses, financial players and governments.

The redirection of part of global financial flows is part of this: in 2023, public and private flows having a negative impact on biodiversity have been estimated at 7,300 billion dollars. For comparison, 220 billion dollars were directed over the same period towards actions contributing to the conservation or restoration of biodiversity.

The report as such has no binding value, but the mere fact that the summary for decision-makers has been initialed by nearly 150 governments is already a diplomatic success. “In the current climate of loss of confidence in the role of science and crisis of multilateralism, finding a compromise and having a constructive discussion on these subjects is already a lot,” concludes Clément Feger.