Loss of biodiversity, Bcg: “Only 1 company out of 20 has combated the phenomenon”

The impacts of climate change on man, on biodiversity and on ecosystems they are relevant for companies in every sector, since these also have direct consequences on their economic activity. Continue to ignore them destructive effects of pollution on the natural world and its resources, it will mean that businesses prepare to face catastrophic consequences in the long term. It’s the warning that Bcg addresses companies all over the world to warn them of the effects of the climate on human life, a topic that is being discussed in recent days at COP28in which 120 countries declared the link between health and climate change.

“Companies are increasingly aware of the impact of their actions on the climate. However, if 80% of the Fortune Global 500 have outlined objectives to mitigate their climate footprint, only 1 in 20 have done the same to counteract the loss of biodiversity. And the situation of Italian companies is completely comparable to this,” he underlines Pietro Romaninmanaging director and Partner of Bcg.

There are five key figures which, according to the American multinational business consultancy company, must be sampled to frame the problem and find the appropriate solutions: more than 40 thousand billion dollars a year in economic value, equal to approximately 50% of global GDP, depend directly on nature; will be necessary, according to the Paulson Institute, annual investments of $700 billion until 2030 to promote biodiversity; by 2050, 46% of global GDP will come from regions with high water risk; the economic cost of the risks associated with water crisis is on the rise: companies report a potential value of $225 billion; The Esg investments Perform better: The MSCI Emerging Markets ESG Leaders Index outperformed the broader MSCI Emerging Markets Index by 54% in 2021.

In light of these data, the messages that Bcg brings to the attention of companies are these: a energy system powered by renewable sources it will be 2 to 16 times better for nature and people. This transformation will have a positive impact on a number of key resources, including air and water quality, human health, biodiversity and ecosystems. And again: the reduction in the frequency and intensity of climate-induced disasters will make it possible to save 2,000 billion dollars a year in damage to infrastructure; in a future powered by renewable sources the demand for mineral resources will increase, but the amount of land impacted by mining due to the use of minerals will decrease fossil fuels. Furthermore, by continuing to use fossil fuels, we will have serious consequences on the amount of land lost due to floods, desertification and fires; rapidly switching to systems powered by renewable energy will create double the number of jobs.

In conclusion, Bcg provides 4 four pieces of advice to businesses. The first: there is no need to reinvent the wheel. Instead, you can refer to proven definitions and metrics. For example, for themes relating to nature the Taskforce on Nature-related Financial Disclosures (TNFD), with recommendations and guidelines for organizations. The second: eyes on the target. We must keep in mind what needs to be tracked and made public, based on the objectives set globally (for example the Sustainable Development Goals, the Paris Agreement, the Kunming-Montreal Global Biodiversity Framework). The third: learn from the climate journey. It is useful to observe how we move from scientific observations that lead to voluntary to mandatory climate reporting. This can serve as a best practice to accelerate the process of adopting additional standards. The fourth: look beyond risk mitigation and reporting. We need to focus on the opportunities arising from a nature-oriented approach, avoiding a vision solely oriented towards risk mitigation.