Reimagining the Role of Business in Protecting Biodiversity

(iStock/WhitcombeRD)

The landscape of corporate environmental responsibility is evolving beyond a focus on climate issues to more holistically account for nature-related risks, such as biodiversity loss. Recognizing the very real threat to global economies and ecosystems posed by biodiversity loss, prominent global corporations are venturing beyond the atmosphere and into the biosphere. As one executive passionately said in a recent interview, “climate action is non-negotiable, but the race to outpace biodiversity loss is even more crucial. Our planet, and our profits, hinge on it.”

Corporations are starting to make pledges to fight biodiversity and nature loss, but the path forward remains murky. Metrics are hazy, and linking individual actions to broader jurisdictional biodiversity goals and commitments remains a challenge. Clearing this fog is crucial for companies to confidently take decisive steps and communicate their impact. Enter the Taskforce on Nature-Related Financial Disclosures (TNFD). In January 2024, over 300 organizations globally, from across industries and the financial sector, committed to nature-related disclosures based on TNFD’s recommendations, published just months prior. The hype was significant, with coverage by prominent business outlets like The Wall Street Journal.

The TNFD’s arrival marks a significant and hopeful leap, but it’s not a finish line. Many critical scientific questions surrounding biodiversity conservation remain unanswered, demanding continued exploration by both the private sector and the scientific community. We must also remember that inclusion on the TNFD early adopter list in itself doesn’t mean an organization is improving its biodiversity footprint. It is merely a starting point for them to understand their nature-related risks, impacts, and dependencies. While signing on is an important first step, following through with concrete and impactful action will be what truly matters.

Biodiversity Loss and Global Corporations

The imminent loss of one million species presents a grave threat, impacting human health, food security, rural communities worldwide, and over half of the global GDP. To combat this crisis, governments and international bodies have turned to diverse policy frameworks for biodiversity preservation at national, regional, and global levels. These policies hold a clear expectation for global corporations to engage in and promote biodiversity conservation and restoration. For instance, target 15 within the Global Biodiversity Framework (GBF)—agreed to by 188 governments in 2022 during the 15th Conference of the Parties (COP) to the UN Convention on Biological Diversity in Montreal—specifically urges large multinational companies and financial institutions to take comprehensive actions for conserving and enhancing biodiversity.

Corporations not only face political pressures to respond to the biodiversity crisis but also recognize a compelling business case for halting biodiversity loss. Firstly, political pressures swiftly translate into societal and consumer expectations, making biodiversity conservation a crucial element of corporate environmental reputation. Secondly, numerous industries depend on ecosystem services like pollination and flood control, which, in turn, rely on maintaining biodiversity and ecosystem processes. Thus, biodiversity loss presents a tangible operational risk to these industries. Thirdly, central banks and financial institutions increasingly view biodiversity loss as a systemic risk to financial systems. Investors and shareholders are also taking notice—biodiversity loss is one of the fastest-growing themes in ESG investments and disclosures. Effectively managing biodiversity risks has become an imperative in the financial market.

TNFD: Promise and Fault Lines

To streamline corporate efforts to assess, disclose, and manage biodiversity risks, TNFD was first launched in 2021 as a market-led initiative serving the purpose of a disclosure framework. TNFD comprises 40 members representing financial institutions, corporations, and market service providers with over $20 trillion in assets. Funded by several governments and organizations, including Australia, France, Germany, the Netherlands, Norway, Switzerland, the United Kingdom, the Children’s Investment Fund Foundation, the Global Environment Facility, the Macdoch Foundation, and the UN Development Program, the TNFD guidelines are meant to make biodiversity reporting consistent with other financial and sustainability reporting frameworks such as the International Sustainability Standards Board (ISSB).

The TNFD has sent ripples through the corporate world, with executives eager to navigate the uncharted waters of nature conservation. But for those expecting a neat roadmap, the journey promises to be more open-ended. TNFD is not a “how-to” manual; it is a framework for identifying business risks and dependencies on nature. For crafting concrete goals for action, it points companies towards the Science Based Targets Network (SBTN). There, they will find a specific process for setting measurable targets for areas like water and land use, but not a menu of actionable solutions. For instance, SBTN’s freshwater guidance published in January 2024 outlines how companies should identify water use and stewardship goals, but it does not offer specific changes they should make to protect freshwater on their sites or in their watersheds. SBTN empowers companies to define their own path and verifies that their goals align with scientific recommendations, an important stamp of approval for companies that want to steer clear of greenwashing. In doing so, SBTN recognizes that context and individual circumstances matter. While this may feel like less hand-holding, it is actually an acknowledgment that one-size-fits-all biodiversity solutions do not exist. In essence, TNFD and SBTN do not offer a pre-packaged solution but rather ignite a process of self-examination and strategic action. Companies’ search for concrete actions—or metrics—merely starts when engaging with these frameworks.

Recent history in the corporate climate domain teaches us that recognizing risks does not always translate into real action. Some companies may take genuine steps, while others might resort to symbolic gestures—“nature-washing” their true impact or leveraging TNFD for visibility without substantive change.

The framework’s flexibility can be a double-edged sword. Companies who sign on are not forced to report on all of TNFD’s 14 recommendations, allowing savvy manipulators to pick and choose easy wins and mask harder truths. Disclosing negative impacts is also optional, creating a potential greenwashing haven for companies eager to project a commitment to biodiversity while hiding their actual footprint. Finally, the sheer volume of reporting requirements could inadvertently inflate the perception of effort, allowing crafty players to game the system. Ultimately, TNFD is a powerful risk assessment tool that helps companies direct their efforts toward the most impactful areas of their operations and allows policymakers, journalists, shareholders, and investors to hold them accountable. Yet, as long as it remains voluntary and adaptable to individual company needs, its effectiveness in triggering robust actions hinges on genuine corporate commitment and robust follow-through.

Beyond the TNFD Hype: Five Must-Dos to Halt Biodiversity Loss

TNFD has undoubtedly achieved its initial goal: equipping businesses with a framework to assess their nature and biodiversity risks. It has also accelerated a global dialogue among companies about the urgency of protecting our natural world. However, a fundamental question remains: What concrete actions can businesses take to halt biodiversity loss and drive nature’s regeneration? While TNFD, SBTN, and numerous other organizations are diligently searching for answers, it is important to acknowledge that conservation debates have stretched on for decades. Although there is general agreement on some conservation principles—e.g., losing primary intact forest results in biodiversity declines—it is unlikely we will have universally agreed-upon targets for all biodiversity measures anytime soon.

This doesn’t mean corporations should stand idly by. Thankfully, existing knowledge from conservation and business management offers a wealth of guidance. We already have enough to identify clear action categories that sincere companies can leverage to build robust biodiversity protection plans. Reviewing the literature, we distill the five following actions that companies can take. We also highlight existing private-sector initiatives in these five areas—with the caveat that they are merely examples of work headed in the right direction rather than an endorsement of the companies’ sustainability efforts.

1. Reduce and better manage your land footprint.

At the most fundamental level, conserving biodiversity means conserving more undisturbed area. Therefore, a crucial aspect of a company’s biodiversity strategy should be minimizing the use of land for their operations. Secondarily, reintroducing biodiversity features (e.g., pollinator gardens) into areas under commercial, residential, agricultural, or other uses can offer meaningful benefits.

For companies in land-based sectors (i.e., agriculture and forestry), land reduction and management opportunities lie in adopting innovative products and increasing the productivity and biodiversity features of their working lands. For example, for food and agriculture companies, supporting the shift from animal to plant-based foods is one of the most impactful biodiversity measures they can adopt. A 2018 study showed that, on average, producing 100 grams of beef protein requires 125 times the land of producing the same amount of protein through peas. This is why global meat and dairy consumption has been one of the primary drivers of deforestation and its embedded biodiversity loss. Some companies are already acting on these insights. Sodexo, a company primarily catering food in corporate and university cafeterias, is transitioning a third of its dishes to be plant-based by 2025. International Paper offers a compelling example for introducing ecological principles into land management approaches by teaching the forest owners it sources from about bird conservation practices and tools.

For companies operating in non-land-based sectors (i.e. manufacturing and service organizations), reducing their land footprint entails optimizing the utilization of existing built spaces, infrastructure, and parking areas. More crucially, opting for vertical rather than horizontal expansion presents a compelling solution. Using reduced “total land footprint per unit revenue generated” can serve as a fundamental measure for corporate commitment to biodiversity conservation.

2. Reduce your chemical use and eliminate toxic waste streams.

Soil and water pollution are primary contributors to biodiversity decline. To genuinely prioritize biodiversity conservation, companies must reduce the volume of toxic chemicals throughout their entire value chains. This necessitates a thorough examination of the chemicals utilized in their products, processes, and day-to-day operations, with a steadfast commitment to eliminating those that pose risks to ecosystems. Shifting towards bio-based materials and amplifying research and development investments in “green chemistry” innovations could serve as pivotal indicators of a company’s dedication to biodiversity-friendly practices.

Recent research, development, and deployment breakthroughs in the green chemistry industry mean that cleaner solutions are available and waiting to be widely adopted. For instance, the start-up Solugen has developed a novel process that uses genetically engineered enzymes to process bio-based feedstocks into cleaning solutions, personal care products and other chemicals while eliminating toxic outputs and reducing energy consumption. Solugen is currently constructing a commercial biomanufacturing facility to scale production—and it is just one of many innovators in this market.

3. Contribute to ecosystem restoration.

Engaging in ecosystem restoration activities is a direct means for companies to address prior harm inflicted upon ecosystems. When integrated with other measures, this involvement becomes a tangible gauge of a company's commitment to biodiversity conservation. Collaborating with local conservation groups, Indigenous communities, and other experts allows companies to craft tailored restoration strategies specifically designed for the ecosystems impacted by their operations. It's vital that these plans adhere to the best practices in ecological restoration, prioritizing the reintroduction of mixed, native species plantings; habitat rehabilitation; and sustained long-term monitoring. Implementing such initiatives, especially in biodiversity hotspots, could yield significant positive impacts.

Salesforce is one of the companies championing restoration initiatives. It supports 1t.org, an initiative to conserve, restore, and grow a trillion trees by 2030, and the Mangrove Breakthrough, which aims to conserve and restore 15 million hectares of mangrove ecosystems by 2030. Both are complex, global, multi-stakeholder partnerships that have accelerated international support for restoration efforts.

4. Adopt circular solutions.

Any measure that can reduce demand for new materials can contribute to halting and reversing biodiversity loss since it allows more land to be used for conservation rather than production or extraction. Companies should adopt measures to reduce their overall use of materials, reuse products, source recycled materials and compost organic waste. These circularity principles can be applied across sectors. Instead of constructing a new office, manufacturing or retail site, companies can first restore existing buildings. They can switch to reusable dishware in their offices and cafeterias and manufacture product packaging from recycled materials. It is also important to redesign products so they can more easily be repaired and recycled. Lastly, companies can consider offering or procuring rental services.

Recognizing the industry’s waste problem, some fashion companies have, for example, been exploring circular alternatives. Patagonia and Allbirds are among the companies now offering second-hand products and Crocs is experimenting with a take-back program for worn shoes to learn how to reuse the materials.

5. Cultivate biodiversity-friendly organizational cultures.

For effective biodiversity conservation, companies must cultivate an internal culture where employees champion this cause. Sensitizing them to local ecological needs through tailored programs, workshops, workplace exposure and field visits is key. This breeds awareness and appreciation, sparking innovative thinking for conservation strategies. Encouraging volunteerism and partnering with local conservation groups can instill purpose and responsibility, making biodiversity conservation a shared and genuine pursuit among employees, and reflected in companies’ strategies and actions.

Another important component of a biodiversity-friendly organizational culture is assessing how a company’s core competency can provide valuable tools and resources for the global biodiversity movement. In this realm, Google has collaborated with various scientists and conservation organizations. Earth Engine is one example of Google’s environmental tools. It’s a geospatial platform that allows for better ecosystem monitoring and management and is used by important conservation projects such as Global Forest Watch and Global Fishing Watch.

When considering pursuing efforts in line with these five action areas, it will be important for companies to adopt a holistic view of their direct and indirect global impacts since a measure that appears as a positive shift at first glance may have severe impacts. For example, the rising demand for biofuels, triggered by the need to shift away from greenhouse gas-intensive petrochemicals, is leading to the rapid conversion of native ecosystems in the United States and elsewhere. This downstream effect puts the climate benefit of biofuels into question and advances biodiversity loss. Such unintended consequences may also be embedded in the hastened adoption of other “solutions.”

Finally, companies need to acknowledge that biodiversity conservation is not just a scientific endeavor; it’s a social enterprise. So, a company's commitment to biodiversity can also be measured by its level of community engagement in its conservation efforts. Seeking input and feedback from Indigenous peoples and local communities should be fundamental to corporate biodiversity initiatives across the five action areas above. Understanding how communities rely on biodiversity and prioritizing aspects that align with their interests is crucial. Leveraging community knowledge about local ecosystems can significantly enhance the development of strong biodiversity conservation projects, especially in restoration endeavors. Companies should actively explore partnerships with community-led conservation initiatives as well.

Would Corporate-Led Efforts Suffice in Safeguarding Biodiversity?

We stand at a crossroads. Our era, the wealthiest in human history, is also one witnessing the decline of life and its support systems. This paradox, a clash between incessant economic growth and the very essence of life, exposes a deeper truth: Our current system of production and consumption is unsustainable.

While our proposed actions would significantly lessen the corporate footprint on nature, they may not be enough to avert the full biodiversity crisis. True transformation demands bolder strokes: relocating industries away from ecological hotspots, optimizing maritime routes, eliminating harmful subsidies, and building localized production networks to cut global trade. This seismic shift would not be driven by mere voluntary initiatives. It requires robust industrial and public policies that prioritize biodiversity conservation and address the root of the issue: excessive consumerism.

While a wave of global policies is rising, aiming to steer corporate practices towards biodiversity conservation, their impact remains blunted. Stringent efforts such as the European Union’s Deforestation Regulation (EUDR) that require companies to align their sourcing practices with climate and biodiversity goals if they want to continue accessing the European market are few and far between. In contrast, many other recent policies, including the European Sustainability Reporting Standards’ dedicated biodiversity section, the UK's 2021 Environmental Bill, and even actions in US states like California and Maryland, function more as gentle nudges towards “good practices” than forceful levers for substantive change. Even the much-hyped GBF lacks clear, stringent directives for corporations. Perhaps the most glaring oversight is the failure to acknowledge the elephant in the room: the inherent tension between economic growth and biodiversity loss. Almost all existing policy frameworks aim to “align markets with nature” a pursuit that historically has tilted the scales towards market forces, leaving the natural world teetering on the precipice.

Similarly, TNFD treads a market-driven path, prioritizing investor protection through structured and standardized reporting. Like other frameworks, its emphasis falls on facilitating information exchange and influencing markets, rather than directly tackling the core issue. This is not a critique of TNFD itself; its emergence is timely, considering private finance’s critical role in bridging the vast $700 billion annual funding gap for biodiversity conservation. However, vigilance is necessary on two fronts. First, we must guard against greenwashing: opportunistic corporations exploiting TNFD’s intricacies to mask inaction or inflate minor efforts. Second, we must invest heavily in conservation science and the accessible communication of findings. Developing and fostering a widespread understanding of robust metrics and tools are essential for effective monitoring and management.

While corporate allies are vital in the fight for biodiversity, relying solely on market mechanisms and investor whims risks replaying the tragic script of the climate crisis: inaction, greenwashing, and ultimately, oblivion. To avert ecological catastrophe, we need robust public policies and regulations that hold corporations accountable for their ecological footprint. The true trailblazers amongst them will be those advocating for these regulations.

Imagine a world where, instead of lobbying for lax environmental laws and harmful subsidies, corporations become champions for biodiversity protection. They spearhead stricter biodiversity regulations, invest in cutting-edge conservation solutions, promote scientific research, and lead by example in their own operations. This is not a utopian dream; it is the necessary evolution of corporate responsibility in the face of the biodiversity crisis.

Read more stories by Rajat Panwar, Theresa Lieb, Sarah Federman & Matthew Betts.