On business and biodiversity: a view from Nagoya

At the Convention for Biological Diversity’s Conference of the Parties 10 that is ongoing in Nagoya, Japan, opinions are divided on whether business has a role to play in biodiversity. Strange though that may sound, at the same Conference some businesses are justifying that opinion by their actions. Major pharmaceutical companies in several Western nations blocked the adoption of important international conventions that would govern the principle of payment for environmental services. Their actions notwithstanding, business is the problem, but business is also the solution.

Degradation of the environment through destruction of natural habitats began the day the first human settlement was established – 150-200,000 years ago. Man’s impact on Nature has increased and recently entered a particularly intense phase with demand for biofuels, food production creating a several unsustainable relationship between man and nature. All this comes at a cost though, for the over exploitation of nature has already had remarkable costs. The European Commission’s Biodiversity Unit revealed this morning that the contribution of world fisheries to the global economy fell by Euro 50 billion due to environmental degradation. That is set to increase, and business led environmental damage like the recent BP oil spill will only intensify opinion that business is the problem.

What are the options? Governments have been mixed in their response to environmental issues. A few, like Japan, have established guidelines and made definite strides in the right direction, but most “…continue to engage constructively to contribute to an agreed outcome on a post-2012 arrangement that is both environmentally effective and economically sustainable.” As the GRI’s Sean Gilbert pointed out at COP10, the problem with continuing on a journey, is that you might never reach the destination.

That leaves us with business. The bad guy and also the good guy. There are two types of business – the large Corporation and the Small and Medium Enterprises. As opined several times at the International Business and Ecosystems Dialogue at COP10, all depend on consumers for their existence. Consumer pressure should therefore be an effective inducement to business at all levels, to be more environmentally responsible. That though is complicated by an important consideration – relying on the consumer to drive environmental sensitivity amongst businesses risks forcing a consumer, or marketing, alignment to conservation strategies. The rush to secure various forms of certification and broadcast the fact in the media is an example of this. It means that the more charismatic animal species and the areas most in the public eye will have much more likelihood of adoption by businesses for conservation, whilst those less visible, although equally critical to biodiversity, may not.

Yet, business is very much a part of the solution to achieving sustainability. Being largely the culprit as well, engagement of business at a more focused and broader level and forcing fundamental change in the behaviour of business, can achieve significant progress towards sustainability. Achieving an equilibrium between human use of resources and those available or renewable on our planet is achievable, but it demands urgent and comprehensive action. That action is not being taken by governments, and cannot be undertaken by conservation NGOs alone, or by individuals – however great their goodwill might be. No single sector or group has the resources and reach that business commands. Failing to engage business would be an irrevocable and fatal error.

We need to go beyond what is being advocated generally on engaging business in environmental issues. Most companies exist specifically to make profit, and they, and their shareholders, logically emphasise profit. There are exceptions of course but generally a CEO who strongly advocated sustainability and modified corporate policy with the usual short term costs of more responsible behaviour, would almost surely risk his or her job at the next quarterly performance review. The pressure for a greater environmental conscience needs to be applied therefore, not only on consumers, but also on shareholders. Every business will respond to the demands of its customers, but shareholders can make sure that response is ethical, transparent and achieves a tangible environmental outcome.

‘Pressure’ may be a harsh word, because pressure should not be required in encouraging sustainable behaviour. The arguments are clear and even in spite of the tenuous arguments of doubters, it only takes 10 minutes of watching the World News to demonstrate to any sceptic that we are facing a gathering storm of environmental consequences. The only ‘pressure’ that is required is education, for with the knowledge of the vulnerability of marine and terrestrial habitats, species already extinct and highly vulnerable, will surely bring a desire to act.

Governments and Non Governmental organisations have a wealth of information on environmental issues, hidden in Congress papers, and Reports of various sorts. This information needs to shared proactively with businesses (and individuals) who need help in acheiving their potential as partners in addressing environmental issues. Empowered with information, and ideally also encouraged by good guidelines, business will respond. The UK Government’s Stern report ominously stated that

analyses that take into account the full ranges of both impacts and possible outcomes – that is, that employ the basic economics of risk – suggest that BAU climate change will reduce welfare by an amount equivalent to a reduction in consumption per head of between 5 and 20%.

Sir. Nicholas Stern also stated in his exhaustive review,

The additional costs of making new infrastructure and buildings resilient to climate change in OECD countries could be $15 – 150 billion each year (0.05 – 0.5% of GDP).

That was in 2006, and the Stern Report is so old that it is now in the National Archives of the UK. It clearly outlines why sustainability and the self interest of businesses are aligned. A Price Waterhouse Coopers representative at COP 10 mentioned that in a 2009 survey, 44% of business leaders thought their governments should be doing more about the environment. The situation may not be as bad as it seems, and there are some wonderful examples of business protecting and enhancing biodiversity. These few though are not enough for the scale of our environmental problem is such that an unequivocal and universal response is required. Companies are a product of their environment – they will respond to customer demands and are subject to shareholder will. With a little help from both, and an effective framework from government, even business could become a force for good in the environment. The alternatives? There are none. A lack of concerted action means that irrevocable damage has already been done.

Dilmah Conservation is a part of the fulfillment of Merrill J. Fernando’s wish to make his business a matter of human service. Together with the MJF Charitable Foundation which has a humanitarian objective, Dilmah Conservation utilises revenue from the global sales of Dilmah to address urgent environmental issues in Sri Lanka. Dilmah Conservation is represented at CBD COP 10, Nagoya. Its programmes in the areas of ecosystems rehabilitation and protection, protection of indigenous communities, environmental education, promotion of biodiversity and sustainable agriculture are recognised as a ground breaking initiatives in Sri Lanka. Dilmah Conservation advocates a partnership amongst private sector organisations, consumers, the state, NGOs and the environment. Its Ethical Tea Society is an example of this principle.

4 Comments On business and biodiversity: a view from Nagoya

  1. Angelo Fernando October 28, 2010 at 12:09 am

    This is a very topical –and controversial — topic. Next week, for instance, California has on the ballot a proposition (Proposition 23: http://www.triplepundit.com/tag/prop-23/) that tries to cast sustainability as anti-business. Sponsored by you know who, of course. You raise a great point that though business may often be cast as the ‘problem,’ business can forge the solution.

    I’m going to discuss this in a weekly radio show on sustainability and biz, if you’re interested. http://www.your3bl.com

  2. Bruce October 31, 2010 at 10:54 am

    It is exciting and heartening to see the Foundation spread its efforts to represent a Sri Lankan voice to monitor large corporate’s Conservation budget decision-making process and results by our registering and sending a small team of our own experts to participate in Forums like Nagoya. Such registration is a good thing if only to try to beat some sense into the equation. But it is tough assignment. We’d need every MJF Group – sized small / mid cap family managed firm on earth to participate, even to make the slightest financial dent.

    And it has gotten tricky because the scientific findings of work like the Stern Report is frightening, the scope so huge, mammoth really. That the small / medium family run segment be involved is such a healthy strategy, if only as a monitor on the behavior of the big players. And if history is any guide, they will cry for governmental bailouts. Worse yet, they will get them, thus forcing governments to burden the common taxpayer with tax increases they can ill afford, just trying to make ends meet as it is. And here, big oil once again has re-arranged the macro economic landscape to dodge the full burden of the bio-muckup’s which they have caused – apparently with full forethought and knowledge of the risks involved due to penny-pinching their contractor, Halliburton, by forcing them into a price corner that could not afford anything better than cheap low-grade concrete, all of this picture is just so absurd to me that it’s like watching a real-life version of Monty Python or Firesign Theater, but it’s not humorous at all. The shoddy materials q/c as decided by senior management at big oil who are pay-incentivized on immediate results at de minimus cost to the firm. Management only has their eye on the short-term future, paid by a tax increase or an emergency tax on the working middle class who are struggling to make end meet as it is. And on it goes. With results like Stern estimates of say 12 to 13% decrease in quality of living per annum; that is a frightening statistic when we consider it going five years to a a decade out from now.

    On last evening’s news, Dil, there was a report that the grade of concrete Halliburton had used for the base of the oil platforms was – knowingly – of a poorer, sub-standard quality to shave off a few thousand dollars of cost savings. And that poor quality concrete gave way, ultimately being the basis of the whole BP bio-spill. It’s covered in this report … http://www.halliburtonwatch.org (agreed, a bit over the top but still instructive) … and elsewhere on the more conservative news from the FT and the WSJ. Directing their anger for the responsibility of this fiasco with accuracy, it would appear that Halliburton was only working on instructions from BP. In either event, it’s always the same cabal of huge cap players with stronger free cash flows and balance sheets than most countries on earth. We in tea have been practicing diversity for many decades without being told to do so by anyone but our own knowledge of investment in the long run balance of nature in the areas around our tea fields. It’s small compared to the BP type of big messes, but it’s the best we can do realistically. Maybe Dilmah Comservation’s in SL (and other small / mid size efforts around the world – in tea, that I know of at least in Africa, Argentina and – I believe – in PNG / Australia, too) will speak loudly by our examples. But it is a big hope on our small parts.

    And time – as Stern points out – is of the essence. I don’t know what the solution is, but it may well require some sort of governmental intervention in terms of generous tax benefits to the participating parties, thus stimulating more participation by the huge multinationals involved in tea / coffee ’round the world? They are also participating in the Ethical Partnership, and the Rainbow Alliance as such. But the point is that we tea people should not by rights have to pick up the huge tabs caused by shoddy controls in big oil that result in fiascoes like the recent Gulf spill. It’s been over a half year already, and BP (with participation by contractors like Halliburton) plods slowly along.

    In any event, thanks to your Dad’s vision, and our generation’s follow through in tea, maybe we will make some small noise that other larger industries will start to listen to and begin to participate, as well.

  3. Dilhan October 31, 2010 at 6:30 pm

    Fortunately Angelo, there was progress in Nagoya. The business community has the advantage of efficiency. Applying business methodology to environmental issues is the only way forward. The creative, business response to the problem and success in its mitigation are already evident in the work of several enlightened businesses. As a small, family business we have demonstrated the potential in taking a business approach to humanitarian issues – the work of the MJF Charitable Foundation http://www.mjffoundation.org has been hailed as groundbreaking – it is not though for it is only the application of business methods. evaluation and therefore efficiency – to solving humanitarian problems. We are now doing the same in the area of the environment – but neither we not the hundreds of genuinely committed businesses, are sufficient. The problem is global and it requires a global solution.

    COP10 gives reason for optimism. “We’ve seen history in the making here in Nagoya with a landmark agreement now in place that defines the future for life on earth,” says Julia Marton-Lefèvre, IUCN Director General. “Here in Japan the international community have moved closer to the realisation that it’s time we stopped considering nature as expendable, and any related expenditure a write-off – it’s time we valued and conserved nature.”

  4. Cathy July 23, 2013 at 6:52 am

    Hello Jeno You’ve gotta go try and experience a high tea soon hehe i bet you’ll love it! And even if you can’t find a good high tea place, maybe try caietrng your own? I’ve always wanted to do that, but simply haven’t had the time >_< I'm glad you like my descriptions, I was worried that I was getting too technical! How much i wish wish wish you were here in Melbourne and then I can take you to all the great places for high tea and share so many desserts with you! Hope you had a wonderful Mid Autumn Festival!

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