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Biodiversity: Episode 1

How can markets price the absence of birdsong? How much are people willing to pay to maintain the existence of, or be compensated for, the loss of biodiversity in all its forms?1

The importance of biodiversity is hard to overstate. At its most simplistic, the term refers to genetic variation, as well as variation across species and the ecosystem at large. Biodiversity thus relates to all life on Earth. We, as humans, are utterly dependent upon it for our survival.

And it is against this backdrop that the rate of biodiversity loss is so alarming. From 1970-2016, mammal, bird, amphibian, reptile and fish population sizes shrank by – on average – 68%2. In the decade to come, reversing this downward trend will prove critical.

In the first episode from our six-part series, we look to define biodiversity and establish its importance in a business, as well as a humanitarian, context.

It is a point that Dr Emma Berntman – who works within our stewardship team, EOS at Federated Hermes (EOS) – wastes no time in addressing.

‘Some estimates place the value of ecosystem services and natural capital at between $125 and $145tn per annum’, Berntman says, ‘But when you think about it, all life on Earth and all businesses, to varying degrees, are dependent on the common goods provided by nature.’

According to Berntman, biodiversity has been rising up the corporate agenda in recent years owing to a definitive shift in consumer preferences, the ever-changing policy landscape and, most recently, the Covid-19 pandemic.

‘New infectious diseases often emerge as a result of pathogens moving from animal hosts to human hosts… The exploitation of wildlife through trade, hunting and habitat destruction increase the likelihood of viruses moving from animals to humans.’

Guest speaker, Gillian Rutherford-Liske – Head of Reinsurance Sustainability at Swiss Re – is also keen to stress that biodiversity loss does not exist in isolation.

‘What's needed right now is systems thinking’3, Rutherford-Liske says, drawing attention to the relationship between biodiversity loss and climate change, as well as the need for countries to invest in solutions that restore nature.

‘One example that I like to use is Louisiana, this very low-lying area of land on the southern coast of the US that is heavily impacted by floods and storms… if the state of Louisiana would invest more in nature-based solutions – in restoring some of the swamp areas – they could reduce their expected flood costs by $5.3bn annually’.

  1. 1University of Exeter, ‘Project to examine ‘price of birdsong’, (2019)
  2. 2World Wide Fund for Nature (WWF), Living Planet Report, (2020)
  3. 3Systems thinking is a way of exploring and developing effective action by looking at connected wholes rather than separate parts.

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