Biodiversity and the Food and Drink Sector

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Presentation made by Annelisa Grigg, Nature Value Initiative, during the Seminar + Workshop "Preserving Natural Capital - Role and action by food retail sector"

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Biodiversity and the Food and Drink Sector

  1. 1. Biodiversity and the food and drink sector - the business case to act Annelisa Grigg, Project Director, Natural Value Initiative
  2. 2. Overview <ul><li>Definitions </li></ul><ul><li>Trends </li></ul><ul><li>Implications for retailers </li></ul><ul><li>The link to business risk </li></ul><ul><li>Opportunities </li></ul><ul><li>How to respond </li></ul><ul><li>An example </li></ul>
  3. 3. Definitions <ul><li>Biodiversity: “The variability among living organisms which includes diversity at ecosystem, species and genetic levels ” (Convention on Biological Diversity, Article 2) </li></ul><ul><li>Ecosystem: An ecological community together with its environment, functioning as a unit </li></ul><ul><li>Ecosystem services: The benefits that people receive from ecosystems </li></ul><ul><ul><li>Provisioning services e.g. crops, fisheries, timber, genetic resources </li></ul></ul><ul><ul><li>Regulating services e.g. pollination, water quality </li></ul></ul><ul><ul><li>Supporting services e.g. nutrient cycling </li></ul></ul><ul><ul><li>Cultural services </li></ul></ul><ul><li>Many of these services are underpinned by biodiversity </li></ul>
  4. 4. Key trends <ul><li>According to the Millennium Ecosystem Assessment, 60% of ecosystem services are either degraded or in decline </li></ul><ul><li>Rate of species loss in recent decades is 100 - 1,000 times faster than “natural&quot; rate </li></ul><ul><li>Each year BES is lost with at least total economic cost between US$2 - $4.5 trillion in 2008 </li></ul><ul><li>The impacts of this, as with climate change, will be felt most severely by the world’s poorest peoples </li></ul>
  5. 5. An issue on the move… Source: World Economic Forum (2010), adapted by UNEP FI Perceived likelihood Unlikely Very likely Flooding Biodiversity loss Climate change Water security Chronic disease Global governance failures Economic disparity Food security Terrorism Biodiversity loss - 2009 Perceived impact in billions of dollars 50 1000
  6. 6. BES is linked to many major issues Food security Poverty alleviation Water management Climate change Inland flooding Coastal Flooding Chronic disease Water scarcity Migration BIODIVERSITY & ECOSYSTEMS SERVICES Food price volatility Infectious disease Source: WEF (2010)
  7. 7. Implications throughout the value chain Consumers <ul><li>Logistics, site location, fuel sourcing </li></ul><ul><li>Biofuels (habitat conversion, water use) </li></ul><ul><li>Direct negative or positive impacts on biodiversity through location of buildings </li></ul><ul><li>Producers </li></ul><ul><li>Pollination </li></ul><ul><li>Habitat loss </li></ul><ul><li>Water </li></ul><ul><li>Soils </li></ul>Owned farms <ul><li>Processors </li></ul><ul><li>Water </li></ul><ul><li>Supply chain impacts </li></ul><ul><li>Greenhouse gas emissions </li></ul><ul><li>Retailers </li></ul><ul><li>Primarily supply chain issues </li></ul><ul><li>Greater exposure to reputational risk </li></ul><ul><li>Opportunities for new products </li></ul>Legislation/ NGO campaigns
  8. 8. Reputational and market risk           Source: SIX Swiss Stock exchange                      
  9. 9. Regulatory compliance <ul><li>Commercial fishing operations in the European Union have been impacted by tightening quotes on cod, hake, plaice and other species in an effort to curb depletion of wild caught fish stocks </li></ul><ul><li>The EU habitats directive and Natura 2000 network </li></ul><ul><li>Integration of biodiversity into planning legislation </li></ul><ul><li>Growth in concern at a policy level regarding the issue </li></ul>
  10. 10. Financing risk <ul><li>Growth in policy statements, guidance and adherence to performance standards that attempt to safeguard biodiversity and ecosystem services </li></ul><ul><li>Investor focused initiatives e.g. Natural Value Initiative, IFC </li></ul><ul><li>EIRIS, OEKOM, MSCI, Vigeo… growth in integration of biodiversity into ESG research offerings </li></ul><ul><li>Experimentation with biodiversity investment funds e.g. Sumitomo </li></ul>
  11. 11. Operational risk <ul><li>Increasing scarcity of raw materials may lead to a narrowing of margins - 70% of the world’s most productive crops are animal-pollinated. Pollinators globally are in decline </li></ul><ul><li>Increased vulnerability to natural disasters – loss of coastal wetlands made the economic impact of Hurricane Katrina (approximately US$150 billion) significantly higher </li></ul><ul><li>Increased costs of meeting market requirements e.g. certification schemes </li></ul>
  12. 12. Opportunities
  13. 13. How can you respond? Identify impacts and dependencies Assess risks and opportunities Test understanding with stakeholders Take action
  14. 14. What does this look like in practice? <ul><li>Sustainable agriculture – piloting and rolling out standards </li></ul><ul><li>Commodities sourcing (palm oil, soya, beef, leather, coffee) </li></ul><ul><li>Organic food </li></ul><ul><li>Phasing out pesticides and making food residue free, network for suppliers </li></ul><ul><li>Sustainable cotton </li></ul><ul><li>Working with suppliers to improve water efficiency and encourage good water stewardship, initially focusing on key sourcing and water hotspots </li></ul><ul><li>Setting sustainable raw material standards for store construction and equipment. </li></ul>

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