Why a new approach to biodiversity is needed

Without diversity, there is no prosperity

The ecosystem services provided by biodiversity form the basis of our prosperity and social well-being and are therefore also the economic foundation: all economic processes are based on ecological resources or at least presuppose their existence. However, if biological diversity and thus the performance of ecosystems decline, the economy is confronted with a wide range of risks, from operational and reputational to legal and financial.

Biodiversity in second place

In addition to the now very prominent topic of climate, biodiversity has so far been neglected by companies. Regulators have also recognized oversight. In addition to being anchored in the EU Green Deal, the EU Taxonomy and the EU Renaturation Act, companies are now also obliged to address their impact on biodiversity as part of the CSRD. In the future, companies will have to ask themselves: What influence does our work have on biodiversity and what influence does biodiversity have on our business model? In many cases the answer to both questions will be: quite a big one.

Human factor

Small mass, enormous impact: Although humans only make up 0.01 % of the biomass on Earth (this corresponds to 0.06 of a total of around 550 gigatons of carbon), they have affected an estimated 83 % of wild animals since their first appearance, including 80 % of the Marine mammals, half of plants and 15 % of fish wiped out. However, the biomass of domesticated livestock has increased dramatically due to human influence. While wild animals make up just 4% of the biomass of all mammals, humans account for 36 % and their livestock for 60 %. Similarly with birds: 30 % wild birds compared to 70 % domesticated birds. Since the middle of the 20th century, human technical and industrial activities have been so massively noticeable and detectable that many scientists speaks of a new geological era, the “Anthropocene”. Humans are the cause of an unprecedented mass extinction. According to the World Biodiversity Council, one million of an estimated 8 million animal and plant species are threatened with extinction. In Germany alone, the biomass of flying insects has declined by over 75 % in the past 27 years. Only 6.3 % of Germany's land area is nature reserves, the rest is managed by human. With the consequences mentioned above.

Biodiversity strategy as part of the corporate strategy

In order to counteract the loss of species, ecosystems and genetic diversity within individual species, biodiversity strategies must be incorporated into corporate strategy. This is because the risks posed to commercial companies due to dependencies on ecosystem services can also be transformed into opportunities and innovation potential by addressing biodiversity protection, increasing competitiveness and securing company success in the long term:

	More and more stakeholders understand the impact of economic activities on biodiversity and expect companies to present these connections transparently.
	Biodiversity is increasingly in the focus of regulators and investors, who are demanding disclosure of the impacts, dependencies, and biodiversity-related opportunities and risks of business models.

From automotive companies to energy suppliers to international asset managers, we have already helped many companies in understanding their influence on biodiversity and enhancing their innovation potential. We would also be happy to support your team.

How we support you

Keynote speech “Fascination with biodiversity”

We convey why intact nature is key to our (economic) survival and how it is relevant to the success of your business

Biodiversity Boot Camp

We offer an in-depth, interactive overview of the importance of the biodiversity crisis for society, the economy and your own company with many practical examples

Workshop “1 HourForBiodiversity” (#1HFB)

In an interactive one-hour format, we sensitize and activate your entire workforce on the topic of biodiversity in a playful and highly informative way

Fit for Legislation – Biodiversity

We ensure that you meet all ESRS E4 “Biodiversity and Ecosystems” regulatory requirements

Fit for Strategy – Biodiversity

We would be happy to help you build your strategy around the topic of biodiversity, or adapt or sharpen an existing strategy

Contact me:

Dr. Alexis Katechakis

Managing partner and marine biologist

Phone: +49 151 19184526
E-mail: alexis.katechakis@fors.earth

What companies should know about biodiversity

Here you will find the most important questions and answers. We would be happy to answer any further questions in a personal conversation.

1. Natural capital: What is the economic value of biodiversity?

The following services are referred to as ecosystem services:

	Regulating ecosystem services (e.g. climate regulation, water quality)
	Providing ecosystem services (e.g. energy, food and feed)
	Supporting ecosystem services (e.g. photosynthesis, soil structure and nutrient circulation)
	Cultural ecosystem services (e.g. education, inspiration)

The economic value of all these ecosystem and biodiversity services is estimated at €40,000,000,000,000 annually and is equivalent to half of global GDP. Examples include:

Avalanche protection forests instead of steel barriers, which otherwise cost around a million francs per hectare. In the canton of Bern, around 24,000 hectares of forest protect settlements and traffic routes from avalanches.
Mangrove forests that protect coastal areas can reduce insurable property damage by more than 16 %. Property damage from Hurricane Irma in Florida was reduced by 25 % (US$1.5 billion).

2. What are ecosystem services and what is their potential?

In total, there are about 18 ecosystem services: creation and maintenance of habitats, pollination and dispersal of seeds, etc., air quality regulation, climate regulation, ocean acidification regulation, regulation of the amount of fresh water, regulation of the quality of freshwater resources and coastal waters, construction, protection and decontamination of soils, regulation of hazards and extreme events, regulation of pests and diseases, energy, food and feed, materials and support, medical, biochemical and genetic resources, education and inspiration, physical and psychological experiences, attachment to home, options for the future.

According to a study by the World Biodiversity Council IPBES, 14 of these 18 are declining. This means that not only quality of life and health are at stake, but also prosperity and economic development.

3. What are the biggest drivers of the biodiversity crisis?

According to UN environment chief Inger Andersen, the “five horsemen of the biodiversity apocalypse” are:

	Land use change (e.g. destruction of habitats through conversion of biotopes into arable land)
	Over-exploitation (exploitation of rare animal and plant species)
	Environmental pollution (e.g. through emissions, nutrient inputs)
	Climate crisis
	Spread of invasive alien species

4. What risks arise from man-made biodiversity loss?

All companies are dependent on intact ecosystem services and at the same time influence the quality of these ecosystem services through overexploitation, pollution, changes in land and sea use, as well as through the upstream and downstream activities in their value chains.
Negative impacts of biodiversity loss often go unnoticed by companies until they are eventually reminded of it, often with irreversible consequences – such as a disrupted value chain, rising regulatory compliance costs and reputational problems.
For financial institutions, these risks are multiplied due to their involvement with many more companies through their products. Any loss of biodiversity and thus a reduction in nature's ability to provide ecosystem services, will have an even more drastic impact, which is then expressed in the form of insurance claims, investment losses or loan defaults.
According to the World Economic Forum's Global Risks Report 2023, environmental risks account for six of the top ten risks to businesses worldwide. Ecosystem collapse and biodiversity loss are among the top four risks, alongside natural disasters and a failure to mitigate the climate crisis.

5. What do reporting companies have to report on biodiversity as part of the CSRD?

If biodiversity is a material topic for a company, it must take a position on the following points within the framework of the CSRD:

	What is the status of its transition plan on biodiversity and ecosystems (ESRS E4-1)
	Which guidelines are used in connection with biodiversity and ecosystems (ESRS E4-2)
	What measures are taken and resources used in connection with biodiversity and ecosystems (ESRS E4-3)
	Which goals are set in connection with biodiversity and ecosystems (ESRS E4-4)
	Which impact metrics are used in connection with biodiversity and ecosystems (ESRS E4-5)
	What are the possible financial impacts of biodiversity and ecosystem-related risks and opportunities (ESRS E4-5)