Image source: Arnie Chou
COP15, the UN’s latest biodiversity conference, wrapped up in Montréal, Canada, on December 19. Its primary goal was to create a biodiversity conservation agreement similar to the landmark 2015 Paris Climate Agreement where, for the first time in history, almost all countries supported a common strategy to reduce climate change-causing emissions.
Delegates from over 190 countries, including China and India, have agreed to a Global Biodiversity Framework (GBF). However, despite having representation at COP15, the US did not sign the GBF as they have not yet ratified the original UN Convention on Biological Diversity signed in 1992. The newly-agreed-to GBF has a series of goals and targets such as:
- Protecting 30% of Earth’s land and waters by 2030
- Financing biodiversity protection in developing countries to the tune of US$30 billion per year
- Commitments to restoring already damaged ecosystems
- Cutting food waste in half globally
- Reducing invasive species introductions by 50%
With nearly 1,000 of the observers at COP15 representing businesses and corporations, it is clear that business engagement with biodiversity issues has gone up substantially. The private sector has started to realise that biodiversity loss is a growing material risk, and your company should do the same. Here are five key biodiversity takeaways for your company to address in 2023 and beyond.
- The agreement states that government subsidies that exacerbate biodiversity loss, such as subsidies for agriculture, commercial fishing, or oil and gas, should be reduced by US$500 billion globally per year by the end of the decade.
- The framework will introduce laws and regulations requiring banks and large companies to disclose the biodiversity loss that their operations cause, as well as what steps they are taking to address the issue by 2030. Even if your company does not fall into this category just yet, expect new regulations to come down the pipeline in the future and begin monitoring biodiversity loss.
- Signatories to the GBF have agreed to protect one-third of the world’s land and bodies of water, particularly in biodiversity hotspots near the equator. This will have wide-ranging impacts on companies whose operations and supply chains rely on resources extracted from these areas.
- Board members need to fill the knowledge gap on the biodiversity impacts their companies have. According to the 2022 CDP A List, only 25 companies received an A grade on deforestation disclosures, while over 280 companies received an A in climate disclosures. Additionally, the World Benchmarking Alliance found that only 5% of the world’s 400 most influential companies have completed science-based assessments on the impact their operations have on biodiversity loss, as opposed to 50% assessing their climate impacts. More work needs to be done to bring biodiversity to the forefront of company planning.
- Target 21 of the GBF focuses on the participation of Indigenous people and local community (IPLC) in decision-making. Sectors whose operations are centred around lands and waters that are under IPLC stewardship, such as utility companies, oil and gas, agriculture, fisheries, and forestry, must involve Indigenous leaders and local communities to ensure that companies are not operating exploitatively. Indigenous and local communities are not only the most vulnerable to biodiversity loss, they will also have unique knowledge and perspectives on the ways to best preserve local biodiversity.
If biodiversity risk is not yet near the top of your board’s agenda, it is time to take action. Biodiversity loss presents a huge problem to companies that rely on nature and ecosystem services in their operations, but is often overshadowed by climate change.
Addressing biodiversity loss is a complex issue. However, our best in class ESG and Climate Designation Programs are here to help you. Both programs look at biodiversity risks, how board directors and business leaders can mitigate those and also become proactive in biodiversity conservation.
For a more detailed breakdown of how each of the GBF targets will impact businesses, refer to the white paper published by the World Economic Forum.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.Back To News & Views