By Gabe John and Kristen Wernick April 20, 2022
Biodiversity loss is threatening ecosystems, economies, and ways of life while undermining our efforts to mitigate climate change. It is critical we incorporate biodiversity into ESG programs and initiatives to ensure a healthy planet where nature and humanity thrive.
In this first of a biodiversity article series, we address what biodiversity is and why it is vitally important to support life and society.
Top ESG priorities in the commercial real estate industry have focused on climate change and the race to net zero. While these initiatives are undoubtedly important, we have reached a crossroads. Not only will continuing on the current path prove ineffective, but progress thus far will be undermined unless we address a significant blind spot – biodiversity loss.
Biodiversity and the numerous services it supports are critical to life on Earth, especially for humans. Yet, biodiversity is declining at an alarming rate, threatening ecosystems and exacerbating climate change. The nexus between climate change and biodiversity makes it increasingly clear one cannot be remedied without the other. Indeed, some of the most effective and economic measures to combat climate change stem from nature itself.
Considering the built environment is responsible for 30% of global biodiversity loss, it is critical the commercial real estate industry address its impacts and dependencies with respect to nature (Source). Companies have not only a significant role to play but an extraordinary opportunity to halt biodiversity loss, regenerate nature, and design nature positive business models as leaders in ESG. Later this year, the second meeting of the UN Biodiversity Conference (CBD COP-15) is due to take place in Kunming, China. Decisions will be made on a new post-2020 Global Biodiversity Framework, which is expected to call for urgent and transformative action with respect to biodiversity. To prepare for these changes and create more progressive, holistic, and effective ESG strategies, we need to start by understanding biodiversity and its importance.
Why biodiversity is critical for life
Biodiversity is the variety of life on Earth. It encompasses all life - bacteria, fungi, plants, animals, and humans. Biodiversity can also refer to the evolutionary, ecological, and cultural processes life needs to survive and thrive (Source). Not only are these processes fundamental to a resilient planet, but they provide the many ecosystem services humans depend on, including provisioning, regulating, cultural, and supporting services (Source).
Provisioning – Provisioning services are tangible resources that can be extracted from the environment, such as food, shelter, medicine, clothing, and fuel. The burning of oil, coal, and natural gas, however, is contributing to climate change and impairing ecosystems’ abilities to continue providing critical resources.
Regulating – These services regulate natural phenomena and provide benefits including nutrient cycling, pollination, erosion and flood control, water purification, disease control, and climate regulation (Source). Fungi decompose organic matter and deliver nutrients to plants; insects pollinate plants and support food systems; tree roots secure soil and prevent erosion; and forests and wetlands absorb carbon and help regulate atmospheric carbon dioxide. A thriving ecosystem, therefore, purifies, secures, and promotes life.
Cultural – From recreation to spiritual enlightenment to livelihood, the natural world shapes humanity’s cultural identity. Today, there are roughly 1.3 billion people worldwide who depend on forests for their way of life (Source) and approximately a billion people who are supported, directly or indirectly, by coral reefs (Source). When ecosystems thrive, so do societies.
Supporting — Foundational to the other ecosystem services, supporting services provide the functions and processes that enable life on Earth, such as photosynthesis, soil creation, nutrient cycling, and the water and carbon cycles (Source).
Healthy, biodiverse ecosystems support these services and thus our survival. Yet our disjointed relationship with nature has compelled society to regard natural resources as dispensable tools instead of essential elements. Human activity has significantly altered the majority of terrestrial and marine ecosystems worldwide, resulting in the loss of roughly 83% of wild mammals and 50% of plant species (Source). Abundance of flying insects has also dramatically decreased in recent decades, jeopardizing food webs and pollination services (Source). With these rapid declines, we are now amid Earth’s sixth mass extinction – the first caused by humans (Source).
How biodiversity loss threatens society
Pollution, habitat loss, invasive species, overexploitation, and climate change are the key pressures fueling biodiversity loss (Source). While it is not felt uniformly across all regions, global biodiversity loss is destabilizing food production, reducing climate resiliency, threatening human health, and limiting the planet’s capacity to combat climate change.
Destabilizes food production
Altering habitats and adopting unsustainable land management practices can strip a region of its biodiversity, undermining the region’s ability to provide for people, wildlife, and society. For instance, biodiversity loss through deforestation – particularly the conversion of tropical rainforest into agricultural land – threatens local communities. During times when crop yields are lacking or there is an economic downturn, these vulnerable communities depend heavily on robust plant biodiversity for food and income (Source). Deforestation can lead to soil erosion, soil infertility, and desertification as the upheaval causes extreme disturbance to soil ecosystems (Source). This makes it difficult to sustain long-term crop yields and inhibits forest recovery. As biodiversity wanes, so too does the genetic diversity that builds resilience and nurtures soil, making humans more vulnerable to threats of food insecurity and land infertility.
Reduces climate resiliency
Beyond providing food, nature serves as a buffer against natural disasters such as intensifying storms and rising tides. Studies indicate wetlands in the Northeastern U.S. prevented $625 million in flooding damages during Hurricane Sandy in 2012 by absorbing and directing excess water flow (Source). Similarly, healthy reefs of coral, oysters, mussels, and other aquatic species dampen wave energy, reducing storm impact on coastal communities. A 2021 report estimates U.S. coral reefs help prevent upwards of $1.8 billion in flood damages annually (Source). Yet coral reefs are being threatened by pollution, overfishing, unsustainable coastal development, and the effects of climate change, including rising ocean temperatures and ocean acidification (Source). The societal and environmental benefits natural reefs provide should incentivize their preservation as a natural mechanism to protect biodiversity and urban development.
Threatens human health
In addition to climate resilience, nature provides resources and systems that support human health and well-being. For instance, loss of forest biodiversity diminishes medicinal resources (Source). Modern medicine derives a quarter of drugs from plants in rainforests (Source). Nearly three quarters of cancer treatments are produced directly from or inspired by plants in nature (Source). Habitat loss not only limits medicinal resources, but also decreases opportunities for new medical discoveries. Moreover, biodiversity can serve as a buffer to keep wildlife pathogens from spreading to humans (Source). Studies show robust biodiversity decreases the spread of Lyme disease (Source). In light of this research and the devastating COVID-19 global pandemic, preserving biodiversity stands as a strong measure to protect public health.
Decreases effectiveness of carbon sinks
Continued habitat destruction and ecosystem manipulation can accelerate the rate of climate change by inhibiting nature’s capacity to serve as a carbon sink. For instance, increased concentrations of plastic in the ocean can decrease photosynthetic activity of phytoplankton in surface waters (Source). This leaves more carbon dioxide in the atmosphere, further contributing to the greenhouse effect warming the planet. In addition, approximately a quarter of GHG emissions are from soil carbon loss due to land conversion and poor land management practices. Soils currently absorb roughly 25% of all fossil fuel emissions each year but hold less than half the carbon they did prior to anthropogenic land management practices (Source). Wetlands store 20-30% of estimated global soil carbon despite covering only 5-8% of Earth’s surface (Source). Yet, wetlands are disappearing three times faster than forests (Source). Protecting these ecosystems and incorporating them into urban planning and development is pivotal to mitigating climate risk and strengthening resiliency. Finally, hotter climates lead to warmer soil temperatures that foster increased microbial activity. This results in higher amounts of carbon dioxide released into the atmosphere via microbial respiration (Source). Thus, the loss of nature and biodiversity are exacerbating climate change, proving the connection between these critical issues.
As an industry and a society, there are immense opportunities to prevent the worst effects of biodiversity loss and climate change. If properly nurtured, natural systems have the potential to sequester up to 37% of the emissions needed to maintain global climate change under the 2°C threshold relative to pre-industrial levels (Source). Given the built environment is responsible for 40% of carbon emissions globally, natural solutions should be a core focus of the CRE industry going forward (Source). In its SBTs for Nature Initial Guidance for Business, the Science Based Targets Network asserts, “Without action to halt and reverse the loss of nature, projections of economic growth and visions for a better life are impossible. The World Economic Forum drives this point home in its 2020 report, declaring “There is no future for business as usual.”
The need for immediate action is causing reporting frameworks, investors, and stakeholders to place increased emphasis on the materiality of biodiversity. Verdani is working diligently to provide our clients with strategies and roadmaps to integrate biodiversity into corporate values while enhancing and informing ESG initiatives. In our next article, we will explore the commercial real estate’s impacts and dependencies on biodiversity, expected ESG reporting changes such as the new Task for Nature-related Financial Disclosure (TNFD), and strategies we are exploring to support a nature-positive future.
About the Authors
Gabe John, AWAI Certified Copywriter Gabe is an Associate Communications Manager for Verdani Partners. He fosters client stakeholder engagement through the creation of awareness campaigns, brand language and annual reports. He also helps craft Verdani's thought leadership, developing articles on key topics in the ESG and sustainability space. Gabe holds a B.S. in Environmental Science from UC Davis.
Kristen Wernick, MBA, LEED Green Associate
Kristen is an Associate ESG Manager for Verdani Partners, where she leads the Biodiversity Committee and ESG programs for real estate clients. She brings experience in the native plant landscaping, water efficiency, sustainable landscape design, and business development fields. She has worked with numerous stakeholders including property managers, water agencies, landscaping and nursery professionals, and scientists. She holds an MBA from the UCI Paul Merage School of Business, an A.S. in Landscape Design, and a B.S. in Environmental Studies.
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