Western CEOs failing to realise biodiversity's good for business

In yet another sign that the future will be led by countries outside of the US and Europe, a new report finds that corporate leaders in Latin America and Africa are far more concerned about biodiversity-friendly business than their counterparts in the EU.

The finding should ring alarm bells for business executives in developed nations, especially as more and more consumers are showing an interest in supporting companies that work to preserve biodiversity … and in pulling their euros and dollars away from those that don’t.

Released this week, the report on “The Economics of Ecosystems and Biodiversity” (TEEB) from the United Nations Environment Programme (UNEP) points to the results of a PricewaterhouseCoopers survey showing just 14 per cent of CEOs in North America and 18 per cent of those in western Europe said they were “extremely” or “somewhat concerned” about how biodiversity loss could threaten their business growth. In contrast, 53 per cent of Latin American CEOs and 45 per cent of African CEOs agreed they were extremely or somewhat concerned.

Those attitudes in North America and Europe could quickly put businesses there out of step with market demands, the report warns.

“We are entering an era where the multi-trillion dollar losses of natural and nature-based resources are starting to shape markets and consumer concerns,” said Achin Steiner, UN undersecretary general and executive director of UNEP, which hosts the TEEB initiative. “How companies respond to these risks, realities and opportunities will increasingly define their profitability; corporate profile in the marketplace and the overall development paradigm of the coming decades on a planet of six billion, going to over nine billion people by 2050.”

If western CEOs aren’t very worried about biodiversity, consumers are. The TEEB report notes that 60 per cent of consumers surveyed in the US and Europe are aware of biodiversity loss. The figure is even higher in Brazil: more than 90 per cent.

Over 80 per cent of consumers surveyed said they would stop supporting businesses that disregarded ethical considerations in their resource practices.

The UNEP report comes out just TruCost, as a UK-based consultancy, is about to publish a study of the environmental impact of the world’s top 3,000 listed companies. That study concludes those companies are having a negative impact on biodiversity and other “environmental externalities” to the tune of around $2.2 trillion a year.

While many of the companies examined in the TruCost report are operating far from “ecological neutrality,” the TEEB report makes a point of highlighting other corporations that have moved in the opposite direction to embrace the concept of “net positive impact” on biodiversity. The global mining giant Rio Tinto, for example, has worked with conservation experts to find ways to assess the biodiversity values of the land it holds. Based on those valuations, it has started applying biodiversity compensation or “offset” methodologies in places like Madagascar, Australia and North America.

Other companies with similar strategies include Walmart, with its “Acres for America” initiative; Coca Cola, which has a goal of becoming water neutral by 2020; and BC Hydro, which is aiming for no net incremental ecological impact.

“Better accounting of business impacts on biodiversity — both positive and negative — is essential to spur change in business investment and operations,” said Joshua Bishop, the TEEB for Business report coordinator and chief economist of the International Union for Conservation of Nature. “Smart business leaders realise that integrating biodiversity and ecosystem services in their value chains can generate substantial cost savings and new revenues, as well as improved business reputation and license to operate.”