RSK Group company Nature Positive launches its Biodiversity Report Card analysing the Asian business community’s understanding of nature and the natural resources on which it depends. One year after the company’s review of the FTSE100 index, how is biodiversity being included in financial decision making in the fast-growing economic hub?
Half of the world’s GDP depends on nature
According to research from the World Economic Forum, more than half of the world’s GDP is either moderately or highly dependent on nature. But the results of a new study by Nature Positive and RSK Group reveal a concerning disconnect – companies are not yet on track to outpace the biodiversity crisis that’s already underway.
Nature Positive’s sweeping review of the Asian market includes publicly available data from 192 companies across the Japanese, Thai, Singaporean and Hong Kong stock exchanges. A striking 52 per cent of these companies either don’t publicly list biodiversity among their priorities or seem to use it only as a buzzword, with no evidence of action.
“Biodiversity is a concept that might not be widely understood, and it needs to be further interpreted and contextualised,” said Supakorn Ekachaiphiboon of the Stock Exchange of Thailand. “That is why, a lot of times, [corporations] might not see the link between their business operations and biodiversity impacts.”
These findings are cause for concern, but they also clarify where efforts to protect Asia’s biodiversity must begin. To address our economy’s impacts on nature worldwide, we must start by informing businesses about their own reliance on biodiversity. The race to protect Asia’s imperilled ecosystems has already begun, and companies can’t afford to fall behind.
Every day our global society relies on biodiversity for a raft of ecosystem services that help to keep our planet regulated, our communities healthy and our economies prosperous. At Nature Positive our mission is to work with businesses to address the risks and opportunities that arise from their impacts and dependencies on nature. We can gain a lot of insight by looking at how the largest companies are addressing biodiversity. Following our review of the FTSE100 last year it was interesting to see the similarities and differences between four of the most influential Asian markets.
– Jim White, Nature Positive Principal Consultant
Only 4% of companies highlight biodiversity as a priority
Only four per cent of the companies in Nature Positive’s report currently highlight biodiversity as a priority material issue. This demonstrates a knowledge gap throughout the Asian market – businesses may be aware that waning biodiversity is a generalised problem but not that it is poised to directly impact their operations.
These results show that while climate change may be on every company’s radar, the linked issue of declining biodiversity has so far escaped their notice.
No company has yet completed a biodiversity audit
Of the 192 companies whose information was reviewed, no company showed evidence of having completed a biodiversity audit. Such evidence-based audits can give a business a real understanding of its impacts on nature. By calculating its baseline biodiversity footprint and then following the mitigation hierarchy, leadership can get a clear view of the work ahead. Without a complete audit, even companies that prioritise biodiversity are operating in the dark.
There is some good news: of the 80 companies treating biodiversity as a material issue, 36 are already carrying out conservation or restoration activities. This proportion is encouraging, but any company looking to offset its impact must start by evaluating its contribution to the problem.
13% of companies are implementing biodiversity targets
Of the 80 companies referencing biodiversity as a material issue, only 13 per cent (10 companies) were found to be implementing or planning to implement net-gain or no-net-loss targets. Those who already had set plans into motion tended to be from sectors with more direct impacts on natural environments, such as land use change to support commodity production.
According to Ekachaiphiboon, “Currently, companies that are paying greater attention to biodiversity impacts…have already faced crises related to biodiversity issues or can clearly see the link between their business operations and biodiversity risks and opportunities.”
The cumulative nature of biodiversity measures means that foundational steps must be taken before accurate targets can be set.
“Until we have common industry frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) and science-based targets for nature providing guidance and clarity, I think no-net-loss/net-positive target setting will be limited,” says Sue Mulhall of BirdLife International.
COP15 is a pivotal opportunity to champion biodiversity
Protecting and restoring biodiversity is not only one of our strongest bulwarks against the climate crisis; natural environments are also vital for the stability of the global economy.
Much of the power to improve the trajectory of our ecosystems rests with the financial sector, which can influence market and investment trends. With a concerted effort to apply findings like those in this report, the market can become one of the most critical tools in addressing the intertwined crises of climate change and biodiversity loss.
COP15 comes at a defining moment in the history of our planet. This conference must serve as a long-overdue catalyst for a strategic shift in how governments and the private sector tackle climate change. Biodiversity must rank alongside carbon output in corporations’ environmental priorities, or natural environments in Asia and across the world will pay the price.
Education, collaboration and the adoption of common metrics are needed to make a prosperous future possible. This is our best and last chance to choose longevity for ecosystems, and economies, in Asia and beyond.