Dependencies and Impacts

“Biological diversity”, or “Biodiversity” means the variability among living organisms from all sources including, inter alia, terrestrial, marine and other aquatic ecosystems and the ecological complexes of which they are part; this includes diversity within species, between species and of ecosystems.

Every living organism, including humans, depend on its surrounding natural system or ecosystem. The resilience of ecosystems is directly related to the health of their biodiversity. When the biodiversity is healthy, meaning that there are naturally occurring types of species and classes of life within a given ecosystem, the ability of that ecosystem to cope with external shocks is greater. Thus, healthy ecosystems fare better at resisting natural disasters such as extreme weather or floods.

Businesses are both affected by, and rely upon, these ecosystem services and their underlying biodiversity, regardless of organization size, location and sector (see side box). Whether they can capitalize on the associating opportunities and avoid risks would, in turn, help build or destroy their competitive advantage.

  • The profitability of some industries depends directly on the health of ecosystems, for example forestry, fishing, agriculture and ecotourism.
  • Other sectors have a direct impact on ecosystems and biodiversity through their operations, such as mining, construction and energy.
  • For companies in these areas, a good track record on sustainability management is crucial for them to be able to obtain operating licenses and to maintain good relationships with stakeholders, such as local communities and NGOs).
  • Still other industries, such as cosmetics and pharmaceuticals, also depend on biological material and genetic resources in the creation and manufacture of their products.
  • Even the financial sector is exposed to risks caused by biodiversity loss. This is due to insurance claims and poor (or negative) returns on investments caused by natural and man-made disasters, made worse through environmental degradation. The financial sector can also have a major impact through project financing and the creation of new environmental markets, such as payment for ecosystem services, biodiversity offsets and REDD+.
  • At last but not least, many firms find inspiration in biological systems when they are designing new products, and all companies, in all sectors, rely upon the various ecosystem services provided free of charge by natural systems around the world.

Tools are available to support businesses in understanding their impact and dependencies on biodiversity and inform better decision making. The Natural Capital Protocol is one such example that helps businesses identify, measure, value and prioritize their impacts and dependencies on biodiversity and the ecosystem, which ultimately give businesses new insight into their risks and opportunities.