Some time ago I have been asked by Divya Narain if I could contribute an article to the latest issue on business and biodiversity of “SQ — raising the sustainability quotient” –the bulletin of the Bombay Chamber of Commerce and Industry.
I suggested to write something about the business case for biodiversity offsets (including some extracts from my PhD). I am happy to announce that SQ is now available online (open access). You can download the full version directly on the website of the Bombay Chamber of Commerce and Industry and find the abstract to my article below.
Abstract
Biodiverstiy loss is one of the biggest challenges that we are facing. Therefore, actions need to be taken to halt this global loss urgently and immediately. One such tool, Biodiversity Offsets is gaining wide acceptance around the world. To put simply, the negative impacts of business operations on biodiversity need to be compensated or counterbalanced by conservation or restoration measures in order to ensure there is ‘No Net Loss’ of biodiversity.
An important question that has become a cornerstone of the discourse on biodiversity offsets is – Is there a business case for biodiversity offsets i.e. does it make good business sense for companies to offset their biodiversity impact?
In general terms, there are two types of motivations for business to adopt biodiversity offsets, which align with the values assigned to biodiversity by humans: 1. Ethical value: altruistic motivation for the implementation of biodiversity offsets. 2. Value of benefit: improvement in business and enhancement of profit. The view that the business case of biodiversity offsets is based mostly on the weighing of costs and benefits that they offer to businesses could be an oversimplification. It does not provide room for the various possible types of involvement of other stakeholders such as government, investors, industry sector as a whole. Therefore, we might conclude that the business case is not one ‘case’ with strictly defined conditions and particularities but instead covers a whole variety of different cases or types of biodiversity offsets.
A very good discussion of the demand side of offsets. In my view, offsets should be a mandatory part of all development planning regimes. While there are many motives for businesses to voluntarily seek to acquire offset sites, mandatory participation would ensure the greatest demand for offset sites — both by area and by environmental characteristics — and thereby contribute to the realisation of the greatest environmental benefits. But this assumes the right types of land are available in the right locations to provide offset sites, and the greater the demand for offset sites, the less certain it is that such sites will be available.
In order to ensure the provision and ongoing management of appropriate areas and types of offset sites at a price businesses can afford, it is necessary to encourage the participation of as many land owners and land managers as possible — to encourage the development of a large and liquid supply of potential offset sites. Unless a business case is made for the commercial provision and ongoing management of offset sites, demand for sites will be frustrated and the potential environmental benefits reduced. Development of the business case for the supply side of biodiversity offsetting is critically important if offsetting is to realise its full environmental and economic potential