Biodiversity and the Real Responsibilities of Business
- Naoki Adachi
- CEO, Response Ability, Inc.
Biodiversity conservation is no longer just a part of corporate social responsibility but it has become an essential factor for business sustainability. According to a survey conducted prior to the Davos Forum in 2010, when the 10th meeting of the Conference of the Parties to the Convention on Biological Diversity (CBD/COP10) was held in Japan, 27% of world business leaders responded that the risk of biodiversity loss was that of business loss. Three and a half years have passed since 2010, and this figure is doubtless now higher.
In Japan, on the other hand, the term “biodiversity” became fairly popular after COP10. Also, biodiversity is recognized by companies as an important issue to work on, and some companies have made steady progresses. However, most companies have not yet recognized biodiversity as a substantial issue. They conduct conservation activities only as a social contribution while they should be conducting intrinsic activities relevant to their business.
This situation is very disappointing and I am afraid that Japanese companies might not go the right way and fail to survive. If biodiversity is lost further, it becomes more difficult for companies to exist. This is exactly why leading companies have already dealt with the biodiversity issues as business risks. Therefore, I would like to state in this article about the relationship between biodiversity loss and business risk that has not yet been fully understood by Japanese companies.
Thinking about the Relationship between Business and Biodiversity
The readers of this column should already know about the loss of biodiversity taking place at a blistering pace. Of course, this situation cannot be ethically overlooked, and most readers would hope to save plants and animals in danger of extinction, or to decrease the number of endangered living organisms. And also, more than 99% of the causes of biodiversity loss are due to human activities, and especially, they are largely attributable to business activities. Therefore, you would think that companies are responsible for conserving the biodiversity. This idea is quite right, but the relationship between business and biodiversity is not limited to this. Actually, this description is only facile.
First of all, business activities can have great impacts on biodiversity and also can damage it; however, such activities are not intentional. Companies carelessly deal with biodiversity as they do not understand its true value, and eventually, they damage biodiversity. In other words, if they can understand its true value, they can esteem biodiversity more highly and minimize adverse effects. In some cases, they can also make positive impacts on biodiversity.
As the second relationship between business and biodiversity, I would like to mention that companies have impacts on biodiversity through their business activities, and all business activities are conducted in order to support our human life and make it more comfortable and convinient. So, it is companies who make direct impacts, but we can claim that the real reasons for biodiversity loss are based on our insatiable desires. If we can become aware of this and request companies to undertake appropriate consideration, the relationship between business and biodiversity will change greatly.
The most important thing is to recognize that both every single human and business activity largely depends on biodiversity, and neither human society nor companies are sustainable without rich biodiversity. Accordingly, biodiversity is also called the “natural capital” that supports human society and companies. Once companies notice this fact, they cannot carelessly deal with biodiversity anymore. They have to give consideration to biodiversity in their business activities in order to sustain their businesses and win the confidence of their clients.
Biodiversity supporting Sustainable Business
Many companies still do not fully understand the third relationship whereby biodiversity supports business. Therefore, they might not earnestly cope with the biodiversity issue.
Dependence on biodiversity by manufacturers such as in the food, construction, furniture, pulp and paper and apparel industries and their distributors is obvious and easiest to understand. These industries depend on biodiversity itself and they would not be able to continue their business without various biological resources provided by biodiversity.
Also, almost all the manufacturers and service sectors cannot conduct their business without clean air or clear water. It is the ecosystem that purifies and circulates air and water. After all, these industries also depend on biodiversity.
Leisure industries including the tourism depend on the very existence of biodiversity. We wish to travel to far-off destinations as there are beautiful natural environments, rich in biodiversity.
There are also a few different roles of biodiversity and the ecosystem. It is the ecosystem that preserves factories, shops, or office buildings (as well as our houses!) from floods, landslides or tsunami. In the sense that economic damages caused by natural disasters can be minimized, biodiversity is necessary for the financial industry to conduct sound business.
As such, each and every business depends on biodiversity, and there’s no continuable business without biodiversity. If companies recognize this relationship, it is natural for them to “invest” their resources for the conservation of biodiversity in order to develop the sustainability of their businesses. “Natural resources” should not be eaten up but rather should be strengthened for business sustainability.
Impacts of Business Activities
On the other hand, biodiversity has been damaged by irresponsible business activities even though their existence may be based on biodiversity. In other words, companies that fling dirt at biodiversity, dirty themselves the most. Industries like mining, agriculture, stock farming, land development, road and railway that change land use on a large-scale should especially pay attention to biodiversity. Even if companies are not directly involved in such business activities, they cannot feel secure. If their supply chains include above mentioned businesses, their business activities eventually will impact on their business sustainability although indirectly. In fact, considering the supply chain, they would recognize that all business have impacts on biodiversity. Therefore, leading companies are engaged to minimize impacts on biodiversity throughout supply and value chains as well as their own operations.
All such activities, however, are not voluntarily conducted by companies. In many countries including Europe, compensation or “biodiversity offset” which substantially eliminate the impacts is mandated when the development is conducted in a valuable and precious ecosystem, and such a movement is expanding to developing countries as well. In case where there are no such laws and regulations, business activities cannot be conducted without consensus by local societies, so-called “social license to operate,” and this aspect is becoming common around the world.
If companies understand the relationship between business and biodiversity and the expectations from the society, they would also understand that they would neither be able to respond to expectations from society nor manage their business risks only by undertaking small-scale environmental activities, for example, tree planting. Of course, it is not a bad idea to support the conservation of an endangered species or a local ecosystem. However, such social contributions without considering the business impacts on the ecosystems could be regarded as green wash, and this would be irrefutable if their activities are accused of being superficial environmental activities. If companies make efforts to reduce environmental impacts in addition to tree planting, and continuously conduct thoroughgoing tree planting for considerable areas in the world as well as in Japan, they would be highly evaluated as “companies that correctly understand biodiversity” not only by citizens but also by specialists.
The real responsibilities that businesses have to fulfill for biodiversity are to utilize precious natural resources frugally and efficiently and to recover and strengthen them at the same time. Biological resources and diverse ecosystem services provided by living organisms are sustainable as far as we sustain biodiversity. Therefore, what is required for companies is to minimize the impacts from business, take full advantage of the characteristics of renewable biological resources, and appropriately manage and utilize biodiversity which provides diverse ecosystem services. Therefore, only companies which can carry out such activities can be sustainable and survive in the long run.
Profile of Naoki Adachi
Dr. Naoki Adachi studied ecology at the undergraduate and graduate schools of the University of Tokyo, and obtained a doctoral degree in science. He was engaged in research on tropical forests at the National Institute for Environmental Studies (NIES) from 1995 to 2002, while worked for Forest Research Institute Malaysia (FRIM) from 1999 to 2002. After he came back to Japan from Mlaysia, he resiged from the institute and started his career as an independent consultant. Now he serves as CEO of Response Ability, Inc. and Executive Director of Japan Business Initiative for Biodiversity (JBIB). He provides consultancy services to leading Japanese companies mainly focused on corporate sustainability and its role in the society. He specializes in “biodiversity conservation by companies” and “CSR procurement (supply chain management)” as well as CSR in Asia. He holds several positions such as standing committee member of the Ecological Society of Japan; advisor of the Sustainable Management Forum, Japan; executive board member and Executive Director of Natural Step Japan; member of the advisory group of the Business and Biodiversity Offsets Programme (BBOP); member of the Committee for Promoting Conservation and Other Efforts Regarding Biodiversity in Economic Society, Ministry of the Environment; member of the Committee Concerning Domestic Measures Regarding the Nagoya Protocol, Ministry of the Environment; member of the Committee on Biodiversity Private Sector Activities Guidelines; and member of the Research Committee for the Promotion of Biodiversity Conservation in the Fields of Agriculture, Forestry and Fisheries, Ministry of Agriculture, Forestry and Fisheries.