Businesses at Risk of Extinction Without Urgent Biodiversity Action: Report
The IPBES report finds that current conditions in which businesses operate are not always compatible with achieving a just and sustainable future
The businesses are critical central to halting and reversing biodiversity loss, but that many businesses often lack information to address their impacts and dependencies,
Visual Credits: Pixabay
A new report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) found that the growth of the global economy from $1.18 trillion in 1820 to $130.11 trillion in 2022 has been at the cost of immense biodiversity loss, which now poses a critical and pervasive systemic risk to the economy, financial stability, and human well-being.
The report said that the businesses are critical central to halting and reversing biodiversity loss, but that many businesses often lack information to address their impacts and dependencies, as well as the risks and opportunities relating to biodiversity and nature’s contributions to people.
The report, which was prepared over the course of three years by 79 leading experts from 35 countries and all regions of the world, drawn from science and the private sector, in consultation with Indigenous peoples and local communities, and it stated that the current conditions in which businesses operate are not always compatible with achieving a just and sustainable future, and that these conditions also perpetuate systemic risks.
Businesses Face Inadequate Barriers to Reverse Nature’s Decline
According to the report, businesses often face inadequate incentives, barriers that hinder efforts to reverse nature’s decline, an institutional environment with insufficient support, enforcement, and compliance, as well as significant gaps in data and knowledge. This, combined with business models that result in increasing material consumption and an emphasis on reporting quarterly earnings, has contributed to the degradation of nature around the world.
The report also mentioned that fundamental change is possible and necessary to create an enabling environment to align what is profitable for business with what is beneficial for biodiversity and people.
Public and Private Finances Spent on Environmentally Harmful Subsidies
The report stated that the current conditions perpetuate business-as-usual and do not support the transformative change necessary to halt and reverse biodiversity loss. It mentioned that large subsidies that drive losses of biodiversity are directed to business activities with the support of lobbying by businesses and trade associations. In 2023, global public and private finance flows with directly negative impacts on nature were estimated at $7.3 trillion, of which private finance accounted for $4.9 trillion, with public spending on environmentally harmful subsidies of about $2.4 trillion.
In contrast to this, $220 billion in public and private finance flows were directed in 2023 to activities contributing to the conservation and restoration of biodiversity, representing just 3% of the public funds and incentives that encourage harmful business behaviour or prevent behaviour beneficial to biodiversity.
“The loss of biodiversity is among the most serious threats to business”, said Prof. Stephen Polasky (USA), Co-chair of the report. “Yet the twisted reality is that it often seems more profitable to businesses to degrade biodiversity than to protect it. Business as usual may once have seemed profitable in the short term, but impacts across multiple businesses can have cumulative effects, aggregating to global impacts, which can cross ecological tipping points.”
The report highlighted that less than 1% of the publicly reported companies in the world mention biodiversity impact in their reports, and 60% of the Indigenous lands are globally threatened by industrial development.
Businesses Should Act Now to Prevent Biodiversity Loss
The report said that companies can act now by setting ambitious targets and embedding them in corporate strategy, strengthening auditing, monitoring, performance assessments, and innovating in products, processes, and services.
The report also pointed out that businesses cannot, by themselves, deliver the scale of change needed to halt and reverse biodiversity loss. Collaboration, collective, and individual actions are essential to create an enabling environment where businesses contribute to a just and sustainable future.