Prof Maurizio Zollo

Corporations have played a key role in the world’s biodiversity crisis. Now, some business leaders are recognising this – and making amends

At the end of 2022, countries around the world reached a landmark agreement on biodiversity, acknowledging the scale of the challenge we face. This is important: since 1970, we have seen a 69 per cent decline in wildlife populations, with the WWF highlighting “the double, interlinked emergencies of human-induced climate change and the loss of biodiversity”.

Alongside nations, businesses have a key role in addressing this crisis. Biodiversity loss is inextricably connected to changes in land use, overexploitation and increasing pollution, which corporations undoubtedly play a part in causing. Business leaders are beginning to recognise this and are working to mitigate some of the impacts and trends of biodiversity loss.

Scandinavian companies are more likely to focus their biodiversity efforts on changing their business models

But this is not a simple task. Biodiversity is difficult to map to specific activities, and there is no agreed measurement framework for it. This makes it complex for businesses and regulators to set specific and quantifiable targets for mitigating the biodiversity crisis.

Our new research takes a step towards addressing this issue, exploring how companies are embedding biodiversity into their business models and reporting on it. By analysing 40,000 sustainability initiatives launched over the last two decades by over 6,000 companies across all sectors and directed at the preservation and regeneration of life on land and water (UN Sustainable Development Goals 14 and 15), we have distilled insights for driving future nature-positive corporate action.

Philanthropic action vs. business model evolution

We found around half of biodiversity initiatives are philanthropic in nature, comprising donations, funding and communication activities. Although beneficial in supporting nature protection and regeneration action by communities and stakeholders, these are not as impactful as activities targeted at evolving business models to incorporate biodiversity into strategic areas such as R&D and supply chain management.

However, the data shows the proportion of initiatives focused on donations and communication fell from 57 per cent in 2008 to 48 per cent in 2021. This is still high compared with initiatives targeting other emergencies such as pollution and climate change, but it shows businesses are moving in the right direction. The next step will be for corporations to expand and integrate their sustainability strategies to target biodiversity losses more directly.

Walmart, for example, has committed to “placing nature and humanity at the centre of [its] business practices”. As part of this, the company has pledged to help protect, more sustainably manage or restore, at least 50 million acres of land and a million square miles of ocean by 2030. This will have a real, beneficial impact on nature and biodiversity, and will require Walmart to adapt its production and sourcing processes, serving as an example to other global players of how to become a regenerative company.

Regional and sector variations

While there are positive signs emerging from business, we found there are significant variations in how much focus, and what type of focus, companies give to biodiversity depending on their region and sector.

For example, we observed that those in Spain, Portugal and Latin America focus more on biodiversity than those in Scandinavia. However, Scandinavian companies are more likely to focus their biodiversity efforts on changing their business models, so they actively regenerate the natural environment (e.g. through new product development and operational processes) – a potentially more impactful approach.

Furthermore, a cross-sector comparative analysis shows more biodiversity initiatives, and more complexity within those initiatives, in sectors where biodiversity is a more material issue. For example, companies in the utilities, energy and materials sectors focus significantly more on biodiversity issues than those in healthcare and financial services. The former are also more likely to take impactful action through the evolution of their business models.

Implications for businesses

Overall, we found an average decline in the amount of corporate effort to address the biodiversity crisis, in the sense that there were fewer biodiversity actions per sustainability report over time. However, of those biodiversity initiatives, the quality appears to be improving. Less appears to be more, with companies, particularly in certain regions and sectors, moving beyond philanthropic action to focus on nature-positive business models.

A key aspect of this, moving forward, will be finding and harnessing ways to set and monitor biodiversity impact targets. Measurement tools such as the CDP Forest Questionnaire or the Taskforce on Nature-Related Financial Disclosures’ LEAP framework can be helpful. However, given the difficulty of obtaining data from tier-three suppliers, businesses also need to find ways of measuring biodiversity impact across supply chains.

Alongside measurement and reporting models, truly regenerative organisations require leadership to drive cultural change. This can help to build organisational capacity to detect opportunities that benefit both biodiversity and the bottom line. It can also position companies to detect threats from biodiversity losses, develop strategic initiatives to address them, and scale solutions across the value chain. In time, this approach can help businesses to switch from being threats to nature to being key drivers in regenerating the natural environment.

This article draws on findings from “The Evolution of Corporate Behaviour to Tackle Biodiversity Challenges” by Livio Scalvini (Imperial College London) and Maurizio Zollo (Imperial College London) published in collaboration with HSBC

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Prof Maurizio Zollo

About Maurizio Zollo

Professor of Strategy & Sustainability, Scientific Director, Leonardo Centre on Business for Society
Professor Maurizio Zollo is the Scientific Director of the School's Leonardo Centre on Business for Society. His research aims to understand how business organisations learn to grow and adapt to environmental turbulence and how managers can guide these evolutionary processes.

His research has been published in several leading journals, including the Academy of Management Journal, the Academy of Management Review and the Strategic Management Journal. His work has been covered in mainstream publications including Harvard Business Review, the Financial Times and The Wall Street Journal.

Professor Zollo is Editor-in-Chief of Organization & Environment and a past editor of the European Management Review. He served for a decade on the Executive Committee of the Academy of Business in Society, which he helped establish in 2002.

You can find the author's full profile, including publications, at their Imperial Profile