ARU expert helps establish financial impact of biodiversity loss
ARU expert helps establish financial impact of biodiversity loss Cambridge Independent
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Professor Aled Jones shapes new policy to incorporate biodiversity loss into business decision-making
Professor Aled Jones, director of ARU’s Global Sustainability Institute, has played a key role in shaping a new policy aimed at incorporating the loss of biodiversity – and its associated risks and costs – into business decision-making.
The Biodiversity and Nature-Related Risks (BDNRR) policy has been launched by the Institute and Faculty of Actuaries (IFoA), the UK’s chartered professional body for actuaries which has over 30,000 members worldwide.
Chairing the Biodiversity Working Party
Prof Jones is the chair of the IFoA’s Biodiversity Working Party. This aims to improve actuaries’ understanding of biodiversity – crucial in providing our food, oxygen, and clean water – and the financial impacts caused by the loss of nature.
Since 1970, the Earth’s wildlife populations have fallen by almost 70 per cent, mainly due to deforestation, excessive human consumption, and pollution. Significant impacts are now found across 75 per cent of the global land surface and 66 per cent of the global ocean area, with an estimated one million species threatened with extinction. The timings and exact outcomes of biodiversity loss are still unknown, although the consequences, including financial, are projected to be significant.
Embedding nature-related risks in business decision-making
Businesses are adapting by pivoting towards sustainability in their own actions, but what happens if global supply chains are disrupted?
Prof Jones said: “Managing nature-related risks is critical, but currently isn’t carried out by the majority of businesses.
“The long-term, uncertain, and intangible character of the risks associated with biodiversity loss are actuarial in their nature and should be embedded in a business’ decision-making. However, there are significant challenges around understanding and tackling nature-related risks, not least the uncertainty around what the risk might be to a particular organisation from the loss of a specific species or landscape. There are potential ‘tipping points’ in various biodiversity systems and also many indirect impacts which are likely to be much larger than their direct impacts.
“To manage these risks, it’s not simply a case of getting better tools to quantify nature. Whenever we put a financial value on nature – the natural capital approach – it can never capture all the risks and costs associated with biodiversity loss. In this way biodiversity is different from climate change, where it is possible to value risk with greater certainty.
“I’m delighted the Institute and Faculty of Actuaries are championing the importance of using qualitative as well as quantitative data to tackle this issue, and the new Biodiversity and Nature-Related Risks policy will bring the vital topic of biodiversity loss into the boardrooms of some of the world’s largest companies.”
More detail on the new policy here.
SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 15: Life on Land | Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species | Not mentioned in the article |
| SDG 12: Responsible Consumption and Production | Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle | Not mentioned in the article |
| SDG 13: Climate Action | Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning | Not mentioned in the article |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes | Not mentioned in the article |
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 15: Life on Land
- SDG 12: Responsible Consumption and Production
- SDG 13: Climate Action
- SDG 9: Industry, Innovation, and Infrastructure
2. What specific targets under those SDGs can be identified based on the article’s content?
- Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species
- Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle
- Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning
- Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
No, the article does not mention or imply any specific indicators that can be used to measure progress towards the identified targets.
4. SDGs, Targets, and Indicators:
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 15: Life on Land | Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats, halt the loss of biodiversity, and protect and prevent the extinction of threatened species | Not mentioned in the article |
| SDG 12: Responsible Consumption and Production | Target 12.6: Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle | Not mentioned in the article |
| SDG 13: Climate Action | Target 13.3: Improve education, awareness-raising, and human and institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning | Not mentioned in the article |
| SDG 9: Industry, Innovation, and Infrastructure | Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes | Not mentioned in the article |
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Source: cambridgeindependent.co.uk
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