13.2.2 Importance for companies

The decline in and loss of BES undermines the richness and variety of species. This deterioration also has a great impact on the private sector. Businesses interact directly with BES in two ways: (1) companies depend on BES for the provision of raw materials and regularity of ecosystem services; and (2) they contribute to the change in BES, both negatively due to the impact ofeconomic activities, and positively when they are engaging in pro-biodiversity business.1Reference is made to Figure 12.1 of chapter 12. It is still difficult to quantify the financial link between ecosystem services and companies, hence the EU TEEB studies are working on defining the value of BES.2 Research on business and biodiversity suggests, however, that business profits and a good condition of biodiversity are often correlated.3 The facts suggest that: (i) biologically diverse soils are generally more productive for agriculture; (ii) various tropical forests are the main locations in which to discover novel genes and compounds for agricultural, industrial and pharmaceutical uses; (iii) tourists prefer more diverse ecosystems; and (iv) marine biodiversity is associated with the increased productivity of fisheries. Consequently, independent of a company's business activity - whether it relies on pharmaceutical raw materials for the production of medicine, or produces cat food made of fish - there is a very high chance that it depends in some way or another on the health and resilience of ecosystems and the ecosystem services that they provide. The deterioration and loss of ecosystem services will threaten business opportunities and reduce profits. This can be exemplified by examining the fish industry, which increasingly finds it more difficult to trace schools of certain types of fish like cod due to the fact that there are basically less of them.4 Another example is nature-based tourism. Profit generation in this case depends directly on the health of surrounding ecosystems and their maintenance; without nature, there cannot be any nature-based tourism. Water-based industries also depend on BES. Breweries and soft drink companies, the agricultural sector and energy companies are examples of businesses that depend heavily on a sufficient supply of (clean) water.5 Chapter 11 has explored the theme of companies and water. Presently, depending on the region, 5 to 20 per cent of freshwater use exceeds long-term sustainable supply and 15 to 35 per cent of irrigation is not set up in a sustainable way.6 The impact of water scarcity on water-related businesses will stimulate an increased competition for water supply. In addition, operational costs are anticipated to rise because of the expected extra cost necessary for cleaning water, and cost associated with finding new sources or substitutes. A last example concerns the ice-cream producer Haagen-Dazs. It communicated in 2009 that it is very dependent on bee pollination as pollination is essential for ingredients in nearly 50 per cent of their all-natural super-premium flavours. It started the "Haagen-Dazs Loves Honey Bees" campaign, which provides funding for research, education and outreach, as well as student training. The company's goal is to raise awareness concerning the honey-bee issue so that communities can work together to help conserve the pollinators.

Another factor in the relation between companies and BES is the reputation of a company. The reputation of a company is often influenced by its attitude towards biodiversity and the environment in general. Reputation is important for a company's relations with customers and employees. Every year, billions of euros are spent by businesses on improving their corporate image and "no company can afford to be seen as contributing to the destruction of nature".7Being good for nature can uplift the reputation of a company and put it in a better position.8 Furthermore, as a developing trend, companies which are known for their unsustainable catching or production methods risk being delisted by supermarket chains and boycotted by consumers.9

This chapter will show that companies can be motivated towards conserve nature by yet an additional reason: the possibility of making a profit by investing in BES. Traditionally, companies perceived (the protection of) biodiversity as a barrier or risk that had to be overcome in order to do business. This perception is changing. Whereas the decline in ecosystem services poses risks to corporate performance, it also provides business opportunities now that ecosystem restoration is increasingly being recognised as a new type of economic activity with which financial returns can be obtained. New markets for the goods and services of ecosystems are emerging, among others through the creation of new property rights, such as carbon emission rights and water rights.10

Concluding, from a business perspective there are two reasons why the preservation of BES can become a priority for the private sector. Firstly, the prosperity of companies depends to a certain extent on the continuous existence of BES. Secondly, engaging in pro-biodiversity projects can generate new business opportunities with financial returns. More generally, as awareness concerning BES expands, companies that reduce environmental impacts, improve eco-performance and employ innovative services and strategies will benefit. They will acquire competitive advantage due to reduced costs (e.g. less water use means less cost), less liabilities (e.g. no pollution means no costs for expensive cleaning operations), and they can realise additional benefits from selling innovative services and products (mentioned briefly above but this will be further elaborated on below).11