The conclusion of the renowned report by economist and emeritus professor Partha Dasgupta of the University of Cambridge is clear: business can no longer rely on the overconsumption of natural resources. Nature is our most valuable capital, and if we exhaust this capital, there will be no basis for any form of life.
Global conservation efforts have not succeeded in sufficiently securing biodiversity.
The business world has also recognized this threat. For example, the World Economic Forum (WEF) has identified biodiversity loss as one of the greatest threats to the global economy. It is estimated that over 50% of the world's GDP depends on nature and its services. Therefore, biodiversity loss poses a risk to practically all businesses, at least through their value chains. As a result, investors are increasingly interested in companies' impacts on nature.
The European Union’s biodiversity strategy aims to halt biodiversity loss by 2030. Although this goal is 20 years later than originally planned, the EU seeks to mitigate harmful impacts on nature and enhance positive effects through regulations supporting the green transition. These regulations include the EU taxonomy (classification system regulation), CSRD (Corporate Sustainability Reporting Directive), and SFDR (Sustainable Finance Disclosure Regulation). This three-pillar regulatory package aims to ensure the sustainability of EU-based businesses, reduce harmful impacts on nature, and secure financing for businesses that positively impact nature and the environment.
The International Panel on Biodiversity and Ecosystem Services (IPBES) has identified five drivers of biodiversity loss. These drivers include changes in land use, greenhouse gas emissions, pollution, overexploitation of natural resources, and the spread of invasive species.
How is the nature footprint calculated?
There is currently no unified standardized method or established unit for calculating the nature footprint, and no single calculation method can measure all drivers of biodiversity loss. However, there are several indicators that can measure impacts on nature. For example, measuring changes in land use and climate change explains a significant portion of the nature footprint. Therefore, companies that have already measured their carbon footprint may have inadvertently calculated part of their nature footprint as well.
Just like the carbon footprint, a significant portion of the nature footprint is composed of purchased products and services. The minerals, raw materials, and energy needed for their production come from various parts of the world. The nature footprint is typically a calculated average: activity X in a specific location produces, on average, such Y environmental impacts. The most well-known units for measuring biodiversity loss include Mean Species Abundance (MSA) and the Potentially Disappeared Fraction of species (PDF).
How can a company measure its nature footprint?
In practice, companies should start by assessing the environmental impacts of their operations using, for example, the LEAP model:
1. LOCATE: Identify connections to nature in different geographical locations and stages of the value chain.
2. EVALUATE: Assess dependencies and impacts on nature in these areas.
3. ASSESS: Define nature-related risks and opportunities in business operations.
4. PREPARE: Prepare to respond to these risks and opportunities. This includes externally reporting significant nature dependencies to stakeholders.
Various tools and databases are available for measuring environmental impacts and nature footprints, providing easier access to global effects occurring within supply chains. At Greenstep's sustainability services, we assist your company in initiating these efforts to clarify and generate necessary information. We identify connections to both legally binding requirements and strategically significant risks and dependencies. Our objective is for every company to formulate its own environmental strategy in the upcoming years to secure sustainable growth.
Published 17.05.2024