5 Main Threats to Biodiversity - Network for Business Sustainability (NBS) (2023)

Threats to biodiversity are mounting. Businesses need to understand the dangers—and the opportunities for action.

“The Basics” provides essential knowledge about core business sustainability topics.

Hands up if you can name thislittle-knownmember of the world economy:

• Every year, itprovides services valued at between USD$120-$140 trillion—more than 1.5 times the entireannualglobal GDP.

• More than55% of the world’s GDPdepends on its services.

• It isby far thecheapest and most effectivesource of the services it offers—and it isin dangerof going out of business.

Thisvitalcomponent of the economyisbiodiversity. Biodiversityisthe variety of living things. It means the many forms of lifethat exist in a given areaandon the planetoverall,and the waysin which thatlife is supported.An area with good biodiversity will have manydifferentforms of life in it: animals, plants, fungi, and others.These diverse species are all linkedto each other in anetworkcalled an ecosystem.

Different types of ecosystemssupportbusiness sectors ranging from food and clothing to insuranceandtourism.Economists calltheeconomically valuable goods and servicesthat ecosystems supply“ecosystem services.”These servicesincludecrop pollination, flood protection, and water purification.When there is enoughbiodiversityto keepthese ecosystemsworking well,theycanprovidetrillions of dollars’ worth ofservicesevery year.

Biodiversity and ecosystem services are threatened

Butecosystemservices are shutting down as species go extinct andthe ecosystemsgrowweakenedorunbalanced.The costs to businesses are massive.For example,in every yearfrom1997to2011, declinesinbiodiversity from just twocauses—changes inlanduseand damage to the landfromthosechanges—led to ecosystem-serviceslossesvalued atUSD $10-$31 trillion.

Business and biodiversitydependon each other. Businesses needfunctioning, diverseecosystems for theiroperations and supply chains. At the same time, the waythat businessesoperate and obtain those supplies affects whether the ecosystems will stayhealthyor not.

This article describes the main threats to biodiversity and what they mean foryourbusiness.

What are the main threats to biodiversity?

Scientists have namedfivemain threats to biodiversity.Knowing what they are and how they work can helpyouidentify waysyourcompany’spractices might be contributing to declines in biodiversity, as well as areas where you can change.

The threats are:

1. Changes to how we use the land and waters.Both our lands and our seascontainmany different ecosystems, and these are affected bybusinessactions.For example:when developers drain and fill in marshesor wetlandsin order to build housing, they take away the land that capturesexcess water during storms.The consequences can be drastic. When Superstorm Sandy hitNew York and New Jerseyin 2012, coastal marshlandreduced damages by 27%(USD $430 million) inNew Jersey,which hadkept quite a bitof its marshes.In New York,where almost all the marshes had been drained and developed,marshland protection reduced damages by only 0.4% ($140 million).

2. Overexploitation and unsustainable use.Activitiessuch aslogging,farming, and fishingcan bedone sustainably, but theyare often done in ways thatoverexploitaresource. When too many species, or even just a few important species, are taken out of the ecosystem,the whole network of lifein that areacan collapse. (Think of arockwall with too manyrockstaken out, or a spider web with too many strands cut.)Overall,peoplehave been taking far more from nature than it canafford.For example, 70% of fish stocks in the ocean are currently being overfished. A2016 studysuggestedthat the oceans could be empty of fish by 2050.

3. Climate change.We’re already seeinghotter temperatures, warmer oceans,andmore severe weather events.Many species can’t adjustto these conditions, andtheir numbers crash.The speciesendangeredinclude many pollinating insects, which contribute$235-$577 billion inecosystem-servicesvalueto the global economy every year.

4. Increased pollution.Pollutionofair, soil,andwaterposes a serious problem to many ecosystems.Tiny bits of plastic suspended in ocean waterbuild up inside fish, birds, and othermarine species.Industrial toxinskill many speciesin rivers and lakes.Air pollution makes its way into soil, leaves, and water. It all adds up to fewer species, less diversity, and weakened ecosystems.

5. Invasive species.Global trade brings species from their home ecosystems to other parts of the world, where there are often no predators to eat them and keep their numbers in check.The warming climate allows dangerous species such as disease-carrying mosquitos to thrive in new latitudes.Alien speciesoften throw their new habitats severely out of balance.For instance, thebrown rat, which originated in central Asiaand has invaded almost everypartof the world,hasdrivenhundreds ofspeciesextinctandcauses an estimated$19 billion in damageeach year in the United States alone.

How does biodiversity loss threaten business?

All businesses depend on the ecosystem services that biodiversity provides, whether directly or indirectly. So, as a report for the World Economic Forum notes, the steep decline in biodiversity “will inevitably impact bottom lines—for example, through reduced fish stocks disrupting commodity supply chains, economic losses from disasters such as flooding, and the loss of potential new sources of medicine.”

Some of the risks posed to business by biodiversity loss are:

• Operational risks:Many raw materials are becoming scarce or unavailable because ofoverexploited or disturbedecosystems.In 1992 theAtlantic cod stockcollapsedto just 5% of the former cod population; thisended 500 years of cod fisheries in Atlantic Canada and put nearly 30,000 people out of work in Newfoundland alone.

• Regulatoryrisks:Countries are limiting and regulating theuse of certain raw materialsandbusiness activities.For example, several countries in Southeast Asia have imposed partial or totallogging bansin recent years.

• Marketand reputational costs:Customersincreasingly demandthat businesses operate inenvironmentallysustainableand ethicalways.One study shows that87% of consumersworldwide want companies to protect biodiversity with their sourcing practices.

• Reduced access to capital and loss of investment opportunities:Lenders and investors, like consumers,increasingly demandassurancesthat companies are acting sustainably.Moremajorcompanies, including BNP Paribas SA andAXA, are signing ontobiodiversity-protection initiatives such asBusiness for Natureand committing to taking companies’ sustainability records into account when making investment decisions.

• Increasing insurance costs:Loss of the “ecosystem service” of storm and ocean-rise protectioncosts insurers billions of dollarsevery year. Much of this cost is passed on to companies.

How can businesses reduce threats to biodiversity—and find opportunities?

Businesses benefit from biodiversity and ecosystem services. And they can also benefit from protecting and restoring them.Integrating biodiversityconsiderationsinto strategy,operations, supply chains, and investment decisionscan lead tonew business services, products, and models.

Here aresomeways thatbusinessesare capitalizing on theseopportunities:

1.Sourcingmaterials sustainablyfor business longevity

Following best practices in sustainably collecting materials canincrease a company’s resilience.Cosmetics manufacturerL’Oréal,whichgets the raw materials forits productsfrom nearly 340 species of plantsoriginatingin 100 countries, has anewsustainable-sourcing policythataims for zerodeforestation.This is helping the company buildlong-term partnerships andstrengthen itssocial systems.

2.Innovating tocreate and expand profitable new markets

Increasingly, consumersand investors are demanding ethical and sustainable productsand services.That meannew business models, products, services, revenue streams, and technologies.Trading in carbon creditsis anexample of a new biodiversity-friendly market. These creditscanhelp protect forests, the climate,and communities.Thecarbon-offsets marketis predictedto be worth $200 billion globally by 2050.

3.Improvingrelationships with society

Some businesses are showing great leadership in creating and joiningpartnershipsfor ecosystemprotection andregeneration.Broad-based partnershipsincludethe Global Partnership for Business and Biodiversity, Business for Nature,andthe One Planet Business for Biodiversity (OP2B) coalition.These efforts can strengthen relationships with essential stakeholders, from employees toregulators.

The way forward: global partnerships for business and biodiversity

The threats to biodiversity are real.But increasingly,businesses, individuals, and organizations are finding innovative, collaborative ways to protect the planet.Excellent modelsexist.Ultimately,we needaccelerated actionandcollaborationat scalein orderto sustainably use,conserve, andrestore biodiversity.

Creating better business in this way will help to achieve many common societal goals,includingthoseunderpinned by the Sustainable Development Goals.Get involved to turn threat to opportunity and create a better planet for all.

Reports on business and biodiversity

• Brondizio, E. S.,Settele, J.,Díaz, S. and Ngo,H. T. (editors) (2019).Global assessment report on biodiversity and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. IPBES.

• Almond, R.E.A.,Grooten, M. and Petersen, T. (editors) (2020).Living Planet Report 2020 – Bending the curve of biodiversity loss.WWF.

• World Economic Forum. (2020).Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy.

• World Economic Forum. (2020).New Nature Economy Report II: The Future of Nature and Business.Report No. 2.

• Bateman, I. J. (coordinating lead author),et al. (2011).Chapter 22: Economic values from ecosystems. The UK National Ecosystem Assessment.

• OECD. (2019).Biodiversity: Finance and the Economic and Business Case for Action. Report prepared for the G7 Environment Ministers’ Meeting, 5-6 May.

  (Video) Stakeholder Open Webinars on the Post-2020 Global Biodiversity Framework

About the Series

“The Basics” provides essential knowledge about core business sustainability topics. All articles are written or reviewed by an expert in the field. The Network for Business Sustainability builds these articles for business leaders thinking ahead.