Biodiversity and Corporate Management
Takafumi Ikuta
Research Fellow, Economic Research Center
October 19, 2009 (Monday)
Issues concerning biodiversity, or the richness of ecosystems and species, are garnering attention. Many companies depend on the bounties of nature, which are products of biodiversity, for procuring raw materials and so on, and there is concern that business activity is damaging biodiversity. The TEEB Interim report indicates that deforestation will yield losses of up to 3.1 trillion euros per year, or 6% of the world GDP. It is therefore necessary that companies also make efforts towards biodiversity conservation and sustainable utilization.
Internationally, a goal of “significant reduction of biodiversity loss” by 2010 was set under the biodiversity treaty, and it was resolved that the private sector would participate. New post-2010 goals, such as rules for profit distribution between countries of origin and developed countries, are to be established at the Convention of Biological Diversity COP10 meeting in Nagoya next October. Domestically, the Basic Act on Biodiversity, which went into effect in June 2008, clearly stipulates the responsibility of businesses. The Nippon Keidanren announced the “Biodiversity Proclamation” in March, while the Ministry of the Environment plans to set corporate guidelines by this summer. NGOs (non-governmental organizations) have also begun evaluating companies’ biodiversity activities.
Efforts promoting biodiversity not only help to avoid penalties, but also mitigate corporate risks such as procurement standards, company ratings, and brand and corporate image. Biodiversity conservation is also important for the sustainable procurement of raw materials. Moreover, the increasing value placed on biodiversity has produced new business models such as biodiversity offset services and various certification services.
Though evaluation methods, system design, and other areas concerning biodiversity are still under review, it is clear that biodiversity will become an important mid- and long-term issue for corporate management. Companies first must place their response to biodiversity issues as a core business strategy, not just environmental protection or social contribution. While clarifying the risks and opportunities involved, it is also necessary to formulate a specific action plan.
FRI responds to the needs of our customers regarding environmental issues by conducting research and disseminating information on the latest environmental trends around the world; supporting environmental management and the development of business strategies for companies; and assisting the formulation of environmental policy for both national and local governments.