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New report by Fauna & Flora International’s Natural Value Initiative shows that companies in the extractive sector are starting to think about their impact on biodiversity, but more needs to be done
It’s no secret that the world’s natural environment is coming under increasing pressure from human development. We have long understood that extractive companies leave deep footprints on the planet, and the Gulf of Mexico oil spill in 2010 gave us a dramatic demonstration of just how deep those footprints can be.
As natural resources become scarcer, many companies are facing reputational, operational and financing risks associated with the decline of biodiversity and ecosystem services – the benefits society receives from nature – together referred to here as ‘BES’.
Companies’ dependence and impact on BES has already begun to affect value, albeit in ways that most investors do not necessarily recognise as such (more familiar are terms like ‘escalating environmental remediation costs’, ‘tight water supplies’ or ‘the end of easy oil’).
To help investors understand these risks more fully, the Natural Value Initiative (NVI) has launched a report titled Tread lightly: Biodiversity and ecosystem services risk and opportunity management within the extractive industry.
The report looks at how effectively oil, gas and mining companies are currently assessing and managing BES risks and opportunities, highlighting the best performers and those lagging behind.
The authors set out recommendations for governments, investors and extractive companies on how to minimise risk exposure and capitalise on the opportunities arising from good BES management.
The report also provides a handy overview of what ‘best practice’ entails, and how companies can begin implementing a strong BES management strategy.
The Tread lightly report was produced in collaboration with several investors that collectively represent £787 billion (approximately Euro 913 billion, US$ 1,223 billion) of assets under management. These investors are now using the report findings to talk to companies about their approach to BES.
Each participating company has also received a summary of their results with specific recommendations for actions.
The Natural Value Initiative (NVI) is a collaboration between Fauna & Flora International, the United Nations Environment Programme Finance Initiative (UNEP FI), Nyenrode Business University and the Dutch Association of Investors for Sustainable Development (VBDO).
NVI aims to:
Download Tread lightly (full report) (low resolution PDF – 5MB)