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Gregory Borel shares a company post that explores the two key categories of risks, and  business impacts and dependencies on nature.

Biodiversity, defined as the variety of living organisms and ecosystems on Earth, is essential for the long-term sustainability of natural, social, and economic systems around the world. Despite over half of the world’s GDP being moderately or highly dependent on nature and its services, human activities are causing an unprecedented and accelerating decline at a global scale. 

Thanks to the Task Force for Climate-Related Financial Disclosure, corporates have familiarised themselves with two key categories of risk: physical and transition. The risks associated with biodiversity loss can also be understood in a similar way. The loss of biodiversity creates significant physical risks for the private sector due to impacts on ecosystem services such as a stable climate, filtered water, a steady food supply, flood and pest control, and of course the supply of raw materials for industry. Organisations will also face transition risks relating to changes in the economic system to achieve a biodiversity-positive economy, including increased regulation, demand shifts, or brand reputation. 

However, correctly identifying these risks and taking transformative actions to reverse nature loss through corporate biodiversity strategies will help companies to also find nature-related opportunities that will enable long-term business growth and stability. 

So…where do I begin?

The first step towards a strategic transformation approach to biodiversity conservation is to identify your business impacts and dependencies on nature. 

Impacts are defined as the change caused to the baseline state of nature because of actions taken by the organisation to conduct its normal operations. They can be direct impacts if nature’s decline is linked to an organisation’s immediate activity, for instance, pollution emitted from a factory, or indirect impacts if they occur over time or through a chain of cause and effect. A company’s GHG emissions are the simplest example of an indirect impact as the emissions are not directly linked to nature loss but are contributing to the change in the global climate linked to biodiversity degradation.

Key points include:

• Improved efficiency
• Operational cost savings
• Biodiversity-related opportunities

Read the full article, Spotlight on Nature: the next big opportunity for corporates, on Ampersand.Partners.com.