Summary: It might seem that reversing the impacts of biodiversity loss is a government problem, but solutions at the company and financial investor level are emerging, but they need nurturing and developing. As part of this, as well as our regular work on Human Rights, this year we have started to draw in adjacent issues, in particular Biodiversity. To us this is going to be one of the key “emerging” risks for investors, asset managers and companies over the next few years.
Why this is important: As the concept of double materiality gains more traction, companies, investors and asset managers need to be more informed about the legal and financial risks related to the impact that their activities have on the wider world. Fully half of the world’s total economic activity – around A$61 trillion – is moderately or highly dependent on nature and its services.
The big theme: Human rights are a big theme in their own right. What is sometimes less appreciated is that they are intrinsically linked to a series of wider social and environmental topics. One of these is the importance of bio diversity, which is both an environmental and a societal/human challenge. Companies and investors need to stay ahead of the curve on this. These are not just good corporate citizen topics anymore; they are becoming a critical driver for a company's long term financial success or failure.
Summary of a story from The Conversation
As the economist Herman Daly pithily said, the economy is a wholly owned subsidiary of the environment – not the reverse. Nature makes our lives possible through what scientists call ecosystem services. Think healthy food, clean water, feed for livestock, building materials, medicine, flood and storm control, recreation, and attractions for tourists. Despite this, Australian businesses and financial institutions have so far failed to track how their activities both rely on and affect nature. This means our investments and superannuation could be exposed to hidden financial risks because of nature loss – and may also contribute to the destruction of nature.