Protecting biodiversity vital for future economic success

Protecting biodiversity and introducing new frameworks to incorporate the value of nature into decision making will be vital to safeguard long-term economic growth, according to a new report by the Aldersgate Group, a coalition of businesses, NGOs and MPs.

The report, entitled “Pricing the Priceless” launched at the Global Business of Biodiversity Symposium, conservatively estimates that the failure to address biodiversity loss will lead to cumulative losses that will be equivalent to around 7% of global consumption by 2050.

It recommends by the end of this Parliament, the Chancellor should present a draft natural capital budget alongside the fiscal budget. The fiscal budget takes an overview of the health of the UK economy, for example whether levels of borrowing are sustainable. Similarly, the natural capital budget should describe the health of the UK’s environment and its ability to support economic activity and quality of life in our society.

The report also urges businesses to take the lead by assessing their impacts and dependency on biodiversity and integrate measures to ensure the sustainable use of natural resources.

Peter Young, Chairman of the Aldersgate Group and member of the Government’s Ecosystem Markets Taskforce, said: “The protection of biodiversity must be a priority as we seek to build a stronger, more resilient economy. Preserving and replenishing services provided by nature will provide business opportunities now and huge economic benefits in the future.”

“The natural capital assets that lay the foundations for our economy and society should not be off-balance sheet items similar to the risk exposures and subsequent heavy losses incurred in the banking sector. We cannot rob future generations of nature’s riches which we have mortgaged or depleted.”

The report argues that the loss of biodiversity reduces the ability of the environment to provide the goods and services that nature provides for free, such as clean air, water and soils, as well as the raw materials that industry depends upon.

Photo courtesy Mauritz

Ian Dickie, Aldersgate Group Director leading on Biodiversity and Ecosystem Services, said: “The key role that natural environment resources play in the global economy can be seen in the origins of the present global economic downturn. It is often forgotten that the financial crisis was preceded by a credit crunch, which in turn was triggered by a ‘resource crunch’ in which prices of materials derived from nature spiked. For example, sharp increases in food prices destabilised global markets.

“Mismanagement of our natural environment makes such problems more likely in the future, but these risks can be reduced through commercial practices and government policies that aim to sustain the broad range of values we gain from biodiversity.”

Photo: Terrie Schweitzer

The report recommends that the value of biodiversity must be reflected in prices and policy appraisal. Even though biodiversity is complex to measure, tools are available to help reflect the value of biodiversity in company decisions and in national accounts.

The report also identifies how some companies are taking the lead to manage biodiversity impacts, such as M&S, PepsiCo, Willmott Dixon, InterfaceFlor, Puma and The Co-operative.

Following the launch of the Ecosystem Markets Taskforce, it also finds that regulation can create new business opportunities that the UK should seek to exploit. These include ecologically branded products and new growth markets such as eco-tourism.

At the launch event of the Ecosystem Markets Taskforce, Ian Cheshire, Chief Executive of Kingfisher plc, said: “The challenge of the Task Force, as I see it, is to find new ways for business to profit from valuing nature. It is an opportunity for business to contribute and make recommendations to the Government and shape the agenda. We need to be radical and innovative in our thinking and explore areas where businesses can gain real, measurable benefit as the UK moves to a green economy.”

Caroline Spelman, Secretary of State for Defra, said that The Ecosystem Markets Task Force “will hep UK businesses get ahead of the curve and help us grow our economy more sustainably. I look forward to engaging with them on the business opportunities there will be for greener businesses and I look forward to reading their analyses.”

Photo courtesy Blathlean