Carbonsink - Corporate biodiversity action: the why and how

Biodiversity plays a vital role for all life on Earth and relies on a fine balance among the planet’s natural ecosystems whose health is critical to ensure human well-being, maintain and improve production systems, increase resilience to climate change, and add value to businesses of all sectors and sizes. Despite this, biodiversity is declining faster than at any time in human history, with natural ecosystems having declined by 47% on average, relative to their earliest estimated states (IPBES).

Forward-thinking businesses and investors are beginning to harness the links between biodiversity and climate, understanding the interdependencies of business activities and embedding the value  of nature within their value chains. Businesses and investors understand that biodiversity drivers such as pollution, changes in land, water and sea use, and climate change are directly or indirectly linked to their operations - and the link is bidirectional. The nature and climate crisis presents a genuine risk for the future of companies. As the World Economic Forum puts it “biodiversity loss represents an unprecedented systemic portfolio risk for investors as $44 trillion of economic value generation is moderately or highly dependent on nature and the services it provides”. 

The good news is that the market is changing too. The adoption of new policies, regulatory and disclosure frameworks - such as SBTN, TNFD, CSRD - facilitates corporate action and reporting to meet the growing customer and investor demand for corporate and product sustainable performance. In particular the Science-Based Targets Network (SBTN) plays a crucial role in helping businesses to align their activities with the biophysical limits of ecosystems. The framework defines quantitative and measurable targets, through the application of a methodology published in May 2023, and ensuring that business activities safeguard ecosystems and achieve effective positive action on nature - understood as biodiversity, climate, land, freshwater and oceans. The SBTN equips companies to assess their environmental impacts and establish their science-based targets for nature. The framework encourages companies to work together to incorporate concepts of thresholds and boundaries into corporate decision-making, which is essential for the long-term sustainability of both businesses and the planet.

New and innovative financing mechanisms are also emerging and contributing to closing the critical financial gap for biodiversity conservation, representing a profitable opportunity for companies and communities in today's competitive world. Biodiversity credits, for example, are an innovative approach to quantify in a transparent way the net positive impacts of a company’s investment on 1 hectare preserved, restored, or managed through sustainable land practices. 

At a time when consumers and other stakeholders are more concerned about environmental issues than ever, companies that prioritise climate and biodiversity conservation will acquire a significant competitive advantage. Investing in climate and biodiversity now means minimising future risks and future proofing the business as well as aligning to upcoming regulations, frameworks and ratings - ensuring investors’ confidence. On top of that, acting now provides companies with the power to lead by example and demonstrate their commitment to a sustainable future while protecting the viability of their business.