The recent Business for Environment Summit focused on biodiversity —that is, the value created for business by natural services provided by intact ecosystems.  While there was a lot of banter from CEOs, the whole event left me wondering if business really ‘got it’.

While rhetoric from the usual suspects like Al Gore and Sir Richard Branson maintained the call to arms, there was a seeming lack of case studies demonstrating progress. With major climate change negotiations still picking up from Copenhagen, I wondered where were the strong business voices.

The United Nations Environment Programme (UNEP) estimates that some 60 per cent of ecosystem services (think food, fibre, clean air and water for example) have been degraded or are not sustainable.

Biodiversity is disappearing at a rate of up to 1000 times the natural rate, and systems are functioning less and less effectively.   They put the economic cost of this degradation at a cost of between US$2 trillion to US$4.5 trillion — and this is expected to rise. While there is much hullabaloo around the recent financial crisis, we cannot afford for businesses not to get this: we depend on our planet for everything we have.  

The disconnect of viewing the environment as something “over there” away from our high-rise, city-centric lifestyle needs to be overcome.   Boardrooms need to get it straight that there is no competition between environment and economic outcomes.  There simply is no economic outcome without environment.  It is that simple.

Think your company and supply chain is somehow devoid of risk in this?  Think again.   Your business is at risk if it:

  • Uses raw materials such as timber, fish, cotton, crops, plants, or any derivatives.

  • Suppliers have significant holdings of land.

  • Has a reliance on supply of clean water for operations or products.

  • Is reliant on natural defences such as mangroves, coral reefs, or coastal marshes to protect infrastructure or land.

  • Customers have a preference for sustainably-produced goods.

  • Investors demand proof of responsible and ethical activities.   Take water for example.  Around 50 countries worldwide face moderate or severe water stress, and many aquifers are becoming depleted or polluted.  It is estimated that by 2030, water scarcity could cut agricultural harvests by up to 30 percent globally.  This comes at the same time as a rise in human population somewhere in the range of 7 billion to 9 billion.  Where will your bottling plant, refinery, intensive agriculture operation, or factory locate under such conditions?

Industry naivety on the issue of biodiversity will come at an enormous cost.  

While disasters like the one BP faces with the Deepwater Horizon incident in the Gulf of Mexico have financial costs in the billions of dollars, the reality is the impact will be far greater, as the destruction multiplies across the region and beyond.     The millions of barrels of oils leaking out spell trouble at a time in human history when energy is at a premium.  It also spells death for biodiversity and the industries associated with it: fishing, shrimping, wildlife watching, tourism, and even some elements of the real estate market— to name but a few.

This one little oil well also could cause contamination of land and water far inland due to the onset of hurricane season.  Some likewise predict that the oil slick could be caught by the Gulf Stream and carried up the entire east coast of the United States before it can be successfully contained.   The full extent of costs will not be fully known for decades to come, and will probably never be fully accounted for.  President Obama has BP on the hook for damages.  I wouldn’t want to be their CEO.

The message to take home: no matter what business you’re in, even one minor incident can have major catastrophic consequences for your business.  Deepwater Horizon is just the latest catastrophe, and it is time for a new definition of business to emerge.  It’s not just a case of being “less bad”, it is more the case of doing “more good”. Businesses will do good to remember that.

This is not alarmism.  This is pragmatism, and about time that businesses worldwide got serious on these issues—if only out of self-interest.  There should be no debate, because no matter how you look at it, there are no jobs on a dead planet.  We are supposed to be the most sophisticated species on the planet, and the time has come to start acting like it.