Business and Biodiversity seminar, Helsinki 23rd May 2024
The new EU Corporate Sustainability Reporting Directive (CSRD) is putting pressure on companies to disclose information on a range of ESG topics, including biodiversity. At the same time companies are also realizing that their business is very much dependent on natural resources and ecosystem services. Furthermore, there are also new business opportunities for the forerunner companies through consumer preferences and access to green finance.
The Project Adviser Claire Kwiatkowski from the European Research Executive Agency (REA) opened the seminar with great initiatives that have started from the need to support biodiversity on the corporate level. The President and CEO of Natural Resources Institute Johanna Buchert welcomed the seminar guests with a short presentation of research related to bioeconomy in Luke.
Keynote lectures
The Business and Biodiversity seminar started with two keynote lectures:
Integrating biodiversity and economy, Juha Siikamäki, Chief Economist, International Union for Conservation of Nature (IUCN)
Accelerating the nature positive transition: valuation and measurement as drivers of systemic change, Lasse Miettinen Director, Sustainability solutions, The Finnish Innovation Fund (SITRA)
The message was clear. We need to start assessing the natural capital and understand our impacts and dependencies on nature simply because you can’t manage what you don’t measure!
Keynote from IUCN: Nature provides ecosystem services for economy and society, but we need to understand and measure the impacts of economy on nature so that we do not over consume the natural capital.
Biodiversity initiatives within the CircHive consortium
After the keynote lectures, CircHive advisory board member ECBF and case-study partners presented biodiversity initiatives within their organizations:
Cornelia Frentz, Director Governance and Sustainable Investing, European Circular Bioeconomy Fund (ECBF)
Frédéric Lecoq, Global CSR VP, Lacoste
Francesco Razza, Sustainability Manager, Novamont
Manuela Hurmuz, Sustainable Finance Risk Expert, Raiffeisen Bank International (RBI)
European Circular Bioeconomy Fund (ECBF)
ECBF invests in innovative, bio-based ventures in Europe following the circular bioeconomy principles: avoid, reduce, valorize, recycle – and use renewable, bio-based materials. Positive environmental contribution of the fund is made measurable with climate change mitigation indicators. ECBF is following CircHive’s work to develop biodiversity indicators. However, they are already paying attention whether a company, they consider for investment, has sites/operations located in or near biodiversity-sensitive areas.
Lacoste
Lacoste brand is 90 years old. Their most famous product is the timeless polo shirt. Since the beginning Lacoste has invested in innovation, long-lasting quality products and durable elegance, which is worth to repair and/or sell second hand. In addition, Lacoste is now paying more attention to more sustainably produced cotton. They are participating CircHive to better understand their impacts on biodiversity and to measure it.
Novamont
Novamont develops and produces biochemicals and bioproducts. Their business model integrates chemistry with agriculture. One of their products is a biodegradable mulch film. It can be left in the soil after use, where it is converted by microorganisms into carbon dioxide, water, and biomass, thus avoiding the production of plastic waste or microplastic pollution. Novamont is joining CircHive to learn how to assess and manage the impacts of their products on biodiversity along the value chain including the user phase.
Raiffeisen Bank International (RBI)
RBI is a leading sustainable financial institution in Austria and Central and Eastern Europe. They understand sustainability to mean responsible corporate activities for a long-term, economically positive result in consideration of key societal and environmental aspects. This is reflected in a dedicated ESG risk management. RBI is committed to promoting environmentally friendly technologies and to further strengthening their focus on renewable energy. RBI has identified the following tools to assess their impacts and dependencies: Encore tool for initial screening of dependency and impact drivers and identifying high-risk industries and key biodiversity indicators, and LCA-based methods to do a more detailed assessment of the environmental impacts. RBI is joining CircHive to learn more about suitable methods for a bank to assess the biodiversity impacts.
Panel discussion
Moderator: Diana Tuomasjukka, Head of Bioeconomy Programme, European Forest Institute
Panel speakers: Lasse Miettinen, Sitra; Cornelia Frentz, ECBF; Frédéric Lecoq, Lacoste; Francesco Razza, Novamont; Manuela Hurmuz, RBI
Each organization was asked the same three questions, and then had the opportunity to reflect and discuss in the panel discussion on the topic of biodiversity initiatives and business to dig deeper and connect across their sectors. Also the audience had the opportunity to ask questions.
Q1: What opportunities do you see regarding more biodiversity-conscious business operations?
Embracing biodiversity in business operations opens the door to sustainable innovation, but it also puts more demand on new solutions. Novamont and Lacoste emphasized the process change: developing circular bio-based products and items with longer lifespans, as well as exploring alternative feedstocks and renewable energy sources.
For investors, the nature-based solutions offer environmentally friendly and economically profitable options. However, achieving these opportunities will require a regulatory push to ensure widespread adoption and suitable compliance. Financing institutions can also support business model improvement by focusing on key performance indicators in long-term competitiveness of their customers.
Sitra’s representative highlighted role of examples of how win-win benefits both for business and public actors can be created; for example, wetlands can be defined as infrastructure benefits for climate change mitigation, and conservation/restoration measures can create positive revenue streams.
Q2: Which gaps or barriers to investment and / or redefining business approaches / operations do you encounter?
Overall, the quality of data, as well as coverage of data and availability of tools, is an issue. In financing sector, it is important to speak the same language as the companies, i.e., translate what biodiversity means for companies, from all sizes and all parts of Europe. In addition, investors need clearer demonstrations of biodiversity-supporting solutions and their profitability. If prices of biodiversity-positive solutions are higher than conventional solutions, e.g. pesticides, then there is a need for a regulatory push to support the transition.
“Are we trying to assess new business models with old metrics?” wondered Lacoste and Novamont panelists. Biodiversity can be defined as an opportunity in the company’s materiality assessment, also having a geographical dimension, i.e., opportunity for regions to develop their competences, industries, as well as solutions, such as the infrastructure benefits already mentioned in the above question. Circular bioeconomy solutions evolve parallel to the development of EU Taxonomy, or for example, waste regulations – a challenge for ‘old’ and ‘new’ industries.
Q3: Biodiversity is, after fair trade, sustainability, and carbon, an emerging area of concern and attention, particularly from customers, investors and producers’ point of view. What is the next big thing to pay attention to for corporate practices, in your opinion?
Panelists highlighted proactive management and systemic thinking for several dimensions:
Stronger focus on the “S” in ESG (Environmental, Social, and Governance) aspects;
Recognition of the quantities of products put into the markets, and consequently, shifting focus on circularity, new fibres and maintenance;
Integration of AI as a process efficiency tool with sustainability assessments and nature-based businesses;
Mindset change of how companies and investors interact with customers and engage with their processes;
Simplicity to cut down complexity for customers and consumers, i.e., climate change, biodiversity, natural resources are all part of the same equation (regenerative economy, which tackles nature as a holistic entity).
Question from the audience: How can avoided impacts be more visible?
To make environmental impacts more visible, robust methodologies are needed to present and compare them with substitute product scenarios. Also, new key performance criteria are needed for circular business models. For example, establishing common end-of-waste criteria will help to make the benefits of biodiversity-conscious operations clearer to stakeholders. This also necessitates regulations/standards for bio-based materials, which still doesn’t mean “sustainable”.
Innovation and systemic thinking needed!
In summary, the panel reflected on the opportunities and challenges in integrating biodiversity into business practices from an investor and business point of view. The panel emphasized the need for innovation, enabling regulatory support, and a shift in mindset towards sustainability.
Panel speakers discussed the opportunities and barriers of the more biodiversity-conscious business operations.