Biodiversity: How to beat the growing pains

The Convention on Biodiversity and the Kyoto Protocol set off at roughly the same time; one to cut the rate at which the world's ecosystems were disappearing, the other to cut greenhouse gas emissions. But while carbon has become an accepted, mainstream boardroom issue, the idea of incorporating everything from bees to soil microbes into a company's sustainability strategy remains, for many, far-removed.

It's not difficult to see why. Carbon is (relatively) easy to measure Unilever managed to calculate the carbon footprint of 1,600 of its products recently. It also has a value, which means cutting carbon in turn reduces costs. As the Association of Chartered Certified Accountants' (ACCA's) head of sustainability, Rachel Jackson, points out: "The easiest way to get the chief executive's attention is to talk about profits and risk. You need figures."

Lord Stern provided them five years ago in his review of the economics of climate change; he put a price on not dealing with climate change, forcing policy-makers to act. We now have a number of policy drivers, plus a board-level understanding with regard to cutting emissions.

Environmentalists suggest progress remains too slow, but compared with biodiversity it's been electric. Unilever admits that it's one of the most difficult areas it has to contend with. "The general levels of understanding, and I include myself in that, are not as good as they should be," admits Gavin Neath, the company's senior vice president for sustainability and communications.

Polar bears and penguins​

Have they, in fact, improved at all? David Symons, director at environmental consultancy, WSP, feels biodiversity issues are still viewed as a little bit "polar bears and penguins". "Five years ago it was very much a 'nice to have', but a long way from core business strategies. It's coming up on the rails, but it's a long way from where we are with carbon or water."

Confusion is part of the problem: all disciplines come with their own suite of jargon and biodiversity is no exception. But there is more to it than language. Mark Line, executive chairman at sustainability consultancy, Two Tomorrows, says it's a problem of basic understanding. "Environmental management systems [like ISO14001], often leave biodiversity at the fringes and this is rarely challenged by certifiers. Any land-intensive business, particularly those closely related to agriculture, can't afford that to happen."

Much of the business case for assessing biodiversity impacts lies in understanding the risks. Two Tomorrows recently piloted a screening tool to help a global food client evaluate the relative biodiversity risk associated with operations. "The tool successfully differentiates site-based risks, but we learned that sites know relatively little about supply chain biodiversity impacts and most procurement decisions are made centrally," says Line. "Corporate supply chain processes don't seem to have taken biodiversity into account to a great degree yet. However, many companies are looking at the issue strategically from a supply security point of view."

Threats and opportunities​

According to Paul Laird, corporate partnerships manager at the Earthwatch Institute, the bigger companies are already aware of the threats and opportunities they face. "Companies like Cadbury and Starbucks are essentially reliant on one crop, grown in certain areas of the world where biodiversity and ecosystems are under threat. With land at a premium, along with the investment they have made in those areas and farming communities, they're increasingly aware that they need to play the long game and ensure a sustainable supply beyond the next year or so in those areas."

Earthwatch has been working with British American Tobacco on a biodiversity risk assessment tool to investigate how a particular crop impacts and depends on a range of ecosystems. Laird says the tool "available next year" could be developed for other crops and thus prove "very useful" for companies reliant on limited portfolios of raw materials.

There are other systems in place for some of the most damaging crops, too: for palm oil there is certified sustainable palm oil already available, while soy should follow suit next year with 'responsible soy'. Identifying the biodiversity impacts and risks if you are sourcing a single crop is one thing. But what about those sourcing dozens, hundreds or even thousands of products, from different parts of the world and through a variety of intermediaries?

Take Unilever, which buys 7.5Mt of raw materials annually. Neath says there's no chance of neglecting biodiversity, but managing it is tricky. "When we look at large plantations, like our tea in Tanzania then we tend to do really well, but that's the exception rather than the rule. Many of the solutions are very localised."

Neath rules out a change in business model and a return to wider ownership of plantations "we took the strategic decision 20 years ago that it wasn't for us". However, he admits that the target to source all of its agricultural raw materials from sustainable sources by 2020 will "require us to get closer to the farmers".

Others are treading the same path. PepsiCo is attempting to bring agriculture closer to the heart of its business, but once again the focus is largely on water and carbon with the availability of footprinting tools making it easier to benchmark progress and save money. Research by PwC this month showed that measuring emissions costs less than £50,000 for 65% of the large companies surveyed. While 14% were saving £200,000 a year on the back of it, 60% found there to be a net cost of reporting. There might not have been a direct financial benefit, but when wider benefits such as reputation and consumer awareness were added to the mix, more than half said there was a net benefit.

Unilever has managed to assess the greenhouse gas footprint of 1,600 of its products in a bid to cut its overall footprint and inform consumer choice. Could it do the same for biodiversity? Unlikely. "Currently it's not generally possible to measure the total biodiversity footprint of a business," explains Dr David Vackar, a footprinting expert at Charles University in Prague.

There are many ways in which biodiversity can be measured, and scientists have developed myriad techniques appropriate in a variety of circumstances. As yet, though, there is no single agreed approach for businesses to assess their impact.

There are global indicators, of course: WWF calculated that the world's resources are being 'consumed' at 1.5 times the rate at which nature can replace them. However, while it's possible to divide such limits into national targets using population size, for instance, it's impossible to calculate what an individual business's share should be. So, if businesses can't measure biodiversity, what can they do about it?

Sustainable intensification​

For Jan Kees Vis, Unilever global director of sustainable sourcing development, the answer lies not in calculations of biocapacity "that's just a goldmine for consultants" but in minimising the hectares required to grow raw materials. "Sustainable intensification is the name of the game," says Vis. "There is an immense yield potential to add to world production in some areas, but governments need to invest in agriculture so we can get technology and knowledge to the 1.5bn farmers."

The role of government ​

Compared with carbon, the contributions of businesses for the protection and sustainable use of biodiversity, especially by developing modern technologies to increase yields in agriculture reducing pressure on forests, have not yet been fully recognised by governments. The UK government may receive a nudge in this direction from its chief scientific adviser next year.

Heightened political interest could speed the issue's rise up the corporate agenda as happened with climate change. if policy makers get a value to deal with (as happened with carbon). While it might be difficult to pin a price on a polar bear, figures are emerging that lay values to some natural services such as insect pollination (£120bn globally). A UN-backed study on the economics of ecosystems and biodiversity (Teeb) is at the heart of it; environmentalists are hoping the study can "do for biodiversity what Stern did for climate change".

However, many in the food industry believe that the private sector needs to press ahead while the public sector pontificates. The Food & Drink Federation has already moved to include biodiversity in its Environmental Ambition plan, even though there isn't yet a monetary value. Dr Juan Gonzalez-Valero, Syngenta head of public policy and partnerships, says a lack of defined price shouldn't mean a lack of progress in managing biodiversity.

"While you may never be in the position to 'cost' biodiversity, you can find situations where biodiversity directly adds to productivity, quality, or other attributes that can be translated into a financial benefit. Losing or not having that supporting biodiversity is therefore a net cost."

While no UK food manufacturer is reliant on polar bears, the majority of them will rely on other species: some 87 out of the 115 leading global food crops are reliant on animal pollination. The business case for food companies assessing their environmental impacts is therefore heightened, as sustainability expert Anthony Kleanthous explains: "Though carbon and water might be easier to manage and measure, biodiversity has to be part of the environmental equation for food businesses.

"Food, perhaps more than anything else we produce, relies on healthy ecosystems, so in protecting biodiversity you protect your business."