Damage to ecosystems can lead to financial losses and reputational risks for companies

Source: Socialfunds.com

The Convention on Biological Diversity (CBD), an international treaty that entered into force in 1993, defines biological diversity (biodiversity) as "the variability among living organisms from all sources, including terrestrial, marine, and other aquatic ecosystems, and the ecological complexes of which they are a part." One of the targets of the eight Millennium Development Goals (MDGs) is to "reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss."

A recently published sector report by the European Sustainable Investment Forum (Eurosif) examines the risks associated with loss of biodiversity confronting five industrial sectors considered particularly vulnerable. Research for the report was compiled by oekom research.

The report, entitled Biodiversity Theme Report, addresses risks to the agricultural, extractive, paper and forestry, real estate and infrastructure, and tourism industries. It considers both companies that depend on biodiversity and ecosystem services, and companies whose activities have an impact on biodiversity and ecosystems.

The business risks associated with species loss and the restricted functional capacity of ecosystems include decreased availability of resources, the likelihood of regulatory action to protect environmental resources, increased prices and limited access to capital and insurance, an increase in trends toward ecologically responsible purchasing, legal action, and reputational damage.

The report also finds opportunities for companies in vulnerable industries that take action to mitigate potential damage to species and ecosystems. Among the actions recommended in the report are a commitment to sustainable land management, the protection of ecosystems and other ecological resources, and involvement with initiatives aimed at protecting biodiversity and using resources sustainably.

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