Biodiversity loss is a global problem with impacts that are felt across borders and industrial sectors. For business, making mistakes with biodiversity risk management undermines a company’s operations, competitiveness and profitability. TBC’s specialist approaches help companies transform biodiversity risks into opportunities – helping to improve a company’s reputational standing, gain a competitive advantage through approval from the public, governments and financial institutions and secure a place in the market.
Non-technical risks account for over half of delays to oil and gas projects, with social conflict over environmental resources being the single biggest factor. Retro-fitting biodiversity management measures is also often more costly than applying good management principles from the beginning. Integrating biodiversity risk management into corporate decision-making from the outset of operations therefore makes good business sense and is key towards reducing operational and financial risks downstream.
Here we explore seven key approaches to managing risks.
Science-based targets are about aligning the environmental impacts of companies and cities with what the science tells us is necessary to stay within planetary boundaries. The post-2020 framework on biodiversity is expected to deliver new global goals on nature and biodiversity through the Convention on Biological Diversity (CBD). Science-based targets for nature will be one of the key processes for turning those global goals into achievable and proportional company- and city-specific targets.
The mitigation hierarchy is a tool that guides users towards limiting, as far as possible, the negative impacts on biodiversity from development projects. It emphasises best-practice of avoiding and minimising any negative impacts, then restoration, before finally considering offsetting residual impacts. The mitigation hierarchy underpins many of TBC’s methods. Our deep understanding of this powerful tool is demonstrated in A cross-sector guide for implementing the Mitigation Hierarchy authored by TBC on behalf of the Cross Sector Biodiversity Initiative (CSBI). The Executive summary and overview (available to download) offers an approachable digest of the subject.
Ecosystem services are ‘the benefits that people, including businesses, derive from ecosystems’. This is the definition used by International Finance Corporation’s (IFC) Performance Standard 6 (PS6) in “Biodiversity Conservation and Sustainable Management of Living Natural Resources”. IFC organises ecosystem services into four types: provisioning; regulating; cultural; and supporting services.
Biodiversity offsets are measurable conservation outcomes resulting from actions that compensate for the residual impacts of development projects after full mitigation. Offsets should aim to achieve no net loss and preferably a net gain of biodiversity.
Offsets are often seen as an innovative financing mechanism for protected areas – providing resources for governments struggling to meet protected area goals. For developers, they can mean a clear route to transfer management responsibility, assurance of long-term outcomes and high-profile delivery of compensation. However, ensuring that offsets really do offer a “win-win” solution is not so simple. Addressing three major concerns is essential for delivering environmental gains:
- Are new funds really adding to conservation resources, or just replacing them (additionality)?
- Are the biodiversity gains fair compensation for the biodiversity lost (comparability)?
- Will offsets be sustained over time, at least for as long as the impacts (longevity)?
Natural capital is another term for the stock of renewable and non-renewable resources (e.g. plants, animals, air, water, soils, minerals) that combine to yield a flow of benefits to people. Natural capital can also be defined as the world’s stocks of natural assets that include geology, soil, air, water, and all living things. It is from this natural capital that humans derive a wide range of services, often called ecosystem services, which make human life possible. The term ‘natural capital’ is an extension of the economic notion of capital to the goods and services provided by the natural environment. The stocks, in this case, are natural capital and the flows are ecosystem and abiotic services.
The basic targets of PS6 are clear and simple: a net gain for ‘Critical Habitat’ and no net loss for ‘Natural Habitat’ (Case study: IUCN and Rio Tinto collaborate to protect biodiversity at QMM Madagascar). In practice, there are significant challenges to defining Critical Habitat and demonstrating net gain with the level of confidence required by PS6. Moreover, there are few precedents from which to learn, and limited relevant technical expertise to plan and implement appropriate actions.
TBC has worked closely with lenders such as IFC, advising on the design of their policies and standards, and helping assess compliance of projects. Through this close working relationship, TBC offers a unique skill-set to clients wishing to fulfil the requirements of PS6.
World Bank Environmental and Social Standard 6 (ESS6) is analogous to IFC PS6 and has similar objectives – primarily to protect and conserve biodiversity and habitats, encourage the implementation of the mitigation hierarchy and promote sustainable management of living natural resources.