Published on October 12th, 2018 | by Carolyn Fortuna0
How Much Do Fortune 100 Companies Factor In Biodiversity Accountability?
October 12th, 2018 by Carolyn Fortuna
Is biodiversity protection really a major goal of nearly 1/3 of the world’s biggest companies? That’s what they’d like their shareholders to believe. But is merely mentioning biodiversity accountability in a company’s annual reports enough? A recent study indicates that only 5 Fortune 500 Global companies made biodiversity commitments that can be considered specific, measurable, and time-bound.
So it’s hard to figure why a press release promoting the big corporate efforts toward biodiversity accountability put a much more positive, activist spin than the data indicate. Sure, companies want to be perceived as going green and clean, but the environmental impacts of business need more science‐based biodiversity commitments, meaningful indicators, and targeted activities to be part of systemic environmental change.
As a CleanTechnica (CT) writer, I get a lot of press releases in my in-box. Our staff of 40 recognizes that our climate messaging is a contribution to the larger picture of keeping the planet at the 2 degree mark as outlined in the Paris Agreement. Our CT efforts, in small part, attempt to influence the national discourse and to bring divergent groups together toward collaborative climate change action.
When I saw a press release referencing the Addison, Bull, and Milner‐Gulland research out of Oxford University, titled “Using conservation science to advance corporate biodiversity accountability,” I was intrigued. The embargoed announcement said that the report contained “clear biodiversity commitments” on the part of Fortune 500 companies. The press release commented that some of the world’s biggest private sector companies were pledging “to address their environmental impacts and factoring biodiversity into their sustainability reports.”
That seemed like good news, and I read on.
The press release made several summary points about the Addison et al. report.
- The data that emerged and which supported biodiversity accountability was “perhaps (a) surprising observation.”
- The findings, which were published in the Conservation Biology journal, sit as a “direct contrast to UN experts’ previous description of big business as ‘soulless corporations and a cancer on society’.”
- Environmental awareness has become “a hot-topic social issue,” with advocacy ranging from “banning single-use plastic through to slowing the rate of global deforestation.”
- Private sector corporate actions reflect the public’s growing concerns “around corporate responsibility for environmental issues, like plastics, marine pollution, and deforestation.”
The American Museum of Natural History defines “biodiversity” as follows:
“The term biodiversity (from ‘biological diversity’) refers to the variety of life on Earth at all its levels, from genes to ecosystems, and can encompass the evolutionary, ecological, and cultural processes that sustain life. Biodiversity includes not only species we consider rare, threatened, or endangered but also every living thing – from humans to organisms we know little about, such as microbes, fungi, and invertebrates.”
Ecosystems provide crucial services such as pollination, seed dispersal, climate regulation, water purification, nutrient cycling, and control of agricultural pests. Since the Industrial Revolution, human (“anthropocene”) domination of the planet has caused rapid ecosystem change and massive loss of biodiversity. Instead of the gradual changes the Earth has always experienced, today’s changes are occurring at such a rapid rate that they are causing major direct threats to biodiversity. These include habitat loss and fragmentation, unsustainable resource use, invasive species, pollution, and global climate change. The underlying causes of biodiversity loss, such as a growing human population and overconsumption, are complex.
E.J. Milner-Gulland, who leads the Interdisciplinary Centre for Conservation Science in Oxford’s Department of Zoology, explained the team’s rationale for conducting the study into Fortune 500 companies and their biodiversity accountability.
“It is important for us as conservation scientists to understand to what degree larger corporations depend on biodiversity, so that we can begin to work more closely with the private sector to help them develop fit-for-purpose and science-based approaches to better integrate biodiversity considerations into future business decisions.”
The data that resulted from the report is intended to allow scientists to work with businesses to shape their biodiversity goals, help them be more effective in managing their impacts, and, ultimately, protect the environment. The researchers hope to build on their findings by building relationships with big businesses, who, in turn, can develop clear biodiversity aspirations and take action to address and drive goals towards positive environmental change.
Biodiversity Accountability: Primary vs. Secondary Sources
The Oxford research team, in collaboration with the Durrell Institute of Conservation and Ecology (DICE) at the University of Kent, was not nearly as quick to reward the top 100 of the 2016 Fortune 500 Global companies (the Fortune 100) and their sustainability reports as were the press agents. The research provided several distinct conclusions.
Here’s what I learned.
- Of the top Fortune 100 companies, 86 have publicly available sustainability reports.
- Companies from higher biodiversity risk sectors did not make greater mention of biodiversity compared with lower risk sectors (companies mentioning biodiversity: high risk, 71%; medium risk, 53%; low risk, 70%).
- Almost half (49) of the Fortune 100 mentioned biodiversity in reports, and 31 made clear biodiversity commitments, of which only 5 were actionable: Walmart, Hewlett Packard, AXA, Nestlé, and Carrefour.
- Both the most commonly disclosed qualitative information (disclosed by 37 companies respectively) and qualitative information( (9 companies) concerned habitats protected or restored and partnerships formed.
- Only 9 companies provided quantitative indicators to verify the magnitude of their activities (e.g., area of habitat restored).
- No companies reported quantitative biodiversity outcomes, which the authors said made “it difficult to determine whether business actions were of sufficient magnitude to address impacts and were achieving positive outcomes for nature.”
As a result, the report’s authors concluded that the 2016 Fortune 100 Global companies gave biodiversity limited treatment in sustainability reports. These empirical findings support accounting and accountability research, suggesting that corporate biodiversity accountability is in its infancy.
Interview with Report Author Prue Addison
In order to clarify the discrepancies that I found between the press release and the actual research report on Fortune 500 biodiversity accountability, I reached out to the report’s author group. Prue Addison, NERC Knowledge Exchange & Research Fellow in the Department of Zoology at University of Oxford, agreed to answer some questions. I admitted that I was particularly interested in what Fortune 100 and other companies can do to get finance companies to make biodiversity commitments, regardless of risk levels. Here are Addison’s responses.
“For the finance sector as a whole to sit up and take notice of biodiversity, I think a system-level change is required. I think stronger external market forces are needed to encourage businesses to take action for biodiversity, and this will mean a mix of environmental regulation, financial incentives, and shareholder and stakeholder pressure, to raise the profile of biodiversity and get finance companies to commit to operating responsibly.
I also think research is required to begin to quantify the risk that biodiversity loss poses to different sectors to help finance companies actually realise the reliance that investments have on nature, and how external market forces may begin to affect the sustainability of investments for non-compliant companies.
It certainly is possible for finance companies to step ahead of the game now by making commitments, and importantly taking action to halt the loss of biodiversity. A great example is the ASN bank, which have committed to have a ‘Positive effect on biodiversity as a result of all of our loans and investments by 2030.’ They have said they will do this by compensating ‘the ecological damage caused by our loans and investments by means of activities that increase biodiversity.’ Such transparency is admirable. The next step is to evaluate whether the actions taken by companies like the ASN bank are achieving their goals, and helping the global challenge to halt the loss of biodiversity.“
Biodiversity Accountability and Conservation Stewardship
Corporate biodiversity accountability (through external disclosure of commitments, activities, and performance) is an important aspect of organizational stewardship and legitimacy. Generally, pressure to maintain biodiversity has come from the public sector in the form of guidance, tools, standards, and regulations. The public sector has mandated and encouraged the private sector to manage their impacts and dependencies on biodiversity.
However, some in the academic world suggest that conservation scientists have failed to engage with the mainstreaming‐biodiversity agenda and that there is an urgent need for a “science‐driven field of biodiversity mainstreaming.” Such a gestalt would stimulate more conservation scientists to critically analyze business biodiversity progress as well as to support and improve current mainstreaming activities.
Addison explained why such science/ business relationships would prove beneficial.
“Biodiversity underpins the resilience of ecosystems, economies and societies. Many businesses can be reliant on biodiversity, such as those in natural resource sectors. But many other sectors will find that biodiversity is relevant to business operations, too – particularly since regulators, financial institutions, and society are increasingly demanding responsible corporate practice when it comes to managing biodiversity impacts. Biodiversity is a critical aspect of the living environment that should be considered across public and private sectors, if we are to halt the biodiversity declines that have been witnessed around the globe over recent decades.”
Hopefully, this study is a starting point for what will become the evolution of corporate biodiversity accountability. This report made transparent how businesses currently treat biodiversity in their public reporting, which opens up opportunities for scientists to contribute in targeted ways — developing science-based corporate biodiversity commitments, designing robust and relevant quantitative biodiversity indicators, and modeling how biodiversity accountability can match the intent within the UN’s Sustainable Development Goals.