Companies are dependent on nature for valuable resources, and its loss is a critical risk: biodiversity loss and ecosystem collapse is one of the top five risks to the global economy in the WEF 2020 Global Risks Report.
However global supply chains – particularly those of transnational corporations – play a huge role in shaping international resource use and degrading nature. For example, a recent study
indicates that the global food system is on course to drive rapid and widespread ecological damage, with almost 90% of land animals likely to lose some of their habitat by 2050. A further study
shows how thirteen ‘keystone corporations’ control 11-16% of the global fisheries marine catch, and 19-40% of the largest and most valuable stocks, including species that play important roles in their respective ecosystem. Moreover, failure to take biodiversity into account can lead to reduced food supplies, disrupted supply chains, and economic losses. For example, lost revenues due to fisheries mis-management is estimated at US$83 billion in 2012 (WBG 2017
). As such, the private sector is a key stakeholder in delivering net positive outcomes foe nature.
Change is happening within the private sector
While some companies and sectors are engaging heavily with nature conservation and striving for a sustainable footprint from their operations – for example through the Cross Sector Biodiversity Initiative, the Equator Principles and the Natural Capital Coalition and the Roundtable on Sustainable Palm Oil – many are still unaware of the importance of nature and their negative impacts on it, or struggle with how to make meaningful commitments and ensure these commitments are aligned with their business models and profit margins. Greater engagement with the private sector is required for understanding how business operations can contribute towards the post-2020 framework.
The Mitigation & Conservation Hierarchy is central to delivering net positive outcomes in business operations
With its roots in private sector engagement through the mitigation hierarchy, the Mitigation & Conservation hierarchy can provide a clear step-by-step framework for understanding the impacts of business operations on nature, and exploring pathways to prevent and compensate for these impacts throughout their supply chains, and conduct additional conservation actions. This can also be conducted in the context of economic trade offs, allowing businesses to simultaneously achieve economic returns and net positive outcomes for nature.
Case study examples of private sector applications of the Mitigation & Conservation Hierarchy can be found for: