Business sense: saving biodiversity

Tougher rules to create new opportunities for Japan Inc.


NAGOYA — As international deliberations to preserve biodiversity and promote its fair and sustainable use heat up in the last week of the COP10 talks, business observers agree that regardless of the final outcome, the private sector’s role in the global effort will grow exponentially.

In the years leading up to the ongoing 10th Conference of the Parties of the Convention on Biological Diversity in Nagoya, Japanese businesses have become more conscious of protecting biological diversity. But as regulations are likely to become stricter, they may be forced to push their actions further, experts say.

While tougher rules could be seen as an additional burden to their operations, companies should actually consider this a positive investment that will help secure a sustainable business environment, they say, adding this may also create new opportunities.

Various firms are presenting their attempts at incorporating biodiversity concerns into their activities — from forestry conservation and the marketing of eco-label products to research activities examining the ecosystem of certain species — alongside the COP10 meetings.

“Until recently, most companies considered their businesses and biodiversity separate issues,” said Naoki Adachi, president of Response Ability Inc., a consulting firm for corporate social responsibility and environmental management. “But now they realize that without healthy biodiversity, they cannot maintain their businesses.”

A former research fellow of the National Institute for Environmental Studies, Adachi serves as the secretary of the Japan Business Initiative for Conservation and Sustainable Use of Biodiversity (JBIB), which consists of 33 Japanese corporations from various industries, including food, housing and construction, as well as 13 submember firms. The group in 2008 voluntarily teamed up with the aim of working together to look for better ways to incorporate the sustainable use of biodiversity into their corporate activities.

Each member has their own projects to help preserve biodiversity. For example, Sekisui House Ltd. has created a strict procurement policy for timber used in its projects. The company questions suppliers about tree species, the background of procured woods, the lives of residents near logging areas and the conservation of biodiversity.

Member firm Ajinomoto Co., which markets seasoning and soup stock, has been working with the National Research Institute of Far Seas Fisheries since 2009 on a project to survey the ecology of skipjack off the Pacific coast in an effort to ensure sustainable supplies.

But through JBIB, the firms also cooperate in developing tools to better incorporate biodiversity concerns into their business models. Such tools include a map that draws out the impact of companies’ operations on biodiversity.

During COP10, JBIB also announced a detailed score sheet that helps companies keep track of not only the flora and fauna within their own properties but also how they are managed.

Incorporating biodiversity concerns into their business practices means a thorough review of operations. Firms must assess their procurement of materials, research and development, use and development of land and resources, transportation and marketing, and even things such as the locations of their offices.

“It’s going to cost businesses more for sure, but I believe this is a reasonable investment,” Adachi said, pointing out that this is actually a risk management effort.

“It will be increasingly competitive to secure good materials, which means that, unless companies secure traceability of their procurement and stable supply-chain now, they won’t be able to obtain good materials in case of emergencies,” he said.

Unless companies act, they will also face the risk of protests from NGOs and consumers who may boycott their products, Adachi added.

The crucial role businesses play in preserving biological resources and sustaining their development has been touted internationally — especially since the 2006 COP8 Conference on Biological Diversity in Brazil. That year, a resolution addressing the private sector’s responsibility in preserving biodiversity was adopted.

The formation of JBIB is one example of how the Japanese private sector has begun acting on the issue of biodiversity in the years leading up to Nagoya COP10.

In March 2009, the Japan Business Federation (Nippon Keidanren) issued its “Declaration of Biodiversity,” which stated that its members, mostly major corporations, will aim to conserve biological diversity and pursue its sustainable use while collaborating with international and national organizations, NGOs and communities as partners in such activities.

“It is time to recognize that biodiversity is an important foundation for a future sustainable society and we are determined to act to contribute to biodiversity in collaboration and cooperation by sharing roles and responsibilities with all people as a member of the international community,” the declaration said.

The Environment Ministry in August 2009 drafted the “Guideline for Private Sector Involvement in Biodiversity,” which offered examples of how corporations could voluntarily become involved in the process.

Based on such trends, more firms have been drawing up policies looking more closely at how much their operations affect biodiversity, and what can be done to improve them.

Takafumi Ikuta, a research fellow at the Economic Research Center of Fujitsu Research Institute who has worked on business management and biodiversity issues, said that once major corporations begin to operate according to such guidelines, biodiversity conservation will expand, as suppliers will need to meet the criteria demanded by major firms.

But preserving biodiversity can be more challenging for companies than preventing climate change, Ikuta said.

Unlike climate change, where cutting carbon dioxide emissions was virtually the only indicator, biodiversity has multiple indexes that must be considered, making it difficult for companies to measure the cost-effectiveness of their investment, he said.

“Biodiversity is a global concern, but how to deal with its preservation varies from location to location, and each has its unique biodiversity and issues to consider,” he said. “This means that companies will have to make decisions on cost-effectiveness depending on each region, which can be challenging.”

But because this could make things difficult for one firm to monopolize the market, there may be a room for new competition, Ikuta said.

As more support is provided to developing countries to deal with preserving biodiversity, Ikuta also said related Japanese technology and services may find business opportunities there.

But for companies to become more versed in biodiversity issues, they must better communicate their activities not just internally but also to consumers, Ikuta said.

“We’ve reached a point where corporations, as well as the central and local governments and consumers, must take biodiversity very seriously,” he said.