IPBES Bericht zu Biodiversität und Wirtschaft

While some businesses take actions that are beneficial for biodiversity, there are inadequate or
perverse incentives that perpetuate business-as-usual and create barriers to businesses and others
taking actions that could halt and reverse biodiversity loss as well as address the interconnection with
climate change and pollution. The conditions under which businesses operate vary and do not affect all
sectors or businesses equally. Currently, there are not adequate rewards and penalties to drive
sufficient action by businesses for the conservation and sustainable use of biodiversity and the fair and
equitable sharing of the benefits from the utilization of genetic resources and associated traditional
knowledge. Businesses often do not internalize negative impacts of business actions on biodiversity.
Many policies either encourage business activities harmful to biodiversity or prevent behaviour
beneficial for biodiversity. For example, large subsidies are directed to business activities that drive
loss of biodiversity often with the support of lobbying by businesses and trade associations with vested
interests. In 2023, global public and private finance flows with direct negative impacts on nature were
estimated at $7.3 trillion, including environmentally harmful public subsidies and private investment
in high-impact sectors. Of this total, private finance accounts for around two-thirds ($4.9 trillion).
Public spending on environmentally harmful subsidies is approximately $2.4 trillion. Whereas only
around $220 billion in public and private finance flows in 2023 were directed toward activities that
contribute to the conservation and sustainable use of biodiversity. This highlights both the opportunity
as well as the need to align financial flows to support biodiversity outcomes. Where compliance by
businesses and enforcement efforts are lacking, this undermines the effective implementation of laws
and regulations. Furthermore, because business disclosures are often voluntary and not widespread,
businesses are usually not held accountable. Businesses often lack data and knowledge to quantify
their impacts and dependencies on biodiversity, and much of the relevant scientific literature is not
written for a business audience. Lack of transparency across value chains, including of the risks and
opportunities related to the sustainability of resource extraction, use, reuse and waste management, is a
further barrier to action. In addition, ecological cycles such as ecosystem regeneration, do not align
with time pressures on decision-making and timescales for investment returns and reporting by
businesses - with an emphasis on quarterly earnings.

Background messages: {A1, A2, A3, A5, B7, B13, C8}

The science base for understanding and measuring business impacts and dependencies is already being used to guide business actions. Some businesses already act with existing methods, knowledge and data, and as they are improved, all businesses can take further action. The understanding of how to apply methods for impact assessment is more advanced than for assessments of dependencies. The availability of measurement approaches and underlying data varies by business sector, ecological realm and jurisdiction. The application and uptake of methods is low and uneven across and within business sectors and varies across regions and countries, reflecting differences in data availability and technical capacity. Different knowledge communities offer credible methodologies that can be applied across diverse business contexts, each contributing distinct approaches for addressing impacts and dependencies. There are many aspects of biodiversity and nature’s contributions to people that may be relevant to measuring business impacts and dependencies, including at genetic, species and ecosystem levels and the diverse benefits associated with nature’s contributions to people. Which aspects should be measured depends on context, location and action to be taken or decision to be informed. As a result, a combination of methods or metrics, which may include scientific, Indigenous and local knowledge will often be necessary to fully capture biodiversity and nature’s contributions to people.

Background messages: {A5, B8, C1, C3}

There is no single method suitable for all business decisions (Table SPM.3). Different methods and metrics are needed for different sectors, levels of decision-making and purposes of measurement. Decisions at the operations level require site-specific information. Site-specific information and data generated through bottom-up12 approaches includes location-based observations, participatory monitoring and mapping, and spatial analysis built on these data sources. Such approaches can make use of data and metrics representing local values, knowledge, rights and interests of other groups, including Indigenous Peoples and local communities. Bottom-up approaches can provide greater accuracy at local scales and can show how outcomes change in response to concrete actions or activities on the ground. Cumulative impacts, which arise from aggregated effects of businesses and other actors in a location over time, are better assessed for an area, such as a site, a landscape or seascape, than for a particular business. Top-down methods13 include life cycle approaches and macro-scale environmental economic models appropriate for decisions at the portfolio, corporate and value chain levels. Depending on the purpose of measurement, they can be conducted with lower spatial resolution data but wider geographic scale. Portfolio-level decisions can be guided by globally comparable methods where there is sufficient resolution within sectors (e.g., differentiating based on geography or product type). Corporate-level decisions can be informed by methods that use company-specific information. Value chain-level decisions can make use of life cycle approaches that assess potential impacts of value chains, noting that they are less relevant for assessing dependencies. Top-down methods provide an assessment of potential impacts and dependencies and inform decisions such as screening and comparing options. However, these methods may have limited ability to track progress resulting from specific business actions. Top-down approaches using coarse resolution data often fail to reflect local ecological values and are less able to represent the diverse values of nature, including the values and interests of Indigenous Peoples and local communities. As a result of these weaknesses, an important area for future development of top-down approaches would include higher resolution spatial and temporal data and better interweaving with diverse values of nature for understanding dependencies, impacts, risks and opportunities.

Background messages: {A8, B8, C1, C2, C4, C7}

Methods can be assessed as fit for purpose against three overarching characteristics: coverage, accuracy and responsiveness. Coverage refers to both the geographic scale as well as the extent of impacts and dependencies included. To be fit for purpose, a method or combinations of methods need to cover the impacts and dependencies relevant to the activities of a business at the relevant geographic scale. Accuracy is the degree to which the results correctly describe what they are designed to measure. The accuracy necessary to be considered fit for purpose varies by both level of decision- making and purpose of measurement. Responsiveness refers to the ability of the method to detect changes that can be attributed to the actions and activities of the business. To be fit for purpose, a method needs to clearly link changes in biodiversity and nature’s contributions to people to specific interventions. Current available methods do not always satisfy these three criteria for all business applications. Where methods do not meet the necessary requirements, they may not be entirely fit for purpose. However, they may still produce useful information on which businesses can act. These limitations need to be understood by businesses. In addition, methods require different levels of expertise, resources and costs with particular challenges for small and medium enterprises. While recognizing constraints, businesses can start using methods and improve their capabilities over time.

Background messages: {C1, C2, C4}

Businesses can act now based on existing knowledge, however, limitations remain in the current knowledge base and guidance. Limited quantitative, standardized and comparable estimates of impacts from different businesses constrain the ability of all actors to fully understand and effectively manage business activities. This limitation further prevents financial institutions from choosing investments that minimize negative impacts or maximize positive impacts. Context, scale and sector needs differ and there is a need to develop and disseminate consistent methodological approaches that produce accurate results, particularly for decision-making contexts where the ability to compare or aggregate across sites, value chains or businesses is important. Existing methods have not yet produced a comprehensive and comparable attribution of impacts across all sectors or businesses. The ability of assessments to inform action is hampered by their limited integration into business accounts and processes. Clear gaps in knowledge and its application exist around: a) business-relevant data; b) data accessibility and transparency; c) completeness of evidence; d) adoption of methods; and e) applicability of methods. Addressing these gaps would contribute to significant improvements in the ability of businesses to measure their impacts and dependencies with implications for their understanding of risks and opportunities. Better understanding could help accelerate actions that benefit both businesses and biodiversity. Priority actions to address gaps can include: (a) Facilitating greater uptake of existing methods and knowledge by businesses and integration into business accounting and management systems; (b) Collecting and sharing comparable information, including through disclosure mechanisms, on the activities and locations of businesses, their operations and value chains. (c) Providing scenarios that support assessment of performance against agreed goals and targets; (d) context and needs; Providing actionable guidance for businesses to select methods appropriate for their (e) Co-creating actions based on methods and knowledge built with participatory approaches involving Indigenous Peoples and local communities. Information that is easily understandable, standardised, transparent, interoperable, practical and actionable provides the foundation on which businesses and financial institutions can choose actions that are beneficial for biodiversity and society. Turning disclosure and awareness into informed action across the whole of society requires specific, context-dependent knowledge about business impacts and dependencies on biodiversity and nature’s contributions to people. In the case of dependencies, mandatory or voluntary disclosure could support scientific advances to accurately measure non- material and regulating nature’s contributions to people, which are currently under-represented in tools and approaches. Examples include recreation, learning and inspiration, supporting identities, regulation of pollutants, climate regulation and pollination.

Background messages: {A5, A7, B5, B6, B13, C3, C4, C5, C6, C7, C8}

Under current conditions, what is profitable for businesses often results in loss of biodiversity and what is good for biodiversity and society is often not profitable. Businesses are motivated to focus on financial materiality to deliver short-term objectives and profitability. This undermines their ability to take actions that address long-term outcomes with system-level implications. To address this problem, efforts have been made to require businesses to consider not only what is financially material but also what is material for biodiversity and society. While this can encourage businesses and financial institutions to consider multiple dimensions when taking decisions, it perpetuates a system built on the idea of trade-offs between profitability and biodiversity. Creation of an enabling environment that provides incentives for the conservation and sustainable use of biodiversity and nature’s contributions to people could align what is profitable with what is good for biodiversity and society. Creating this enabling environment would result in businesses and financial institutions being positive agents of change in transforming to a just and sustainable economic system, by addressing their impacts on biodiversity loss, climate change and pollution, which are all interconnected.

Background messages: {A5, A7, B5, B6, B13, C3, C4, C5, C6, C7, C8}