Business and Biodiversity – Change In the Making?

Alejandro Litovsky

October 28, 2009

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A UN-backed report looking at 31 companies in the food, drink and tobacco industries, predicted increasing risks to the supply of raw materials and reputation risks for firms that undervalued natural services such as healthy soils, water and insect pollination, in line with earlier posts I’ve done on this subject.

While the report’s finding is not surprising — that companies are failing to address issues of sustainable sourcing — the coalitions and investor networks that are forming around the issue are a sign of serious action in-the-making.

The report was published by the Natural Value Initiative (NVI), a collaboration between UNEP’s Finance Initiative, Fauna & Flora International and FGV, the Brazilian business school. Their partnership aims to raise awareness on the links between biodiversity, investment value and the finance sector, as well as mobilise investors.

Of the companies surveyed, only Unilever qualified as best practice, judged against a new Ecosystem Services Benchmark took, which evaluates the strategic approach to the risks faced by a drain on raw materials. The UK retailer Marks and Spencer was also praised.

A toolkit will enable investors to evaluate biodiversity impacts and ecosystem services dependency within the food, beverage and tobacco (FBT) sectors. NVI’s toolkit will be trialled by a range of finance institutions with substantial active investments in FBT sector companies, and will be launched publicly at the UNEP FI Global Roundtable in Cape Town in October 2009.

Also on our radar

Another initiative by UNEP’s Finance Initiative is the Forest Footprint Disclosure Project (FFD Project); a new UK government-supported initiative, created to help investors identify how an organisation’s activities and supply chains contribute to tropical deforestation, and link this ‘forest footprint’ to their value. The FFD Project launched on 15 June, 2009 at with the backing of 12 major financial institutions with over $1.3 trillion in assets under management.

In January 2010, the first annual disclosure report will:

  • Identify companies leading on this issue
  • Analyse how companies are positioned to sustain their value
  • Offer peer group comparison of companies to drive sector performance improvement

The FFD Steering Committee Members are: Carbon Disclosure Project, Fauna & Flora International, Global Canopy Programme, The Prince’s Rainforests Project, Strategic Environmental Consulting, UK Department for International Development and UNEP Finance Initiative.