Biodiversity is a hot topic right now. The UN Biodiversity Conference ("COP 15") and the Kunming-Montreal Global Biodiversity Framework put biodiversity on the global stage last December. Now, the Taskforce on Nature-related Financial Disclosures is set to shake up the corporate world, with a framework to disclose nature-related risks and opportunities.
More fundamentally, these global agreements and disclosure tools reflect something that is increasingly clear to many of us – nature is being stretched to its limits by humans. If ever there was a time to consider how to minimize our impacts and safeguard the natural world, it is now.
However, "biodiversity," species at risk and habitat protection seem, at first blush, to be the purview of governments, park rangers and environmental charities. How are boards and companies expected to manage the risks of biodiversity loss?
A recent article in the Institute of Corporate Directors' Director Journal begins to explore just that. In it, Liane Langstaff, an environmental lawyer in Gowling WLG's Toronto office, highlights how corporations are increasingly adopting a more holistic approach to the management of biodiversity risk – not only within their own operations but also throughout their entire supply chains.
As Langstaff shares, the legal landscape is changing and so is the approach of many organizations:
"Up until now, we've been looking at biodiversity on a project-by-project basis…And what we're seeing now is greater attention to strategic biodiversity risk, and not just on a project-by-project basis, and not just in those typical sectors. So, I think this is where Canadian business is going. We're starting to look at material biodiversity impacts and dependencies on other sectors that we wouldn't have typically considered in the past."
For example, construction companies look at where they purchase wood, battery businesses consider where their minerals come from, and food and beverage producers check if their palm oil is causing deforestation.
There is good reason to ask these questions, as Langstaff expects the next frontier of biodiversity litigation to focus on business supply chains.
Ultimately, we are seeing shifting tides. After COP15, Langstaff noticed a greater emphasis on biodiversity enhancement versus preservation:
"We've always focused on, 'thou shalt not kill' a species but I think the next stage is a recognition that we've lost a lot of species and habitats already, so what are you doing as a business to restore, to be a good corporate steward, but also, to think strategically so that you are furthering the ecosystem services you need for your business?"
For more insights, see Prasanthi Vasanthakumar's article in the Institute of Corporate Directors, Director Journal, July-August 2023.