European Business & Biodiversity Forum shows the need for alliance
The growing urgency of climate change and biodiversity loss necessitates rapid increase in mutual understanding between business and biodiversity.
The European Business and Biodiversity Forum, involving some 500 enterprises on 21stJune in Paris, sought to address this issue.
Wild Europe’s presentation to the Forum stressed the important role of companies in conservation, particularly restoration, and outlined measures needed to enhance this.
The European Business and Biodiversity Forum
Hosted by WWF’s European offices, the Forum examined all key aspects of business engagement.
The CBD’s Global Biodiversity Framework from COP15 in Montreal provided a backdrop, examining a range of recent initiatives to facilitate corporate funding. These included:
- The Science Based Targets Network (SBTN), aiming to establish environmentally positive impact objectives in cooperation with conservation NGOs
- The Corporate Sustainability Reporting Directive (CSRD), to highlight the impacts of corporations on sustainability for investors and other third parties
- The Taskforce on Nature-related Financial Disclosures (TNFD), a corporate-designed entity to initiate transparency for assessment of performance to inform management of environmental aspects
- The Biodiversity Risk Framework (BRF), for enterprises to take account of the biodiversity impact of their operations – linked to SBTN above
All these initiatives are recently developed, and a range of companies including Carrefour, Tesco, Christian Dior, Rabobank, Triodos and OFI Asset Invest shared experiences from pioneering their implementation.
The importance of engagement by the corporate sector starts with reduction of its own impacts on climate change and biodiversity loss.
Alongside that, provision of sufficient funding to tackle these challenges is an essential game-changer in bridging the massive gap between availability from official sources – and here the EU has raised its game to 20 bn Euro per year (10% of budget by 2025) – and the amounts required to achieve the basic goals of the Paris agreement and 2021 Biodiversity Strategy.
Such funding can come from donations (CSR agenda), offsetting (with emission reduction), carbon & biodiversity credits, direct benefit contributions, sales incentivisation, equity purchase in land conservation and PES activation entities.
Yet beyond this, the sector needs to develop a joint approach with conservation interests, with coordination in development of strategy and representation of the policies required to achieve it – and capacity needed for both these tasks.
Benefits of participation for corporates
Ultimately corporates are answerable under law to their shareholders, and more extensive cultural reform must be tempered, in the short run at least, by pragmatic considerations of enlightened self-interest.
Profit and planet can be aligned, given a strictly abided framework, and material rewards for corporate involvement include:
- PR & CSR (Corporate Social Responsibility)
- linkage to sales potential
- income from ecosystem services
Behind all these elements, however, and a key element of greater awareness needed by corporate management, are the massively rising costs from failure to take effective action on climate change or biodiversity loss – likely in economic terms alone to reach 10% of GDP by the end of this century
Challenges to effectiveness of corporate engagement
These challenges are mainly fourfold:
1. Effectiveness will be limited if it is not based on assent by land user interests and their well-placed representatives in the EU Parliament and Council of Ministers. Opposition to the Nature Restoration Law may in operational terms derive from electoral considerations by the centre-right European Peoples Party (EPP). Yet no political party operates independently of its support base, and fears among landholder interests about legally binding compliance are chiefly that it will not be accompanied by sufficient financial compensation and reward. These fears need facing head on, with clear explanation of sources, uses and amounts of funding available to match obligations. This aspect has not yet been adequately grasped in conservation circles.
2. The instruments to convey and monitor corporate funding – outlined above – must be developed with sufficient environmental knowledge to produce appropriate definitions, targets, criteria and outcomes in the field. Otherwise the outcome will be misallocation of resources, missed objectives and further problems with greenwashing.
3. Capacity gaps in the conservation sectors must be urgently and systematically addressed – upgrading expertise particularly in enterprise, finance and economics. This can enable:
- joint development and monitoring with the corporate sector of the above instruments
- availability of well-structured projects for funding
- representations on policy and budgetary issues sufficiently empowered by economic, financial and enterprise considerations
4. Similarly, the corporate sector needs to upgrade its knowledge of environmental principles if it is to distinguish those allocations of funding that offer most effective support for addressing climate change and biodiversity loss. Conversely it must also learn to identify those investments that may appear green and attractive, but are less desirable in practice – commercial wood bioenergy is a classic case here. At the very least, it should know where to seek reliable advice.
The corporate sector must play its essential role, but there is a paramount need to avoid misallocation of resource and greenwashing – whether inadvertent or otherwise.
The way ahead
The financial instruments and verification mechanisms being developed are all at the pilot stage. So, for successful full adoption, four key drivers ae needed:
- Joint conservationist-corporate cooperation for developing, implementing and monitoring all instruments
- Capacity building: conservation & corporate, as outlined above
- A network of intermediaries fully developed between funders and land users: credit brokers, conservation land managers, utilising the Payment for Ecosystem Services (PES) agenda
- Recognition of common ground, with forging of a working alliance to secure required funding & policies based on common ground – eg between conservation, corporate, consumer interests
The need to re-balance lobbying power
Ultimately, in the land use sector, most of the opposition to measures that can address climate change and biodiversity loss comes from farming, forestry and commercial bioenergy interests and their allies in the European Parliament, Council of Ministers and national governments.
Yet, however effective their massive lobbying budgets may be, at the end of the day these interests represent under 2.5% of GDP in the EU – as against the 97.5% of the economy that must bear the extra cost from aggravated climate change and biodiversity loss resulting from inappropriate management practices and failure to embrace a conservation agenda.