Italian businesses are proactively accounting for biodiversity loss within their operations, as indicated by the fact that 33% of companies have incorporated this consideration in their financial planning.
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The ongoing COP16 in Cali, Colombia, has seen the spotlight on the pressing issue of biodiversity conservation, with a particular focus on its integration into corporate strategies.
Recently, the European Union approved the Corporate Sustainability Reporting Directive, signalling a shift towards more sustainable business practices. In Italy, this shift is evident, albeit with significant challenges.
A report titled "Biodiversity and the Private Sector in Italy," produced by Etifor, University of Padua, and several other organisations, highlights the growing awareness of biodiversity concerns among Italian companies. These firms increasingly recognise biodiversity as both a risk and an opportunity, reflecting a dual dependence and impact relationship with natural ecosystems.
However, fully embedding biodiversity commitments into business strategies is still evolving and complex. Key challenges include the complexity of biodiversity measurement, cause-effect complexity, non-substitutability, limited market mechanisms, and the need for governance and integration.
Biodiversity lacks universal metrics, making it difficult for companies to set baselines, targets, and meaningful indicators. Companies often use proxies or localised assessments instead of comprehensive metrics. Moreover, biodiversity outcomes depend on wider ecosystem interactions beyond company boundaries, complicating target achievement without broader stakeholder collaboration.
Biodiversity cannot be offset like carbon, and extinct species cannot be replaced, raising the stakes for conservation and restoration efforts but complicating corporate risk mitigation strategies. Markets for biodiversity credits or offsets are underdeveloped compared to carbon markets, limiting private finance options to incentivise conservation.
Developing a business case for biodiversity requires meaningful metrics, embedding biodiversity into corporate decision-making, and shifts in strategy to halt or reverse biodiversity decline.
Despite these challenges, some Italian companies are taking concrete actions, investing in nature-positive initiatives, and working on ESG approaches that include biodiversity as a key element for long-term value creation.
The private sector, according to Alessandro Leonardi, CEO of Etifor, plays a significant role in biodiversity loss, as most companies impact habitats and cause pollution. However, they are also dependent on the ecosystem services provided by nature.
Approximately 4,000 businesses need to undergo a significant transformation process to comply with directives and improve their ESG performance, particularly in the areas of biodiversity and ecosystem protection. Encouragingly, 48% of companies plan to integrate biodiversity impact into their strategies within the next five years.
Currently, 33% of companies already include biodiversity in their reporting, and 25% are currently assessing their impact on biodiversity. Rapid degradation of biodiversity is identified as one of the most significant global nature-related challenges.
The report indicates that the global situation regarding biodiversity is far from reassuring. Habitat destruction, pollution, and resource exploitation threaten ecosystems, economy, and long-term well-being. Activities directly impact essential natural services such as clean water, air, pollination, soil fertility, and climate regulation. Around 4 billion people mainly rely on natural medicines.
In conclusion, biodiversity is increasingly integrated into corporate strategies in Italy but remains in an early to intermediate phase characterised by growing commitments yet significant scientific, operational, and market challenges for effective implementation and impact mitigation. The private sector has a crucial role to play in addressing these challenges to ensure a sustainable future for all.
- The ongoing shift towards more sustainable business practices, as demonstrated by the growing awareness of biodiversity concerns among Italian companies, highlights the importance of scientific research in environmental science for developing universal metrics to measure and manage biodiversity in finance and business.
- As the private sector begins to invest in nature-positive initiatives, it's essential for companies to align their strategies with environmental science to finance and foster sustainable business models that mitigate risks associated with biodiversity loss, and capitalize on opportunities offered by a thriving and resilient environment for long-term value creation.
