Contributions of the private sector to global biodiversity protection: case study of the fortune 500 companies

Bhattacharya, Tania Ray and Managi, Shunsuke (2012): Contributions of the private sector to global biodiversity protection: case study of the fortune 500 companies.

Abstract

This paper assesses the current activities of U.S. Fortune 500 companies with respect to global biodiversity protection and the goals of the Convention of Biological Diversity (CBD). Data and information collected from five hundred companies within eight major industrial sectors was further categorized at the company level to assess each company’s involvement in global biodiversity protection. Our findings show that although companies’ business profiles highly influence their decision-making process regarding the adoption of biodiversity protection policies and measures, their revenue profiles are less influential. We show that despite generating low revenues, companies in the utility sector are more active in the adoption of biodiversity protection policy than are those in the financial sector, which generates high revenues. This study also demonstrates that companies must be convinced of the major effects of biodiversity loss on their bottom lines to be motivated to protect biological diversity. Companies’ business and business related risk profiles can also influence the adoption of biodiversity protection policies within the company. The study further demonstrates that a measurable biodiversity impact indicator is necessary for the companies to get seriously involved in the mitigation action. Finally this study proposes a three step biodiversity loss mitigation action framework which is drawn upon the assessment of the 500 companies which can contribute to develop an elaborative framework of business sector specific mitigation plan.

• Item Type: MPRA Paper
• Language: English
• Keywords: Biodiversity, business sector, Fortune 500 companies, business risk, revenue
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q50 - General; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics > M20 - General; H - Public Economics > H0 - General > H00 - General

References

[ADB] Asian Development Bank. 1997. Economic Valuation of Environmental Impacts in Guidelines for the Economic Analysis of Projects. Manila (Philippines): Asian Development Bank.

Ahmad J, O'Regan N, Ghobadian A. 2003. Managing for performance: Corporate responsibility and internal stakeholders. International Journal of Business Performance Management. 5 (2/3): 141–153.

Bishop J, Bertrand N. 2010. Report for Business: The Economics of Ecosystems and Biodiversity. Malta: United Nations Environment Programme.

[CBD] Convention on Biological Diversity. 2012. The Statement of the Executive Secretary of the CBD on the occasion of the UNCTAD and BIOTRADE Congress. Rio De Janeiro. Brazil.

Ciocirlan C, Pettersson C. 2012. Does Workforce Diversity Matter in the Fight Against Climate Change ? An Analysis of Fortune 500 Companies. Corporate Social Responsibility and Environmental Management.(19):47-62.

Doremus H. 2003. A policy portfolio approach to biodiversity protection on private lands. Environmental Science and Policy. (6):217-232.

Dyke J, Cash S, Brody S, Thornton S.2005. Examining the Role of the Forest Industry in Collaborative Ecosystem Management: Implications for Corporate Strategy. Corporate Social Responsibility and Environmental Management. 12 (1):10-18.

[FAO] Food and Agriculture Organization. 2010. The Second Report on The State of the World’s Plant Genetic Resources for Food and Agriculture. Rome (Itay). Food and Agriculture Organization.

Glasbergen P. 2010. Global action networks: Agents for collective action. Global Environmental Change. ( 20):130-141.

Gutman P, Davidson S. 2007. A Review of Innovative International Financial Mechanisms for Biodiversity Conservation with a Special Focus on the International Financing of Developing Countries’ Protected Areas. World Wildlife Fund’s Macroeconomics Program Office supported project. Washington D.C : WWF-MPO Program.

Groves CR, Kutner, LS, Storms DM,Murray MP, Scott Schafale JM, Weakley M, Pressey AS, . 2000. Owning up to our responsibilities: who owns lands important for biodiversity in Stein BA, Kutner LS, Adams JS edited book: Precious Heritage: The Status of Biodiversity in the United States. New York. Oxford University Press: pp. 275- 300.

Heller EN, Zavaleta E. 2009. Biodiversity management in the face of climate change: A review of 22 years of recommendations. Biological Conservation. 142 (1).

Lamberton G. 2005. Sustainability Accounting – A brief history and conceptual framework. Accounting Forum. 29 (1):7-26.

Levrel H, Fontaine B. 2010. Balancing state and Volunteer investment in biodiversity monitoring for the implementation of CBD indicators: A French Example. Ecological Economics. (69):1580-1586.

Madsen B, Carroll N, Moore BK. 2010. State of Biodiversity Markets Report: Offset and Compensation Programs Worldwide. Washington D.C.Ecosystem Marketplace. Mahidhar V, Giffi C, Kambil A, Alvanos R. 2009. Rethinking emerging market strategies: From off shoring to strategic expansion. A Deloitte Review (Issue-4). Washington DC: Deloitte Development LLC.

Managi, S. (Eds.) 2012. "The Economics of Biodiversity and Ecosystem Services." Routledge, New York, USA.

Martens P, Rotmans J, Groot D. 2003. Biodiversity: Luxury or Necessity? Global Environmental Change .(13):75-81.

Merriam W. 1997. Life Cycle Assessment. A R eport of West Virginia University Extension Program. Morgantown (USA). West Virginia University.

Metcalfe J, Vorhies F. 2010. Exploring the case for a green development mechanism. Article presented in the International Workshop on Innovative Financial Mechanisms. Bonn (Germany). Convention on Biological Diversity. Moran D, Pearce D, Wendelaar A. 1996. Global biodiversity priorities: A cost- effectiveness index for investments. Global Environmental Change. 6 (2):103-119.

[CNN] Cable Network News. 2007. List of Fortune 500 Companies in the United States. [cited in October 2010]. Olson M.1965. The Logic of Collective Action: Public Goods and the Theory of Groups. Harvard University Press. Boston (USA). Harvard University.

Rondinelli DA, Berry MA. 2000. Environmental Citizenship in Multinational Corporations: Social Responsibility and Sustainable Development. European Management Journal.18 (1):70-84.

[TEEB] -The Economics of Ecosystems and Biodiversity. 2010. The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB, Geneva (Switzerland): United Nations Environment Program (UNEP).

[CBD] Convention on Biological Diversity. 1992. Article 2. United Nations Environment Program. U.S. General Accounting Office. 1995. Endangered Species Act: Information on Species Protection on Nonfederal Lands, edited by U. S. G. A. Office. Washington D.C. General Accounting Office. Vickerman S. 1999. A state model for im plementing stewardship incentives to conserve biodiversity and endangered species. The Science of the Total Environment. ( 240):41-50.

[WEF] World Economic Forum. 2010. Biodiversity and business risk. A briefing paper for participants engaged in biodiversity related discussions at the World Economic Forum Davos-Klosters Annual Meeting. Geneva. World Economic Forum.

Wagge S. 2007. Investing in the Future: An Assessment of Private Sector Demand for Engaging in Markets & Payments for Ecosystem Services. PESAL papers Series No. 2. Rome .UN Food and Agriculture Organization.. Walpole M, Almond A, Besancon C, Butchart S. 2009. Tracking Progress Toward the 2010 Biodiversity Target and Beyond. Science. ( 325):1503-1504.

Walter R. 2005. Millennium Ecosystem Assessment: Ecosystems and human well-being. Washington D.C. Island Press. Wunder S. 2005. Payments for Environmental Services: Some Nuts and Bolts. Occasional paper No.42. Jakarta (Indonesia). CIFOR