Understanding Social Biodiversity Impacts in ESG Reporting

Biodiversity within ESG (Environmental, Social, and Governance) reporting refers to an organisations sustainability impacts on biodiversity, ecosystems, and natural habitats. Whilst there are many environmental impacts associated with biodiversity loss, it is becoming increasingly important to also assess and measure how biodiversity loss impacts social factors.

Importance of Social Biodiversity in ESG Reporting

The inclusion of social biodiversity impacts in ESG reporting is essential for several reasons:

- It provides a holistic understanding of how business practices affect both people and nature.

- It helps investors assess a companies’ ethics and long-term sustainability.

- It encourages businesses to be accountable for their role in biodiversity conservation.

- It aligns with global frameworks, such as the UN Sustainable Development Goals (SDGs).

Key Social Biodiversity Impacts

Communities

- Indigenous and Local Communities: Biodiversity is often closely linked to the livelihoods of indigenous and local communities. Many communities depend on natural resources for food, medicine, and cultural practices. ESG reporting looks at how a company's actions impact these communities, whether by disrupting ecosystems, limiting access to resources, or by providing positive impacts through supporting community-led conservation efforts.

- Economic Impact & Jobs: Certain sectors, like agriculture, forestry, and tourism, can have a positive or negative effect on biodiversity. ESG reports analyse how companies contribute to the local economy while managing their impact on biodiversity. It also considers whether companies are creating jobs that preserve or restore ecosystems or are causing environmental damage.

Human Rights

- Access to Resources: ESG reporting should assess whether corporate activities are promoting or limiting access to natural resources, such as clean water, fertile land, and forests. When companies extract resources, ESG reports consider whether this contributes to social inequity by depriving local communities of essential resources.

- Land Displacement: Biodiversity projects, like conservation initiatives or protected areas, can sometimes result in the displacement of local populations. ESG reporting must account for whether a company is respecting land rights and preventing the forced relocation of people.

Social Responsibility

- Corporate Contributions: Companies may support biodiversity through conservation programmes, restoration projects, or partnerships with NGOs. ESG reporting on social impacts evaluates how companies are making an effort to protect biodiversity, for example through conserving or restoring ecosystems.

- Educational and Awareness: ESG reporting often includes whether companies are fostering biodiversity awareness among employees, communities, and customers.

Incorporating social biodiversity impacts into ESG reporting helps organisations address both environmental and social dimensions of sustainability, ensuring a more comprehensive approach to sustainability and allowing for actionable positive change across both the environment and society.