What is biodiversity?
The Convention on Biological Diversity (CBD) defines biodiversity as the “variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part: this includes diversity within species, between species and of ecosystems”. The multi-dimensional nature of biodiversity presents a challenge in quantifying it, and therefore in quantifying the contribution that any activity makes to losses or gains in biodiversity.
Why is biodiversity important?
Biodiversity supports all life on earth through the provision of ecosystem services such as water purification, air purification, pollination of crops, and climate regulation. Biodiversity also underpins all economic activity, providing the raw materials that every product or service ultimately relies on, and the food, fuel and medicines which keep humans healthy and the economy functioning. Recent studies estimating the value of economic activity which directly relies on nature found that more than half of global GDP is potentially threatened by nature loss and that 49.3% of Australia’s GDP is dependent on nature.
What is driving biodiversity loss?
Although humans are dependent on biodiversity, it is human activity which is the main driver of biodiversity loss. Key direct drivers of this loss are illustrated in the following figure, taken from the IPBES Global Assessment Report, and include land and sea use change, direct exploitation of species, climate change, pollution, and invasive species.
These direct drivers of biodiversity loss are often the result of pressures exerted by other forms of human activity. For example, an increase in demand for agricultural products creates land use pressures, often resulting in land clearing and habitat loss for any species in that location. Similarly, increased demand for manufactured products drives an increase in raw material extraction and industrial activity, with associated land degradation and water and air pollution.
How might my organisation be contributing to biodiversity loss?
All organisations indirectly contribute to biodiversity loss through the supply chains that support their purchase of goods and services. Ultimately, every product has been derived from the natural world and converted to its finished state through many production stages, and each of these stages has an impact on biodiversity. Some organisations will also have a direct impact on biodiversity, driven by their day-to-day operations. Organisations which rely on agricultural commodities, extract raw materials from nature, or have a large land area footprint are likely to have a material impact on diversity through their own operations.
Are there any frameworks I can use to assess my organisation’s impact on biodiversity loss?
The Taskforce on Nature-related Financial Disclosure is developing a risk management and disclosure framework which can be used by organisations to report and act on nature-related risks and opportunities such as biodiversity loss. This framework is expected to be finalised by September 2023 and incorporates four categories – Governance, Strategy, Risk Management, and Metrics & Targets. The TNFD recommendations include general requirements that any “disclosures should be based on
- assessment of nature-related dependencies and nature impacts;
- consideration of location;
- consideration of capabilities for nature-related risk and opportunity assessment and management; and
- a statement of the scope of disclosures and what will be covered in future disclosures” (TNFD Framework Beta, p.10)
This framework also includes a process for use by corporates or financial institutions to assess their impact on nature, the LEAP approach, which incorporates four phases for analysis and is illustrated in the following figure. The first phase of this analytical process is to locate an organisation’s interface with nature including its direct assets and operations, and its related value chain activities, both upstream and downstream.
How do I work out my direct impact on biodiversity?
Key questions that can help an organisation assess their direct impact on biodiversity include:
- What is the specific location of each of our operational sites?
- What is the land area covered by each of our operational sites?
- What raw materials are our operations dependent on?
- What locations are these raw materials sourced from?
- Are there any Key Biodiversity Areas located near our operations or raw material source locations?
- Are there any threatened species found at the locations of our operations or raw material source locations?
- What water sources supply our operations or raw material source locations?
- How are waste material and wastewater treated at our operational locations or raw material source locations?
How do I work out my indirect impact on biodiversity?
Understanding an organisation’s supply chains is the key to working out its indirect impact on biodiversity. The impacts of some of these supply chains may be relatively easy to quantify, particularly when connected to well-tracked commodities such as soy, coffee, and cocoa. However, as significant as these commodity supply chains are, they are usually not the only supply chains which support an organisation’s operations. Fair Supply’s proprietary supply chain assessment methodology covers more than 1.8 billion monetary transaction nodes globally, allowing unprecedented visibility of the global supply chains which support your operations. We’ve connected this supply chain data to information on species extinction risk, curated in the IUCN Red List of Threatened Species, to calculate an extinction-risk footprint. You can read more about our extinction-risk footprint methodology here. All it takes to generate an extinction-risk footprint and identify the countries and industry sectors impacted by your supply chains is information on your organisation’s expenditure patterns – our Integrated Assessment Engine does the rest. Ready to calculate your indirect impact on biodiversity?