Biodiversity is the variety of living organisms, species, and habitats present in an ecosystem. Based on sound science, it is clear that the biodiversity of global ecosystems is threatened, and the business community needs to pay attention. Without the availability of ecosystem services such as biomass, water supply, climate regulation, and flood prevention, the productivity of most global supply chains would be impaired. Yet very few businesses have attempted to analyze either their dependence upon ecosystems or the potential costs of losing these services.
The reason is simple – ecosystem services are “externalities” – outside the market and off the books, out of sight and out of mind.
Only in the last few years have leading international finance companies, such as Goldman Sachs and Zurich Re, begun to investigate and quantify the hidden value of ecosystems.
Biodiversity losses are an early warning signal of ecosystem degradation. The Millennium Ecosystem Assessment, a consensus document developed by over 1000 scientists around the world, examined 24 ecosystem services and found that the productivity of only four had been enhanced over the last 50 years, whereas 15 (including capture fisheries, water purification, natural hazard regulation, and regional climate regulation) had been degraded. In addition, millions of people die each year because of their vulnerability to droughts, crop failure, lack of safe drinking water and other ecosystem-related ills.
While one could argue that it is the job of governments to protect natural resources and biodiversity, the stakes are too high for businesses to ignore. The private sector depends on healthy ecosystems for the production of goods and services, and the private sector has the resources and flexibility to develop and implement economically viable solutions at scale.
The US BCSD joins the World Business Council for Sustainable Development (WBCSD) in supporting business leadership and action to reduce and reverse the loss of biodiversity.
The value and sustainable management of ecosystems must become a more integral part of economic planning and decision-making. “Corporations need to recognize that critical ecosystem services like fresh water, food and fiber and natural hazard protection provided by forests and wetlands are an integral part of a company’s assets,” said James Griffiths, managing director of Ecosystems at WBCSD.
“Understanding the risks and opportunities that ecosystems provide for a business will be key to their success in a more carbon- and resource- constrained world and will significantly contribute to future public policy decisions to combat biodiversity loss.”
The US BCSD is continuing to work with its member companies to address these issues and advance the state of the art of measuring ecosystem benefits and incorporating ecosystems values into business decision making processes through project work and with the development of an Advanced Ecosystem Toolkit.