In 2022, biodiversity was put high on the political agenda. World leaders and the private sector came together at COP15, the United Nations’ biennial biodiversity congress. Here, they took steps to assess the extent and rate of biodiversity loss. Now it is time for the next step: implementation and action. Waiting longer will cause irreparable damage. To preserve biodiversity, knowledge and promises must be accelerated into policy and market-driven change.
Concrete policy measures will be discussed at COP16 in late 2024, but many companies are already offering solutions to make supply chains more resilient and sustainable. BNP Paribas foresees a rapid increase in biodiversity impact investments. Especially ‘enablers’, companies that offer solutions to reduce the impact of harmful industries on nature, are in the spotlight. Examples include precision fermentation, which replaces animal products with animal-friendly alternatives. For instance, vegan chicken egg whites are already being produced for commercial purposes, and an alternative for leather has been developed. Enablers also offer outcomes for horticulture, such as vertical farming and RNA biopesticides. They eliminate the need for large-scale use of soil-polluting chemical pesticides in horticulture, preserving important organisms like bees and soil microbes.
But the strongest business cases so far are from enablers with circular economy solutions. A well-known example is Fairphone, a sustainably produced modular smartphone that puts people and planet first. If damaged, the modular design allows the screen or other electrical parts to be replaced quickly and at low cost. At the end of its life, Fairphone has a recycling programme to give your old phone a new life. Companies like Fairphone that integrate circularity into their supply chain are well positioned to exploit commercial opportunities and reduce supply chain risks through dependence on raw materials. For instance, green energy for the reuse of materials is an important pivot between the Energy and Industry sectors. This is a connection that is necessary to now truly approach climate warming and biodiversity loss as the other side of the same coin.
Policy and innovation
This year saw several international meetings where policies for the most vulnerable areas took shape. These included the UN Convention on the High Seas, the International Forum on Forests and the World Biodiversity Summit in New York, where international cooperation agreements were reached to effectively address issues that transcend national borders. In addition, the Global Biodiversity Framework forces governments to review their biodiversity strategy and action plans even before COP16. An important step was also taken in the area of financial reporting with the launch of a framework for measuring nature-related risks. The integration of the Taskforce on Nature-related Financial Disclosures framework into corporate reporting is expected to boost investment in sustainable growth. During Climate Week NYC 2023, BNP Paribas announced a donation to IUCN to support their work. IUCN analyses and addresses the five main types of pressures on nature that affect biodiversity: changes in land and sea water use, direct exploitation of organisms, climate change, pollution and invasive species.
Besides biodiversity loss, the increasing shortage of drinking water also poses a direct threat to global food supplies. Adaptations to climate change to mitigate these risks are becoming increasingly urgent and investments in innovative water management, such as wastewater recycling, need to be scaled up. The need to reuse water is increasing under pressure from stricter regulations. Enablers operating in this field are seeing an explosion in demand for their solutions, offering an opportunity to invest in responsible economic growth.
An intertwined future
The future of biodiversity and water management are closely intertwined. Biodiversity plays a crucial role in regulating the water cycle. The challenges of the 21st century require joint efforts and investments in both conservation and smart water management. A good example is Ahold Delhaize’s targets for reducing food waste in its own operations. Already since 2016, as the initiator of the 10x20x30 Food Loss and Waste Initiative, Ahold-Delhaize has reduced food waste by 33%. In doing so, it has committed to a series of ambitious sustainability performance targets.
Rado Georgiev, strategic sustainability advisor at BNP Paribas Netherlands: “in recent years, we have witnessed floods, landslides, storms and droughts, which are more frequent and severe due to climate change. But water resources are also being affected. This puts basic needs and the humanitarian right to clean drinking water and sanitation under pressure. In the Netherlands too, and even in the most optimistic scenario, summers will become drier and winters wetter due to climate change, according to the new KNMI climate scenarios. These developments require water-intensive industries, such as utilities, chemicals and technology, to adapt. They need to start applying water management strategies and incorporate circularity and preferably nature-based solutions in their climate change plans.”