Businesses that try to come clean about their impact on nature can end up concealing more than they reveal

Humans have significantly impacted biodiversity through overfishing, deforestation, pollution, and climate change due to fossil fuel consumption. This has led to a decline in global populations of various species and a shift in land and freshwater use towards agriculture. The economic value tied to nature and its services is substantial, with businesses and finance being highly dependent on these ecosystems. Corporate biodiversity disclosures have been proposed as a solution to address the drivers of biodiversity loss. The efficient market hypothesis suggests that transparent information about a company s impact on biodiversity could steer investments away from high-risk businesses. However, research indicates that most businesses do not view biodiversity loss as a material risk, and voluntary disclosures are often inadequate and lack universal guidelines. The 2022 global agreement on biodiversity loss called for increased disclosures, but it did not emphasize comprehensive and accurate reporting. Current standards and frameworks tend to prioritize short-term financial interests over long-term biodiversity conservation. Selective reporting and ambiguous disclosures can create the illusion of progress while masking the true impact on biodiversity. To ensure meaningful progress, mandatory disclosures with penalties for non-compliance are needed. These should require businesses to measure, set targets, and report on their progress across their entire value chain. Scientists should help create and refine reporting rules based on scientific evidence, while policymakers and regulators enforce these rules to ensure that disclosures are effective in conserving nature. In summary, addressing biodiversity loss requires a shift in how businesses engage with nature. Mandatory and comprehensive disclosures, guided by scientific evidence and enforced by policymakers, are crucial for ensuring that businesses contribute to biodiversity conservation and restoration.

Source: theconversation.com
Published on 2024-09-20