Companies could be doing more to protect biodiversity, according to research released Friday by Impax Asset Management and researchers from Imperial College London, which also calls for more government regulation and incentives.
The report, Protecting biodiversity: incentives for corporate action, notes that while biodiversity has "risen up the agenda" for companies and investors, there isn't much information about how companies address both the risks and opportunities, or consensus on the best way to do so.
The current scale of corporate action to protect biodiversity "is limited," the report said.
Impax provided input to academics at Imperial College Business School's Centre for Climate Finance & Investment for the report.
Five case studies in the report cover companies investing in activities that protect nature to reduce risks and generate commercial benefits, such as supply chain resilience, cost reductions, revenue creation and commercial advantage.
The companies cover a range of sectors, regions and motivations, from a tree planting project in Madagascar and new building standards in the U.K. property sector to pollinator biodiversity efforts in the European energy sector and forest land purchases to protect a U.S. reservoir.
Supply chain security was a primary driver for companies in agriculture and water sectors, while regulation was a key driver in the energy sector, said Alex Köberle, a research fellow at the center.
"One surprising outcome" from the case studies was that consumer preferences were not a major motivating factor, despite expectations that biodiversity-supportive practices might yield reputational benefits or higher product prices, he said in a release on the report.
The report's three main conclusions were that companies need to do a better job of reporting and sharing information on biodiversity, including their dependencies and impacts; further research is needed into how private investments can be leveraged; and governments can provide regulatory frameworks and incentives.
Julie Gorte, senior vice president for sustainable investment at Impax, said that accurately valuing nature is challenging for the private sector, but policymakers are increasingly recognizing the risks.
"This research shows that corporations must rapidly evolve their practices to protect biodiversity and embrace the benefits that investments in natural capital can deliver," Ms. Gorte said in the release.
