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Asian Companies Must Reckon With Their Impact on the Natural World

Jenni Black is nature transformation lead at the World Benchmarking Alliance, an organization assessing companies on their contributions to U.N. Sustainable Development Goals. Pallavi Kalita is Asia lead at Business for Nature, a coalition campaigning for corporate action on biodiversity.

A year after the conclusion of the U.N. Biodiversity Conference in Montreal, it is clear that business is not doing its part to advance the targets set then by world leaders of protecting 30% of the planet’s land and seas and restoring 30% of degraded ecosystems by 2030. 

New research from the World Benchmarking Alliance (WBA) shows that the vast majority of businesses are not yet mitigating against the financial or environmental risks of a breakdown of the natural world.

Among the 350 most influential food and agriculture companies, just 6% have set time-bound targets to eliminate deforestation in their supply chains. Further, only 15% have publicly committed to halt the conversion of wild landscapes into farmland.

All businesses rely on nature for water, food, textiles, minerals, crop pollination and climate regulation, both within their own operations and throughout their supply chains. Their employees and customers are likewise dependent on the natural world.

Business will be able to thrive in the future only if nature thrives too. Corporate leaders cannot ignore the fact that the global economy and the ability of companies to keep making profits depend on the preservation of the natural world. Yet WBA research shows that only 1% of companies assessed understand their dependence on nature and its services.

According to a report from Singapore investment fund Temasek, the World Economic Forum and Singapore consultancy AlphaBeta, investments in 59 nature-positive business opportunities in the Asia-Pacific region could generate $4.3 trillion and 232 million jobs annually by 2030. 

Some 54% of Asia-Pacific gross domestic product is moderately or highly dependent on nature, the report found. Beyond that, due to the region’s unique geographic, historic and demographic context, Asia is more exposed to the potential collapse of the natural world than most regions.

For a start, Asia is home to 99 of the 100 world cities most at risk from environmental challenges. Jakarta, a case in point, is the most environmentally vulnerable city on Earth. Due to the depletion of its underground aquifers, it is the world’s fastest-sinking city. 

If global business does not rebalance its relationship with the natural world, Asian cities’ very future will be in jeopardy. For companies based in and operating in these cities, the impact would potentially be severe.

Of the 350 global food and agriculture companies that the WBA examined, just eight are assessing or disclosing their impact on nature. Six of these are headquartered in the Asia-Pacific region, including four in Thailand, probably due to the country’s progressive legislation in this area.

The Asian group comprises: the Charoen Pokphand Group, Meiji Holdings, Mitr Phol Group, Olam International, Thai Beverage and Thai Union Group.

A shrimp peeling line at a Thai Union plant outside Bangkok: The company one of the few Asia-based food and agriculture businesses that assess or disclose their impact on nature.    © Reuters

Thai Union uses the Integrated Biodiversity Assessment Tool database and the World Wildlife Fund’s Biodiversity Risk Filter to assess the impact of its operations and publishes a biodiversity exposure report.

Charoen Pokphand, meanwhile, is regularly reporting its progress against a target for reducing water withdrawal by disclosing how much water is used up in its own operations in water-stressed areas. The group has also pledged to avoid or reduce use of hazardous substances to further protect health.

The good news is that such examples show that change is possible and can be facilitated by external pressure. Singapore-based agribusiness Wilmar International, for example, has committed to zero deforestation in response to public pressure around its palm oil production.

All companies can and should put in place a nature strategy, a road map for how they will contribute to a nature-positive world and ensure their operations work in harmony with the ecosystems on which we all depend.

The starting point should be an assessment of all material impacts and dependencies across a company’s production and consumption value chain, from the extraction of raw materials to post-consumer waste disposal.

Disclosure of the assessment results will allow the business and its investors and other stakeholders to identify key areas for action, set targets and monitor progress. Potential impacts on the climate crisis and on people — both employees and the communities in which businesses operate — should be assessed too. All this information can help ensure businesses are better managed both now and in the long term.

Wielding unparalleled global power and influence, multinational companies are uniquely placed to lead the transition to a greener and better world. As we hurtle toward irreversible natural tipping points — such as the loss of the world’s rainforests or the extinction of bees — companies must make urgent and transformative changes to the way they do business.

This could set off a global ripple effect and stimulate wider action to protect and restore nature. The reality is that this chance will not come again.

Source : Asia Nikkei