Until mid-2020 Duncan Pollard was Vice President of Sustainability and Stakeholder Engagement at Nestlé where, among other responsibilities, he worked on Nestlé’s approach to biodiversity from a land-use context.
“The corporate world needs a new mindset on nature and biodiversity because, right now, companies are frequently blind to the significance of biodiversity loss to their business models.”
The corporate world needs a new mindset on, and understanding of, nature and biodiversity because, right now, companies are frequently blind to the significance of biodiversity loss to their business models. Of course, everyone gets the emotional reason; the reputational risks associated with images of deforestation spur efforts to eliminate these within value chains. Yet the prevailing view of “do no harm” misses the point that many businesses are dependent upon collective efforts to preserve nature and biodiversity for their continued success.
There is a good analogy: for companies, sales are one thing, but the diversity of those sales is important to deliver resilience against the various shocks that a business faces. This distinction can form the basis of a new understanding on the significance of nature to business. It starts with dependency but then makes the distinction of nature as an asset, and biodiversity as the diversity of that asset.
For companies that depend upon the land – food, forest products, luxury goods, clothing – nature and biodiversity are critical issues, as well as part of a sensible strategy. Farming systems that have a high biodiversity – of the soil, farm and landscape – are the ones that will have the highest resilience to threats such as increasingly erratic rainfall patterns and pests. We need to focus upon soil health, through having a rotation of crops and a farming system that is less about chemistry and more about biology. Resilience to pests and diseases will come by having diverse farms in a diverse landscape.
Investors and consumers hold the key to how companies will embrace a new approach to nature and biodiversity. Efforts are under way to create a “Task Force on Nature-Related Financial Disclosure”. Investors will use this to ask the question, “What is the risk to a business from the loss of nature and the loss of biodiversity?”
Companies do not yet have the answers. Work on climate change has given us some pointers, while COVID-19 has made everyone acutely aware of the risks of diseases. But we need far more research and understanding on the consequences of declining insect populations for pollination, and more besides.
Consumers, meanwhile, want more “close to nature” agriculture. There is a huge opportunity to build brands upon “nature” and create a consumer pull. Companies need to actively invest in diversity. Just 12 plants and 5 animal species supply us with 75% of our global food and genetic diversity of these ingredients has been lost over the last century.
Companies, investors and consumers are unlikely to make these changes alone; regulation and policy incentives on nature and biodiversity are also needed. Shifting global taxation away from people to resource use (justifiable also for tackling inequalities) would be a good start. As would a more explicit focus on true costs and true values, involving the measurement and financial reporting of environmental externalities.
We know how to do these things. There is no justification to delay.