Biodiversity and Business: A Practical Guide
What is Biodiversity?
Practically, biodiversity is synonymous with “nature.” This includes the ecosystems we are a part of, and the services like food, water, and clean air that we depend on nature for.
Technically, biodiversity is a measure of how many different types of plants, animals, and other organisms live in an area. Generally, more diverse range of native plants and animals found in an area mean that the nature, and biodiversity, are healthier and more robust.
Why does it matter?
Nature supports life on our planet - including us. Healthy ecosystems and biodiversity provide many critical services and benefits to our society, called ecosystem services. A few examples:
Food: Flying insects like bees, butterflies, and flies are important pollinators. Without these insects moving pollen between flowers, many types of fruits such as cherries and apples would not be produced.
Water: Humans, agriculture, and industries all need clean water to survive. This water can be collected from underground (stored in an aquifer) or from surface waters like rivers and lakes. Trees, forests, and healthy vegetation next to surface water helps keep it clean, filtering out pollutants during storms, and directing excess water back into the ground to slow down flooding.
Shelter: Many homes are constructed using wood, which is harvested from trees. These trees may have grown in a forest ecosystem, or on a plantation where they needed good soil and the right microorganisms to grow.
Protection: Natural dunes, sea grasses, marshes and mangroves stabilize coastal shorelines. When major storms like hurricanes hit the coast, healthy ecosystems can absorb the power of the storm, protecting homes, roads, and infrastructure on land.
How can I measure biodiversity?
Biodiversity is complex, and there is no consensus on how to benchmark biodiversity. Most corporations and regulations like CSRD and the Nature Restoration Law use area-based approaches. These measure the area of land used for operations, as well as the areas of land protected from development or restored. Other approaches include impacts on rare protected species or complicated LCA-based approaches that include a multitude of impact factors such as pesticide and freshwater use.
How does this impact a SME?
Biodiversity trends will impact some SMEs more than others. However, there are a range of ways that biodiversity could impact your business:
Direct regulations: such as the Nature Restoration Law or protected species can impact what you’re able to do on a site. These laws can directly increase costs or the potential options for developing land.
Customer requests: for B2B companies with large customers, you may be asked to provide information about your biodiversity impacts as your customers comply with their own regulations (such as the CSDDD) or voluntary reporting (e.g. Task Force for Nature Disclosures “TNFD”). As a supplier to a larger organization, you form part of their value chain.
Opportunities: customers, large and small, are beginning to prioritize suppliers that align with their sustainability ambitions. For example, “bio” or organically grown foods command a 10-20% price premium for end consumers in the EU. When combined with smart marketing, transparency, and customer experience, the price premium can be even higher. Additionally, large companies striving to reduce their value chain impacts prefer suppliers who can demonstrate controlled risks, measure their impact, and are working to reduce it.
What can I do about it?
Biodiversity can be a drain on your business - we can help you turn it around and create value for both your business and the planet. Start by discovering whether biodiversity is the issue your business should focus on with our Quick Sustainability Assessment, and get in touch to develop your strategy for creating value together.
