Diversity comes in many forms — and usually is a source of strength, resilience and creativity. Leading companies increasingly recognise that human, social, economic and ecological diversity all contribute to business success. But the outcomes generally depend on the quality of management. Just as high quality managers have a vested interest in sustainable access to resources, so those championing diversity in its multifarious varieties have a vested interest in the quality of business strategy and management.
The undercapitalised issue So, to what extent do we see any acknowledgement of these links in company sustainability (or extra-financial) reports? The answer, worryingly, is to a very limited degree. Around the world, even leading companies have been slow to report on their dependency on biodiversity, let alone on the business case for conservation.
How do we know this? Every two years, SustainAbility samples the best sustainability reports worldwide (1). Our Global Reporters Programme is supported by the United Nations Environment Programme (UNEP) and Standard & Poor’s (S&P). The latest report — Tomorrow’s Value — features a list of 50 Leaders whose reporting scores well against a benchmarking methodology that has evolved since 1993.
We found only 3 companies, out of the Top 50, that explicitly pointed to biodiversity as one of their priority concerns. These were the Brazilian cosmetics company Natura, New Zealand utility Water Care and British-Australian mining company Rio Tinto. Climate change, by comparison, was identified as a top issue by 10 of the companies surveyed — itself a strikingly low score, but partly explained by the multi-faceted issues such as ‘environmental impact’ prioritized in some reports.
In the same study, we noted that leading companies are starting to change the focus of their corporate responsibility strategies from risk-management activities to embrace innovation and market opportunities. While it is still crucially important to focus on a given company’s license to operate, decreased risk of environmental litigation and cost of access to capital for example, the spotlight is opening out to embrace wider value creation. In the process, business leaders are reviewing their companies’ capacity to innovate, their access to intellectual capital, and the extent to which their business model is likely to remain competitive in a world increasingly focusing on sustainability issues.
Many companies that do not formally prioritize biodiversity as a key strategic issue are no doubt managing it professionally, but biodiversity still remains an under-capitalized issue. Clearly, corporate brains are far from making the connection between biodiversity and long-term value creation.
Mapping biodiversity risks and opportunities As one step towards finding solutions, SustainAbility is collaborating with IUCN to develop a tool to help businesses map risks and opportunities, and identify areas where they can derive real value from biodiversity conservation. Some multinational corporations have both a genuine interest in sustaining biological resources, and are prepared to act. But for many others, the business case for action still needs to be made.
Hope comes at both ends of the business scale spectrum. At one end, for example, we have the giant companies that are referred to as ‘universal investors’. This tag, borrowed from the financial sector, suggests that the company relies on so many customers, suppliers and partners to operate and grow that it has a clear and genuine interest in the overall health of the systems within which it operates — and the resources to act. At the other end of the spectrum, we see growing interest in the world of social and environmental entrepreneurs, among them the Marine Stewardship Council, which just won a Skoll Foundation award to support its work.
Recent years have seen two of these entrepreneurs win the Nobel Peace Prize: Wangaari Mathai in 2004, for her work on African green belts and reforestation and, last year, Muhammad Yunus of the Grameen Bank, for his work on microfinance. The extraordinary achievements of such people — and those inspired by their work — are discussed in our latest report, Growing Opportunity, which is subtitled “Entrepreneurial Solutions to Insoluble Problems” (2). Interestingly, the work was supported not only by the Skoll Foundation but by a major company (DuPont) and a financial institution (Allianz).
Transforming markets Our hope is that by working to reinforce such thinking and actions at either end of the business spectrum, we can progressively drive the agenda — and a sense of urgency — deeper into the business world and higher up boardroom agendas. Twenty years after the publication of the Brundtland Commission Report, Our Common Future, we have made much progress.
The latest wave in this space has been triggered by the success of An Inconvenient Truth, but it is significant that most of the business concern and commentary about climate change still focuses on human and economic impacts rather than on the biological and ecological consequences.
One exception to this trend has been the media coverage around the new Svalbard International Seed Vault (SISV), which will serve as a repository for crucial seeds in the event of a global catastrophe. Carved into the permafrost of the remote Svalbard peninsula, it will eventually house three million seed samples from every country in the world. An intelligent strategy, clearly, but how sad that it has come to this: a Noah’s Ark to prepare for the impact of species loss.
The battle to gain attention may be close to being won, it seems, but the war to ensure that the concerns translate into the necessary business and market transformations has only just begun.
John Elkington is Founder and Chief Entrepreneur, and
Jean-Philippe Renaut is Analyst,
SustainAbility Ltd.
(1)
http://www.sustainability.com/insight/research-article.asp?id=458 (2)
http://www.sustainability.com/growing-opportunity