Biodiversity: The Next Big Challenge and Opportunity for Policymakers and Corporates

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The World Economic Forum (WEF), in its Global Risks Report 2021, cited biodiversity loss as one of top global risks society faces, along with infectious diseases, climate action failure and other environmental issues. According to the report, biodiversity loss means irreversible consequences for the environment, humankind, and economic activity, and a permanent destruction of natural capital, as a result of species extinction and/or reduction.

Some of the main threats to biodiversity include:

• Human activities and loss of habitat - Tropical forests are under threat largely from conversion to other land-uses, while coral reefs are experiencing increasing levels of over exploitation and pollution.
• Deforestation - Forest ecosystems are being cleared and degraded in many parts of the world.
• Desertification - Desertification process is the result of poor land management which can be aggravated by climatic variations.
• Marine Environment - Coastal and marine environments are being rapidly degraded in many parts of the globe.
• Increasing Wildlife Trade - Global trade in wildlife is estimated to be over $20 billion annually.
• Climate Change.

In September 2020 more than 560 companies with combined revenues of $4 trillion urged governments to adopt policies to reverse nature loss in this decade.

Earlier this year, BCG advised that biodiversity loss has massive business implications. In its Biodiversity Crisis Is a Business Crisis Study, the firm wrote that biodiversity creates significant economic value in the form of such ecosystem services as food provisioning, carbon storage, and water and air filtration, which are worth more than $150 trillion annually — about twice the world’s GDP.

Some governments and corporations are taking action. The UK, for instance, has set a legally binding 2030 target to address wildlife loss, aiming to protect 30% of UK’s land. It plans to ban sales of peat compost to gardeners in England by 2024 and provide funding to restore 35,000 hectares (86,000 acres) of degraded peatlands in the next four years, about 1% of the UK's total.

Healthy peatlands play an important role in storing carbon — three times as much as forests. However, peatlands damaged by draining, planting with trees, or farming, start to leak carbon, contributing to greenhouse gas emissions.

Only a fifth of the UK's 2.6 million hectares (6.4 million acres) of peat are in good condition. Estimates suggest the habitat — which ranges from upland moors to rich agricultural lowlands — could give off as much as 23 million metric tons of carbon emissions a year.

Schneider Electric, a leader in digital transformation of energy management and automation, recently announced a pledge to fight global biodiversity loss. In its Biodiversity Pledge, the company has committed to:

• Quantifying and regularly publishing its impact on biodiversity. Schneider Electric published the world's first end-to-end biodiversity footprint;
• Achieving net-zero biodiversity loss in its direct operations by 2030, and aligning biodiversity objectives with science; 
• Developing solutions and technologies that contribute to the preservation of biodiversity, by optimizing the use of resources over their entire lifecycle;
• Partnering with suppliers to eliminate the use of single-use plastics from packaging, use recycled cardboard, and help them to sharply reduce their CO2 emissions;
• Partnering with NGOs and investment funds, and engaging employees and partners on local initiatives -- such as ensuring that all of its sites deploy biodiversity conservation and restoration programs, and that sites located in water-stressed areas put in place water conservation plans.