Climate risk may have rocketed up the corporate agenda in Asia in recent years, but why biodiversity is important to business has yet to take root in the region’s boardrooms.
Fewer than half of listed companies in Japan, Thailand, Hong Kong and Singapore make more than a passing mention of biodiversity in their corporate reports, and a small proportion of the region’s largest companies have prioritized nature as a business-critical issue. Report card from Nature Positive, an environmental consultancy.
The study searched the reports and websites of 192 companies listed on four stock exchanges and documented how many companies referred to biodiversity, where biodiversity appeared in materiality assessments and the efforts companies are making to address its impacts on nature.
Seventy percent of companies related to biodiversity in some way, but only 42 percent highlighted nature as a key issue. Of those companies that see biodiversity as a material issue, only a handful (4 percent) consider nature a priority for their business and have goals to reverse biodiversity loss.
More than a fifth of companies (22 percent) appear to be using biodiversity as a buzzword, without making a connection between nature and how companies depend on it for their survival, the report says.
Japanese companies are by far the regional leaders in considering biodiversity as a business issue, and their frequent use of the term in company documents has skewed the overall data, the report’s authors noted.
Companies paying more attention to biodiversity are the ones that have already faced biodiversity crises.
Supakorn Ekachaiphiboon, Deputy Vice President, Sustainable Development, Stock Exchange of Thailand
“I think businesses are struggling to understand their impacts and dependencies on biodiversity, and there’s this misconception that this is unique to agriculture and food companies,” said Pei Ya Boon, regional conservation program manager at the nonprofit Wildlife Conservation Society. who was interviewed for the study.
Although some companies run conservation programs, the report found no evidence that companies conduct audits on their impacts on biodiversity, making it difficult to gauge how effectively these programs offset their impacts on nature.
The report’s authors noted that a focus on reducing carbon and emissions may have left companies little leeway to consider the value of biodiversity to their operations.
dr Stephanie Wray, chief executive of Nature Positive, said while it was encouraging to see some companies talking about biodiversity in a region that is losing natural areas at a faster rate than anywhere in the world, whether they are taking meaningful action to mitigate their impact counteracting nature is questionable.
Only recently has the corporate world begun to connect the dots between biodiversity loss and corporate survival. Businesses rely on healthy ecosystem services for their production processes to maintain soil, water and air quality and build resilience to climate change.
The Asian listed companies that are most likely to see this connection are those that depend directly on nature, such as Consumer staples, energy and materials. Companies with a less obvious connection between their industry and their nature, such as B. information technology and health care, were the least recognized Biodiversity as a key issue, according to the study.
“Companies that are paying more attention to biodiversity impacts are typically those that have faced crises related to biodiversity issues or who can clearly see the link between their operations and biodiversity risks,” said Supakorn Ekachaiphiboon, Deputy Vice President for sustainable development at Stock Exchange of Thailand.
Singapore-listed palm oil company Wilmar, which has pledged to clear weeds from its supply chain, was singled out for its efforts to educate its supply chain on biodiversity impacts, while Filipino energy utility Manila Water was singled out as one of the few companies to do so carried out a biodiversity audit.
The report comes ahead of the United Nations Convention on Biological Diversity (COP15, also known as “Nature’s COP”) in Montreal in December, where world leaders are expected to negotiate an agreement address biodiversity Loss. The agreement aims to establish a framework for the production and consumption of natural resources that could impact the way businesses are run in the Asia-Pacific region.
The Nature Positive report suggested that frameworks such as the Taskforce for Nature-related Financial Disclosures (TNFD) and tools such as science-based nature targets would help Asian companies better assess their relationship with biodiversity.
“Until we have common industry frameworks [such as TNFD and science-based targets for nature] Creating orientation and clarity, I think [biodiversity] goal setting will be limited,” said Sue Mulhall, global head of biodiversity and business partnerships at BirdLife International, a conservation group.
The authors of the report asked the region’s companies to rate them how they depend on and affect nature and set targets for biodiversity restoration.
A 2021 report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) found an unprecedented decline in the natural world and a record rate of species extinction. Nature in the Asia-Pacific region has declined 45 percent since 1970, according to a report by the World Wide Fund for Nature.