It is now well established that biodiversity conservation is facing a significant global challenge. The loss of native plant, fungal and animal species distributed across the planet, and their habitats, is pronounced and growing.
Addressing this is imperative if the future of one species – humans – is also to be guaranteed. This risk is being compounded by the acceleration of climate change that is augmenting ecosystem loss.
Biodiversity as a concept
Species diversity is fostered within natural habitats that possess the structural integrity to be self-sufficient. They also function within a highly specific environment that has underpinned their evolution.
Resilient habitats mitigate the worst impacts on their indigenous species from external shocks such as heat stress, floods, dehydration, or invasion by alien plant or animal species. And they facilitate the recovery of the species affected.
Biological diversity has many dimensions. It acknowledges the intricate interactions within ecosystems that occur between species and their communities, or between the gene pools of individual organisms. Which is why it has been described as the ”web of life” .
Threats to sensitive ecosystems have increased over recent years. Causes include stressors such as destructive or poorly managed land clearing to underpin the spread of urbanisation or agriculture; or the removal of native forests for trees to be sold as a commercial commodity.
Each threatens the survival of unique plants and animals. They also fragment or destroy their highly specific habitats that could eventually foster their recovery.
In response, wildlife conservation and enhancement measures were introduced in many countries following ratification of the UN Convention on Biodiversity (CBD) in 1993. But the responses have generally been regarded as inadequate. The UN global assessment “Report on Biodiversity and Ecosystem Services” (IPBES), published in 2019, outlined how the diminishing global biological diversity presages the loss of a further 1-million species over the coming decades.
This creates a moral hazard that challenges a wide range of social and economic services that rely on stable ecosystems for their performance, and particularly the security of terrestrial food production and commercial seafood harvesting. In addition, the natural buffering processes provided by wetlands and forests against extreme storms and floods will fail unless unsustainable development and global warming are not contained.
Recognition that the consequential economic cost of not conserving nature will be catastrophic, led to the wide acceptance of the UN Kunming-Montreal Global Biodiversity Framework in December 2022 (KMGBF). This outlined goals for protecting biological diversity in the context of the emerging threats, with certain targets to be achieved globally by 2030.
Immediate implications for business
The normal operations of many businesses can create circumstances that potentially degrade, or even destroy, ecosystems in their vicinity. Potentially hostile commercial activities include forestry, agriculture, mining and unsustainable urban property development.
The global finance industry has been developing protocols for optimising investments in activities that may minimise economic loss from wildlife destruction. This is creating an impetus for organisations seeking investment capital to understand the implications of their interface with sensitive ecosystems, and then disclose them in accordance with internationally agreed reporting frameworks.
In September 2023, the Taskforce on Nature-related Financial Disclosures (TNFD) published comprehensive international guidelines for reporting on biodiversity impacts. These provide a benchmark for disclosures by the finance sector and the businesses around the globe with which it interacts.
Australian firms that operate within the value chain of large international investors can therefore increasingly expect to be requested to report on how they manage their impacts on the natural world.
This is particularly the case for exporters to the EU, which passed The Nature Restoration Law on 17 June 2024 to help remediate the 81% of the region’s habitats that are classed as being in poor health. EU Member States are required to lodge their plans for its implementation with the European Commission by mid 2026.
Notwithstanding, progress at the global level has been limited. 23,000 people met in Columbia late in 2024, primarily to develop arrangements for increasing funding for wildlife conservation. But they also confirmed that protection is required for a further 16.7 million sq.km of land, and 78 million sq.km of marine and coastal areas, to comply with the 2030 KMGBF targets (WRI, 28 February 2025).
The Middle Way can help Australian firms :
- understand their exposure to vulnerable habitats and ecosystems;
- disclose their potential impacts and dependencies on native fauna and flora within the area of influence of their operations; and
- prepare plans showing how they will implement effective remediation and conservation measures, and communicate these to stakeholders in both their upstream and downstream supply chains.