In series of occasional “think pieces”, The Helical Group’s Director’s and Senior Managers explore different aspects of business sustainability. Here, Dorothy Harris, Managing Director, explores the opportunties for business arising from treating biodiversity as a business issue.
City sources (London) are keen to point out that they have “done” biodiversity and have moved on to climate change and more general supply chain issues. But, that does not mean that the financial institutions, and more particularly lenders, do not keep an eye on a company’s performance regarding biodiversity. It is now one of many issues that is used as evidence of sound management. Biodiversity has been embedded in the Goldman Sachs Environmental, Social and Governance (ESG) Index, the Dow Jones Sustainability Index as well as the new IFC Performance Standards, which are used by the Equator Principles Banks.
So the short-term driver of analysts questions may have receded but the business case for addressing biodiversity remains indisputable, not only for the extractive sector, but also for the agricultural and food sectors. And in many ways because of its incontrovertible links with climate change should actually be taken more seriously. This is not the place to discuss the veracity or otherwise of the climate change debate – we have all seen the film, read the reports etc. – but to emphasise how companies can link their climate change and biodiversity strategies.
Globally, as climate change advances and other human and natural pressures escalate extinction rates and modify habitats, the significance of our biodiversity resources continues to increase. The management of these issues is complex but one for which all sectors of society are responsible. The private sector is increasingly expected to seek a net positive effect on biodiversity by minimising the negative impacts of its activities and by making appropriate contributions to conservation.
This is a business risk and maybe often be seen as an unnecessary cost, but one that can be turned into opportunity and a demonstrable commitment to sustainable development. In particular, operational biodiversity issues often provide opportunities for setting-up eco-businesses either for a company itself or in conjunction with local communities.
For the extractive sector there are many accepted potential business benefits that flow from sound strategic and operational biodiversity management:
- Improved access to land
- Reduced risks and liabilities
- Shorter and less contentious permitting
- Better relations with regulators
- Preferred developer status
- Improved community relations
- Improved employee relations
- Improved NGO relations
- Enhanced investor confidence
- Influence in public policy formulation
But, as with other aspects of sustainable development, biodiversity management can be approached in a simple, pragmatic and cost-effective way. In particular, it is possible to de-mystify the subject and make it accessible to those working at an operation tasked with putting strategy and policy into practice.
The links with ‘climate change’ management cover a range of opportunities from the complex to the simple, such as carbon offsets and sequestration projects to the use of biomass for alternative energy, or do as we do at the Helical Group and offset every international flight taken on behalf of clients through www.climatecare.com. Indirectly, enhanced watershed management on company-owned land provides biodiversity and ‘climate change’ gains.
All activities come with an associated cost. When carbon is liberated as CO2 in travel through the use of fossil fuels, it is important that this is balanced through some sort of offset- where an equivalent amount of carbon is locked up for the long-term in biomass, usually in the form of trees. The planting of local native tree species in areas of degraded land locks up the CO2 in the form of trees, provides jobs and controlled resources for local people. It also has a biodiversity benefit as local plant and animal species begin to colonise and use the growing woodland cover. These areas then begin to provide wider environmental benefit through soil and water regulation – the ecosystem services.
Many extractive sector activities occur in regions that are recognised and valued locally and globally for their biodiversity resources. These areas may also be in some of the most deprived parts of the world where subsistence living is common and charcoal production and slash and burn agriculture the only means of survival. Here it is incumbent on the extractive industry to reduce its footprint so that the conservation of habitats and species is compromised as little as possible, while enhancing opportunities for community development and maintaining cultural and heritage values. Where circumstances such as these exist there are many opportunities to consider offsets, conservation zones, alternative energy and crop production.
Biodiversity provides a very powerful issue with which companies can engage a wide range of stakeholders from local communities to NGOs and IGOs. In fact many companies with biodiversity strategies and policies have worked with conservation organisations to develop the thinking and management delivery. At the start, the companies knew biodiversity was a business risk for them but lacked the experience and expertise to identify, prioritise and develop the best practice response. They also needed to understand the perspectives of those whose mission is biodiversity conservation. Developing partnerships, relationships and alliances between the private sector and those conservation bodies enabled companies to broaden their perspective, add to their understanding and integrate biodiversity into mainstream business strategy.