are companies responsible for the protection of biodiversity? · 2020. 11. 13. · hubert reeves,...

Vigeo rating October 2012

Are companies responsible for the protection of biodiversity?

A comparative analysis of 127 listed European companies on their strategies to protect biodiversity

With the contribution of:

Vigeo rating October 2012 2

Summary

Foreword 3

Key Findings 4

Introduction 7

Why Should Companies Strive to Mitigate

Their Impacts? 9

Overall Performance Analysis 17

Method and Evaluated Sample 17

Performance Analysis 18

Focus on Three Key Sectors 31

Food 31

Energy 36

Building Materials 40

Appendices 43

Conclusion 48


Foreword Many people still think that biodiversity is only evaluated in terms of lists of species: birds, flowers, butterflies…Yet, biodiversity is the whole of life itself and of all the interactions that perpetuate it. The source of many ser-vices provided to humans, it supports, sometimes in an invisible manner, many human activities such as climate regulation or soils’ natural fertility. To make it short, humans belong to and depend on biodiversity and so do their companies. They are linked to it, like so many other actors, through impacts – pollution, destruction, overex-ploitations - but their links to biodiversity also show in their dependence on it, whichever the sector may be. Oil, for example, comes from biodiversity of the past! Lastly, more and more companies (but still not enough) are being remembered for the attention they show to biodi-versity and for their actions in its favour. From this point of view, the interdependence between companies and life is obvious. This link must be recog-nized for the sake of not only biodiversity, but for com-panies as well. For managers and executives, turning toward the future brings growing implications for the management and preservation of life as well. This is the ultimate objective. Companies can be and must be a driving power for the development of another economic model integrating the finiteness of resources (even those regarded as infinitely renewable) that pro-poses fair production and consumption modes in bal-ance with the biosphere. A few years ago, almost nobody was aware of carbon issues. We can be assured that companies will soon know how to integrate biodiversity into their business models, showing their understanding of the links be-tween humanity and biodiversity everyday. Hubert Reeves, President of Humanité et Biodiversité

The protection of biodiversity appears to be a forgotten area of sustainable development. The fight against cli-mate change has progressed, notably through the re-duction of greenhouse gases, and is at least discussed in the media, however the protection of biodiversity gets less attention. Companies struggle to integrate biodiversity into their responsibilities. Yet, when in 1992, the UN adopted the United Nations Framework Convention on Climate Change, it adopted at the same time the Convention on Biological Diversity and declared that biodiversity was a common concern for humanity, and as an unavoidable condition for every development process. Careless companies take risky bets on their reputation, their legal certainty, the societal acceptance of their activ-ities and for the sustainability of their growth models. The protection of biodiversity is a perfect example of a subject that calls upon the companies’ ability to think about their risks in the long-term, and to prevent them before market rules and laws force them to do so. But don’t be misguided. The actions of civil society and the progress of rules and innovations initiated by some lead-ing companies, though slight they may be, will raise the protection of biodiversity among the key corporate re-sponsibility factors for companies and investors . While this study highlights the indifference and belated-ness regarding the implementation of principles and objectives of the UN International Convention on protec-tion of biodiversity, it also shows that some companies, starting with those who were subject to controversies or condemnations, succeeded in inventing innovative strat-egies. These companies, unfortunately rather scarce, pave the way. Vigeo plays its part, informing investors and asset man-agers on the reality and the degree of relevance of com-panies’ behaviours regarding environmental issues. Pro-tection of biodiversity is at the heart of companies’ envi-ronmental responsibilities. To better report to our inves-tor partners and to help companies react and take steps, Vigeo chose to create a partnership with Humanité et Biodiversité for this sudy. The reflection of Hubert Reeves and the actions of his association are relations with which we are delighted to merge Vigeo’s work. Nicole Notat, President of Vigeo

Vigeo and Humanity and Biodiversity are partnering to exchange information, ex-pertise and experience on issues related to biodiversity. It is in this context that they collaborated on this study.


Key findings

• Companies’ overall level of awareness with respect to protection of biodiversity is lim-ited. Among the nine sectors included in this study, only one shows a good overall perfor-mance (the Building Material sector). All other industries show substandard to limited levels of awareness.

• Performances are heterogeneous across sec-tors but also within industries: in some sec-tors (the Food, Energy and Heavy Construc-tion sectors), the lack of information of some players contrasts with high levels of aware-ness of others.

Companies appear to be aware of the possible damage to their reputation that may arise from a lack of communication on the protection of biodiversity, as 74% of them have made references to the pro-tection of biodiversity in their public documentation.

A partial Identification of Impacts

Overall Limited and Heterogeneous Levels of Awareness

• Companies’ ability to identify the majority of their impacts on biodiversity appears limited. • A majority of companies appear to focus on some of their impacts on ecosystems.

– Loss, degradation and fragmentation of habitats on operation sites during operations are in general the most widey identified and tackled impacts.

– On the opposite, Impacts linked to controversial activities of some sectors do not, in most

cases, appear in companies’ reporting. As an example, in the food industry, the prevention of impacts linked to GMO culture and from first and second generation biofuels are barely mentioned.

Integrating Biodiversity in the Management of Operations, a Factor of Differentiation

• The level of integration of biodiversity in companies’ management strategies strongly varies from one sector to another. In some sectors, such as Building Materials and Elec-tric and Gas Utilities, companies show a good level of integration of biodiversity issues at the management level. On the opposite, the Beverage, Food and Oil Equipment and Ser-vice sectors, show a poor level of reporting on this issue.

• While a majority of companies appear to carry out environmental impact assessments be-fore implementing projects, less than 40% of them report on the implementation of group-wide biodiversity management systems, in-cluding biodiversity management guidelines, trainings of relevant employees and the moni-toring of indicators.

Biodiversity is part of companies’common corporate communication


• All sectors under review except two (Beverage and Oil Equipment and Services), face allega-tions regarding their impacts on biodiversity.

- The best performing sectors in terms of commitment and implemented measures are also facing the highest rates of allega tions. On the other hand, the two sectors for which no allegation has been reported are also those showing the lowest level of reporting and weakest level of engage ment.

- This could reflect stakeholders’ role in increasing companies’ level of commit ment with regards to the protection of bio diversity.

• Companies’ reporting on the share of sites or part of their activities covered by measures to re-duce impacts on biodiversity at local level appears as a widespread element of weakness. In most of the sectors under review, a majority of companies either do not report on the perimeter covered by measures implemented at site level or have implemented these measures in only a minority of sites or activities.

A Weak Disclosure of Indicators o biodiversity

• All sectors show overall weak reporting on indicators reflecting the state of biodiversity on their operations.

– The majority of companies do not dis-

close any quantitative data in this re spect. Among the few disclosing such figures, most of them report on means rather than results indicators reflecting the impacts of their operations on biodi versity.

– It appears that the sectors disclos ing the highest level of indicators are also those that have allocated the most advanced measures to integrate biodiversity in the management of their operations.

A Defensive Approach to Stakeholders’ Scrutiny

The Perimeter of Measures Implemented at Site Level is Often Undisclosed or Extremely Limited


The 20 most advanced managerial performances in terms of biodiversity management

Rank Company Sector Score/100

1 Anglo American Mining 77

2 Lonmin Mining 73

2 Xstrata PLC Mining 73

3 Iberdrola Renovables S.A.

Electric & Gas Utilities

72

4 CRH plc Building Materials 71

4 Tema Electric & Gas Utilities

71

5 British American Tobacco

Tobacco 70

6 Carillon PLC Heavy Construction 66

7 Iberdrola Electric & Gas Utilities

64

8 Danone Food 63

9 Imerys Building Materials 61

9 Rio Tinto Mining 61

10 BHP Billiton PLC Mining 60

10 Holcim Building Materials 60

10 Bonduelle Food 60

11 Heidelberg Cement AG

Building Materials 57

12 Titan Cement Building Materials 55

12 EDF Electric & Gas Utilities

55

12 Unilever PLC Food 52

13 Royal Dutch Shell A Energy 51


Introduction

In 2011, 19,265 species were considered endangered and 797 extinct by the IUCN (International Union for Conservation of Nature). Meanwhile, the loss of arable land is estimated between 70,000 and 140,000 km2 per year by the World Bank and the depletion of forests at 13.7 million hectares. Since the release of the Convention of Biological Diversity in 1992, these rapid degradations of the ecosys-tem have been considered a common concern by a number of governments. While companies’ respon-sibilities with regards to biodiversity protection are raised by a growing number of stakeholders. Our economies’ reliance on the services provided by ecosystems has been highlighted by several studies, including, among others, the 1st phase of the “The Economics of Ecosystem and Biodiversity” (TEEB), released in 2007 by the UNEP (United Nations Environment Programme) and the European commission. Private firms play a large role in environmental degradation and, at the same time, rely on ecosystem services and environmental stability. As such, their ability to mitigate their impacts on biodiversity may affect the durability of their businesses. The present report analyses companies’ performances with regards to the management of their im-pacts on biodiversity. - The first part provides an overview of companies’ impacts on biodiversity and risks facing different sectors. - The second part analyses major performance trends for 127 companies in nine sectors rated by Vigeo on this issue. - In the third part, a focus is made on three sectors: Food, Energy and Building Materials.


Environmental NGOs have long been concerned with public policy alone. However, issues about biodi-versity concern the whole of society. That’s why Humanité et Biodiversité has been committed for a few years to shedding light on the subject and has dialogued with every actor, particularly economic ones, in order to integrate human activities into biodiversity and conversely, instead of putting the two at odds or separating them further. We believe NGOs have an essential part to play in the intersection of private and public strategies, es-pecially to improve synergy among actors, but to also serve as a warning system for companies, bring-ing their knowledge of issues to those which have made commitments to biodiversity. It is in this spirit that we work and exchange with Vigeo in a general sense, on this study in particular, which deserves our attention. Vigeo offers a unique panorama of companies belonging to some sec-tors, that allows for a status report on the current reality of their commitments and ambition and to identify and promote best practices. It also provides an opportunity to eventually better direct financial investments towards the actors most committed to biodiversity. Throughout this document you will find comments from our association, bringing in an external point of view. Globally, we notice that although companies understand the impact on their brand image or reputation, there is still a long way to go to be fully aware of the importance of the issue of biodiversi-ty, of the risks, of the impacts, but also of the opportunity for innovation. The subject has made great strides, in terms of local impacts to avoid, but lacks true global strategy. None of the studied compa-nies has undertaken a genuine effort to work on the links between its activity and biodiversity with costs/benefits analysis, even though these costs remain real. It is important to specify that this study is an assessment of companies' efforts in favour of biodiversi-ty and not a physical or biological evaluation: no evaluation of the state of biodiversity regarding the impacts of the activities of these companies has been made and this is not the purpose of the present study. Nevertheless it is an essential objective that we must pursue in fine, in particular through re-fined and scientific approaches to production. In addition, some impacts must not be forgotten: indirect and/or cumulative impacts, spillover effects and more specific impacts too often neglected (erosion and soils compression, mismanagement, im-pacts of the supervision of construction sites, light pollution…). Lastly, the starting point given by this study must be pursued by integrating other sectors that rely on biodiversity, such as the pharmaceuti-cal or cosmetics industries.

Introduction


Why Should Companies Strive to Mitigate their Risks?

In 1992, the UN Convention on Biological Di-

versity (CBD) stated that the conservation of bio-logical diversity was "a common concern of hu-mankind" and an integral part of the develop-ment process. This convention sets three main goals: conservation of biological diversity, sus-tainable use of its components and fair and equi-table sharing of benefits arising from genetic re-sources. It offers decision-makers guidance based on the precautionary principle. The CBD has defined five types of pressures or direct drivers affecting biodiversity: • Habitat loss and degradation • Climate change • Excessive nutrient load and other forms of

pollutions • Over-exploitation and unsustainable use of

natural resources • Invasive alien species In addition the CBD has identified underlying causes of biodiversity losses. These indirect driv-ers affect biodiversity by influencing the quantity of resources used by human societies. They in-clude: • Demographic change • Economic activity • Levels of international trade • Per capita consumption patterns, linked to

individual wealth • Cultural and religious factors • Scientific and technological change As major actors of economic activity, internation-al trade and scientific and technological change,

companies bear a responsibility in the erosion of biodiversity. Since then, companies’ responsibilities with re-gards to the management of their impacts on biodiversity have been highlighted in a number of international conventions(1). These are translated into concrete measures put in place by European legislation. According to these reference texts, companies are expected to: • Identify the impacts of business operations

on biodiversity and establish evaluation sys-tems to assess the health of impacted ecosys-tems.

• Avoid or reduce the exploitation of sensitive ecosystems. The reduction of impacts on eco-systems requires two types of measures:

– Measures to integrate biodiversity in the

management of operations (such as envi ronmental impact assessments, training of relevant managers or employees on b i odiversity, relevant biodiversity manage ment guidelines and the monitoring of biodiversity indicators)

- Measures to reduce companies’ impacts at local operational levels. These depend on each sector of activity • When there has been exploitation, rehabili-

tate the ecosystem.

Stakeholders’ Expectations and Principles for Action

1. These texts are presented in the Appendices


Companies’ impacts on biodiversity are specific for each industry. However, two groups of sectors can be built, based on each sector’s processes and reliance on ecosystems’ services. In the Food, Beverage and Tobacco industries, production processes generating impacts on bio-diversity are linked to culture (of trees, tobacco, plants, crops, etc), animal raising, fishing, lodg-ing or the use of surface and groundwater. These impacts include: • Soil transformation due to the release of agri-

cultural inputs (fertilizers, pesticides) in eco-systems

• Soil degradation and erosion due to intensive agricultural practices (single-crop farming, etc.)

• Groundwater and surface water depletion • Deforestation • Fisheries depletion Activities of the Heavy Construction, Building Ma-terials, Mining and Oil Equipment and Services sectors have impacts linked to extraction, transport and construction processes, namely: • Soil erosion • Segmentation of ecosystems • Perturbation of water courses • Effects on sensible species and populations’

dynamics linked to habitats’ degradations • Opening of formerly wild areas to agriculture

or other use

Companies’ Impacts on Biodiversity

Biodiversity Under Pressure

Biodiversity is the whole of living things and their interactions, said differently, life and its “functioning”. Tradi-tionally, we speak of three diversity levels: genetic, specific and ecosystem-based (diversity of the environment) but the richness of this definition is the highlighting of existing interrelationships between each element of biodi-versity. These interrelationships provide humans with services also called “ecosystem-based services”. Investiga-tors from the Millennium ecosystem assessment have identified four types of services: supply (goods or services coming from the ecosystem like food production), regulation (services and benefits coming from natural processes such as water depuration), cultural (immaterial benefits: recreational, spiritual, patrimonial or existence value) and support (natural processes that serve other services such as photosynthesis) (MEA, 2005). As a consequence, this assessment reveals that: • 60% of the worldwide ecosystem-based services are degraded • 20% of the planet’s coral reefs have disappeared and more than 20% are degraded • 35% of mangrove forests has disappeared While: • Water withdrawal from rivers and lakes have doubled since 1960 • 25% of the surface area of Earth is used for crops or cattle (MEA, 2005) Five factors have been identified by investigators, as causes for this massive erosion of biodiversity (people speak of the 6th extinction crisis, the 5th being the extinction of dinosaurs), such as: • Excessive exploitation of biological resources in production and supply sectors, such as excessive fishing • Destruction and splitting up of habitats from deforestation, linear infrastructure construction or progres-

sion of artificialisation (ex: in France, artificialisation of a surface equivalent to one “département”, 6100km² between 2003 and 2009 i.e. 7 years instead of 10 between 1993 and 2002, source: 2011 French report on soils state in France)

• Pollutions (coming from industry, agrifood, tourism…) and their consequences on soils or ocean acidification, biogeochemical cycle perturbation, habitats degradation (for example coral reefs) or animal poisoning

• Exotic invasive species often brought or dispersed by human activities (ex: along infrastructure) which boom can be explained by the increasing speed and the growing distance of exchanges in a globalisation context

• Last but not least, climate change, natural phenomenon amplified by strong greenhouse gases emissions coming from human activities. Will climate change’s speed allow species adaptation and more generally, will it give time for biodiversity to adapt itself?


Reliance on ecosystem services

Ecosystem services are offered to humankind and can also be used by private companies. As such, their degradation may have an impact on companies’ business. According to the Common International Classification of Ecosystem Services(2) from the European Envi-ronmental Agency, ecosystem services are of three main types: Provisioning services include all materials and energetic outputs produced by ecosystems. These are divided in three classes: • Nutrition - Terrestrial, freshwater, marine plants and animals, - Potable water • Materials - Biotic materials such as non-food plants or animal fibers, genetic resources - Abiotic materials such as mineral resources • Energy - Renewable biofuels from plant-based or animal-based resources - Renewable abiotic energy (wind, hydro, solar, tidal and thermal power) Regulating services include natural processes offered by ecosystems such as: • Regulation of waste - Bioremediation using plants or micro-organisms • Flow regulation - Air flow (ventilation), water flow (storage, sedimentation, attenuation of wave energy) - Mass flow regulation (protection from erosion, stabilisation of mudflows) • Regulation of physical environment - Atmospheric regulation (global climate regulation), water quality regulation (purification and oxygenation), soil quality regulation (maintenance of soil fertility and structure) • Regulation of biotic environment - Life-cycle maintenance and habitat protection (pollination, seed dispersal), pest and disease control, gene pool protection Cultural services include non-material ecosystems output having symbolic, cultural or intellectu-

al significance. • Symbolic: - Aesthetic information - Spiritual experience • Intellectual and experimental - Recreation and community activities - Information and knowledge (scientific and educational) While methodological research on the quantification of these services’ value is ongoing, experts now agree that these services have a value. Companies’ operational efficiency may indeed partly rely on these services. Companies in agricultural-based sectors (such as Food, Beverage and Tobacco) depend, for the securi-ty of their supply, on ecosystem’s services, including: • Provisioning services for - Raw materials (biomass, crops, etc) - Water - Renewing of species (fishes) - Natural fertilisers

2. European environment agency, Common International Classification of Ecosystem Services (CICES): 2011 Update


• Regulating services such as - Pollination - Flood prevention, erosion prevention - Water treatment - Maintenance of soil fertility - Maintenance of genetic diversity Non-agricultural-based activities (such as energy production, manufacture of building materials, heavy construction, etc.) rely on: • Provisioning services for - Raw materials (e.g. extracted minerals or hydrocarbons) - Energy (e.g. hydro-power generation, wind power generation) • Regulating services in terms of - Soil erosion prevention - Regulation of water flows - Moderation of extreme climatic events • In these sectors, the stability of the work environment remains key in terms of limiting costs linked

to the security of operations such as extraction, transport infrastructure or engineering work. Poor management of ecosystems may have an impact on operational costs such as insurance, safety, etc.

As such, companies failing to mitigate their impacts on biodiversity may endanger their own ability to perform their operations in the long run.

« Ecological recapitalization »

Consider that biodiversity will be more and more necessary to the development of our societies is a belief that can startle people. The exact opposite point of view could be defended, i.e. as time goes on, technological improvements have made us less dependent on nature, on its resources and on its vagaries, thus making the dream of 19th century(1) chemical engineers come true. Synthetic chemistry provides us today with textiles, stains, medicine, fertilisers… without needing molecules coming from life. We could say the same of our living places or transportation means, which have freed themselves from classic materials (wood, cob, thatch) or from animal draft and consider that even our diet will at some point match the prediction of a synthetic production. Yet, the feeling of a growing independence towards nature is, for most, just an illusion. An illusion for technical improvements that gives us the impression of freeing ourselves from nature, sometimes has strong impacts on nature or boomerang effects on life and we suffer from their harmful and often unantici-pated consequences on the medium or long term, such as the emergence of phytosanitary products’ resistance or resistance to synthetic antibiotics, or genetic mutations encouraged by the multiplication of the exposure of life to some chemical molecules and pollution. For our century and undoubtedly beyond, biodiversity and the natural resources with which it interacts (soils, water), constitute a major pillar of the sustainable development of our society and this dependence will surely grow. Said differently, sustainable development of our planet’s societies is likely to be severely undermined, if not com-promised, if we do not undertake an “ecological recapitalisation” right now, i.e. a policy aiming to develop pro-gressively biodiversity and the services it is likely to provide sustainably on our Earth. The necessity to implement such a policy right now is justified in particular by the time needed, which could last several decades, between the taking of the measures and the full functioning of the concerned ecosystems: we can take as examples the time necessary for a replanted hedge to protect all the species that are linked to it or for a crop soil put back into a meadow to recover a high-potency of organic matter, similar to an ancient meadow. This way, companies, due to their dependence on life through their hold on the soil, through their exploita-tion and transformation of resources, are first in line to do this recapitalisation. It doesn’t constitute a revival of biodiversity in the places where it has been degraded but a biodiversity development policy that implicates vari-ous actors, both in their choice of priorities and in their implementation.

1. Marcellin Berthelot wrote in 1896 : «This is where we will find the economic solution of the biggest issue relying on chemistry, manufacturing food products. In theory, it is already solved: oils and fats synthesis has already been realized for 40 years, those of sugar and carbon hydrates is happening today, and those of nitrogen components will be happening in the next future. When energy is economically manufactured, it won’t be long before we manufacture food products entirely with carbon from carbonic acid, with hydrogen from water and with nitrogen and oxygen from the atmosphere.


2. According to the expression (contraction of chaotic and well-ordered) built in 1993 by Dee Hock, founder and former CEO of Visa Credit Card Association.

A new managerial culture What if biodiversity, as a strategic issue for companies, carried the foundations of a new managerial culture? Read-ing this document, we will understand that the company must preserve the functioning of the ecosystems, on which, it, its suppliers and its customers rely. However, this good functioning relies for most on a biological diver-sity that is widely unknown and which main characteristics are variability, unpredictability and emergence. This “chaordic”(2) functioning gives ecosystems an evolutionary capacity and a resilience allowing an optimized function-ing, adapted to the circumstances. Companies’ management relies on an often opposed approach, aiming to ob-tain maximum performances in a supervised environment. That’s how managers and engineers are trained, and that’s when they deliver their best: conceiving and piloting processes allowing maximum performance in a mas-tered and predictable framework. This vision can lead to a slightly embarrassing “externality” consideration of what is though, the core of life, men and their organisations. Looking at it this way, life, biodiversity, would only be a strain, an inconvenience, with its habit to continuously evolve, with its numerous interactions with conse-quences very difficult to predict. This obsession of mastery could paradoxically leave the company disarmed in front of a sudden and unexpected modification of its conditions of exploitation; that will eventually happen, in spite of all the undertaken measures and the most performing control systems. In the current context of quick and global changes, the company would have a lot to gain by better knowing and understanding the functioning of living systems in order to take their inspiration and to detect and encourage the opportunities that a real awareness of biodiversity can provide. In front of uncertainty and programmed depletion of fossil fuels, we have a lot to learn from the most sustainable production program: the biosphere and its 3,8 billion years of research and development. After all, every specie that lives today, every ecosystem is an innovation that was successful and that managed to adapt itself to difficult conditions, to demanding specifications, like the one that consists in recycling in a closed circuit every compo-nent, without waste products, or uses only energies based on solar radiance, that which no depletion is pro-grammed for several billions of years. Look at it from an ecologist and naturalist point of view, collate infor-mation, take inspiration from the forms and structure of life, understand how it produces and recycles its matter flows and energy; it’s the approach of biomimicry or bio-inspiration, of which applications to companies, process-es, organisations or strategies, are countless. Biodiversity provides us with the largest library there is. It is, after all, the best ally of the company to help it pre-pare itself for the unavoidable economical mutations that the transition to different energy sources will engender. We ought to know how to ask it for information!

For companies, risks related to the management of biodiversity are closely linked to their impacts on and interactions with ecosystems. These risks are linked to three main contextual elements, that are specific for each sector: • The legal framework • The level of stakeholders’ scrutiny • The reliance on ecosystem services They are presented in the following table:

Risks and controversies


Type of impact Causes Type of risk Effect on the asset

Leg

al F

ram

ew

ork

Fines or legal proceedings

Non compliance with legislation (on protected area, protected species, etc)

Legal security Operationnal efficiency Reputation

Negative impact on the ability to obtain licences to operate Negative: costs linked to legal proceed-ings and potential postponed projects Negative impact on the company's image

Sta

keh

old

ers

Stakeholders’ criticism

Non compliance with sector standards Use of processes damaging ecosys-tems (such as oil sand extraction, non responsible palm oil) Other damages to

Reputation Operational efficiency and reputation

Positive stakeholder’s feedbacks

Compliance with recognised standards Implementation of protection pro-cesses in coopera-tion with external stakeholders

Reputation Operational efficiency

Positive impact on brand image Positive: increased acceptability of prod-ucts with potentially positive effect on prices, increased ability to obtain bids Positive: benefits from stakeholders’ expertise to foresee long-term operation-al issues related to biodiversity, efficient impact assessments or reduction measures

Eco

syste

m se

rvice

s Resources de-pletion

Non-sustainable agriculture, fishing

Operational efficiency

Negative: incertitude on the long-term availability of resources

Resources conservation

Sustainable agri-culture practices


Positive: long-term supply security

Environment instability

Soil erosion, accelerated climate change due to the modification of ecosystems, more frequent extreme climatic events


Negative: increasing instability of the natural environment may generate grow-ing costs to secure operations and insur-ance costs

Negative impact on the company's im-age Negative impact on the acceptability of products (boycott) and on the ability to obtain licences to operate.


“Reporting” biodiversity and societal responsibility of the companies

A major part of extra-financial rating agencies’ work drives them to study “sustainable development” reports and other documents. At first sight, data on biodiversity is feeble information in these reports. Yet, biodiversity is the basis for sustainable development; there is no possible sustainable mankind well-being without the preservation of biodiversity and its capacities for evolution. There will be no economical activities without the capacity to maintain services done by the nature. A group of international references, from Iso 26000 guidelines to UN texts, notably the text of the last APA(3) pro-tocol of the Convention on biological diversity, encourages companies to take biodiversity issues into account, to exchange with the interested stakeholders and debrief them on their actions. The new CSR program of the Europe-an Commission acknowledges the multidimensional nature of CSR and talks about biodiversity. The Commission announced a legislative bill on transparency of the social and environmental information given by companies of every sector and the search for a common method based on the analysis in life cycles. 2500(4) European companies are said to already publish social and environmental information, 42 000 could be implicated. In France, the Grenelle laws(5) have widened the perimeter of companies asked to produce a sustainable develop-ment report (the initial obligation came from the French law : New Economical Regulation of June 16th 2011, arti-cle 116 integrated to article L225-102-1 of the French Business Code, with no specific mention of biodiversity). The decree under the Article 225 of the Grenelle 2 law was released on April 26, 2012 extending companies’ obli-gation regarding environmental and social reporting. By taking these issues into account into the companies’ management, by improving the information ac-countability and the company rating, by exchanging more with society and stakeholders, elements will be set to build more ambitious actions on one hand and set up the undertaken efforts acknowledgement sys-tem that companies need on the other hand. Choices of infrastructure, but strengthens those measures that are conducive to promoting dialogue in the public debates that will ensue.

“Avoid, reduce, compensate”

Compensation in terms of biodiversity is now regularly in the news or in the debates and it deserves to be ex-plained. As soon as a business actor has to undertake a construction project or a work operation that creates arti-ficialisation of arable or natural land, it can face a final loss of biodiversity whose effects, in reality, can only be limited. This is in contradiction with the idea of compensation, which leaves to suppose wrongly that biodiversity would be composed of interchangeable elements. From an ethical point of view, compensation can not give a license to destroy. Two phases in a row should be reached a minima for any work project or activity likely to consume or degrade non artificialised places: • Seek the existing infrastructures’ optimisation first, this can be done regarding urban public transporta-

tion lines, and justify the choices made towards it • Integrate “authentic” compensation elements as fixed, consisting in a re-naturalisation of built and arti-

ficialised spaces: the reclamation of industrial and commercial wastelands, the removal old and unused infra-structure.

The article 230 of the law Grenelle 2, reforming the impact study, does not stipulate the accomplishment order of the three steps, avoid-reduce-compensate, for which Humanité et Biodiversité, must continue a chronologi-cal succession and must participate in an “iterative and progressive approach”. Compensation must remain the last resort. Ideally, we must validate what has been done, step by step, for every single avoid-reduce-compensate functionality and go to the next step, but only once you have proved that the previous step has been led correctly. This “step by step” appreciation must bring together the stakeholders, as the best way to share and give credit to your project. Reduction, less supervised than shunning and compensation, is often the weakest link of the “ERC” sequence and thus must be improved. A support to the development of a professional field for eco-nomical engineering likely to develop new techniques and new processes, is essential to ensure less impact on life. Besides, compensation must not be the condition for public policies’ implementation, nor must it be their substi-tute. Ensuring permanence of compensation measures by using reassuring land tools and regulatory measures is a sine qua none condition for the success of the ERC triptych’s last step. The follow-up of the disposal and its regulation in the hypothetic case of compensation market development must be done within an “appropriate framework” (CAS report, Chevassus-au-Louis, p.333).

3. Acces to resources and advantages share, October 2010 4. Brussels, on the 2011.10.25, COM(2011) 681 final Communication of the Commission to the European Parliament, to the Council, to the European social and economical Commitee and to the regional Commitee : CSR : A new strategy of the EU for the 2011-2014 period.» 5. Grenelle Round Table on the Environment. The first of these was Law No. 2009-967 of 3 August 2009 on the timetable for the implementation of the Grenelle Round Table on the Environment (Grenelle I). The second, law No. 2010-788 of 29 June 2010 on the national commitment to the environment (Grenelle II) does not provide any additional information on investment programmes or choices of infrastructure, but strengthens those measures that are conducive to promoting dialogue in the public debates that will ensue.


Legal security

Companies have to comply with environmental regulations, all the more if they are operating in zones considered sensitive in terms of biodiversi-ty (IUCN protected areas, natural or cultural sites identified by the UNESCO World Heritage Conven-tion or wetlands identified in the Ramsar Conven-tion). Those who fail may be subject to fines, obligations of restoration or face withdrawal of their license to operate. • British Petroleum(3)(BP): Following the Deep-

water Horizon spill in April 2010, the U.S. Justice Department is investigating whether BP and other companies responsible for the spill violated environmental laws such the Clean Water Act, the Migratory Bird Treaty Act and the Endangered Species Act. In addition, the Departments of Environmental Quality of Louisiana and Mississipi have filed suits against BP for alleged violations of several states environmental status and to seek pen-alties for the damages to wildlife resulting from the spill. In response, BP committed to invest USD 500 million to study and monitor the long-term effects of the oil spill and its potential impacts on the environment and human health.

Reputation Companies failing to address their impacts on biodiversity or using processes having an impor-tant negative impact on ecosystems may face campaigns from NGOs that could in turn have an impact on sales volume, ability to win bids or gain shareholders’ trust. • Nestlé(4): Nestlé has faced criticism from

Greenpeace, for having used palm oil which does not come from sustainable sources. The 2011 AGM of Nestlé was disrupted by the protest of NGO over the company’s use of palm oil from unsustainable source. Nestlé has taken corrective actions to address share-holders’ critics. The company has committed to use only certified (both Green Palm certifi-cates and segregated palm) sustainably sourced palm oil by 2015.

• Marine Harvest ASA(5): In April 2010, several NGOs have launched campaigns targetting Marine Harvest in Finland, Canada and Chile. Critics cite the negative impacts of open-net cages on local species. They point to the de-vastation of vital wild salmon runs by es-caped Atlantic salmons (an invasive species) on British Columbia’s coast. In response, the company has engaged into a partnership with a local NGO, to limit and reduce its impacts on local biodiversity.

Examples of Controversies

3. Energy sector, rated in 2012/02 4. Food sector, rated in 2011/07 5. Food sector, rated in 2011/07 6. Food sector, rated in 2011/07

Examples of positive impact on operational efficiency

For certain sectors, the durability of ecosystems services is a condition for the viability of their opera-tions, as natural cycles provide their basics raw materials. In this respect, some companies appear to have adopted an approach aiming to ensure the durability of their business.

• Danone(6) ‘s approach to protect groundwater aims to ensure the long-term viability of this re-source. In France, the company has a partnership with the Association for the protection of the Evian mineral water impluvium (APIEME) to protect the Evian local springs and similar partnerships with associations in other spring locations.


Overall Performance Analysis I. Method and Evaluated Sample

A company’s commitment has been assessed on its relevance with regards to each sector’s specific impact. As example, in the Heavy Construction sector, companies are expected to identify the follo-wing impacts: • Loss, degradation and fragmentation of ecosystems and habitats on operation sites and in areas

surrounding operations • Impact on populations' dynamics (e.g. animals breeding, feeding, reproducing behaviours) • Soil erosion Companies’ cooperation with relevant stakeholders when identifying impacts has been taken into ac-count.

1. The Method

Comprehensiveness of Commitment

The efficiency of implemented measures has been assessed on three elements: • The managerial tools allocated to integrate

biodiversity in the management of opera-

tions. For all sectors, Vigeo assesses to which extent the protection of biodiversity has been integrated in the company’s envi-ronmental management processes. To iden-tify their impacts at global level and imple-ment efficient impacts reduction systems, companies can take the following measures:

- Environmental impact assessments; - Training of relevant managers and employees on biodiversity; - Relevant biodiversity management guidelines; - Monitoring of biodiversity indicators; • The local measures taken to protect biodi-

versity on operation sites. Companies have been assessed on means implemented to re-duce their impacts at local levels. These mea-sures are specific for each sector. As an

example, in the Heavy Construction sector, expected measures include:

- Creation of new habitats, buffer areas for relocation of disturbed species during operations - Creation of deviation for migratory paths - Adaptation of the operations schedule so as to minimise disturbance to wildlife - Reduced use of pesticides and herbicides (during motorway construction and main tenance) - Vegetal species transplantation Land restoration programmes and/or habitats recreation in surrounding areas af ter operation • The perimeter of operations covered by

local measures to protect biodiversity.

Companies have been assessed on the share of sites covered by measures to reduce their local impacts on biodiversity.

Efficiency of Implemented Measures


The average score for all sectors is limited (34,5/100) and conceals heterogeneous perfor-mances. Companies’ average level of commitment towards the protection of biodiversity is limited for all sectors except for the Building Materials sector. In the Building Materials sector, all companies provide relevant information on their efforts to

reduce their impacts on biodiversity and 50% of them show a good level of engagement in this respect.

Average score for all sectors: 34,5/100

1. Sector benchmark

II. Performance analysis

Nine European sectors, gathering 127 companies having important impacts on biodiversity have been assessed on the management of their impacts on biodiversity. These sectors are: • Oil Equipment & Services • Beverage • Food • Energy • Heavy Construction • Mining • Electric & Gas Utilities • Tobacco • Building Materials

2. The evaluated sample

Companies’ results have been assessed on two elements: • The trend of indicators of biodiversity. This question aims to assess companies‘level of reporting

on their own impacts on biodiversity as well as the effective trend of these impacts. • Stakeholders’ feedback. This question analyses whether companies have been subject to stake-

holders’ allegations, complaints or legal proceedings regarding their impacts on biodiversity. It also analyses any positive feedback from stakeholders in this respect.

Results with regards to biodiversity protection


b. Overview

Commitment towards biodiversity protection

Company name Sector

1. Anglo American Mining

2. Iberdrola Renovables S.A. Electric & Gas Utilities

3. Terna Electric & Gas Utilities

4. British American Tobacco Tobacco

5. Carillion PLC Heavy Construction

6. Danone Food

7. Bonduelle Food

8. Royal Dutch Shell Energy

9. Lonmin Mining

10. Heidelberg Building Materials

11. Rio Tinto Mining

a. 11 best performers

2. Relevance of companies’ commitment

The Energy, Beverage and Oil Equipment and

Services sectors show the weakest performances. • As for the Oil Equipment and Services sec-

tor the extremely low level of reporting on this issue is the main factor of explanation. More than 58% of the companies implicated do not provide substantive reporting on the issue.

• In the Energy sector, despite a higher rate of

reporting, performances are hampered by the

high number of incidents and controversies (one third of the companies face allegations), the limited coverage of measures in place and the lack of reporting on biodiversity indica-tors.


Companies’ ability to identify their impacts strongly varies from one sector to another. The two best performing sectors show a high lev-el of reporting in this question: 100% of compa-nies in the Tobacco and Building Materials sec-tors disclose a commitment towards biodiversity protection. In the Building Materials sector, 60% of the com-panies have identified their main impacts. In the Tobacco sector, only one company has identified all its relevant impacts, while the two others dis-close only a general commitment. The high aver-age score obtained by this sector can therefore be considered as partly due to the low number of companies it entails.

For half of the sectors under review, (Mining, Electric and Gas utilities, Food, Heavy Construc-tion), a majority of companies have identified on-ly part of their impacts or disclosed only a gen-eral commitment. • As an example, in the Mining sector, while

84% of companies have disclosed a commit-ment, only 28% of them have identified the majority of their impacts.

c. Performance per Sector

The score of 33,9/100 reflects an overall limited level of commitment. • 74% of the players have published a commitment to protect biodiversity, this subject is now part of

companies’ common reporting. • However, only 25% of them have identified the majority of their impacts on biodiversity. • Other companies tend to communicate either a very general commitment towards biodiversity pro-

tection, or a commitment addressing only part of their impacts.


Average score « relevance of commitment to protect biodiversity »


Efficiency of means in place to protect biodiversity


Overall, companies show a slightly higher level of reporting on this issue: 85% of them have pub-lished relevant information on their efforts to mitigate their impacts on biodiversity. However, only 31% of them show good performances in this respect.

Company name Sector

1. British American Tobacco Tobacco

2. Rio Tinto Mining

3. Xstrata Plc Mining

4. Anglo American Mining

5. Iberdrola Electric & Gas Utilities

6. Imerys Building Materials

7. Lafarge Building Materials

8. Lonmin Mining

9. Endesa Electric & Gas Utilities

10. Holcim Building Materials

a. 10 Best Performers

3. Efficiency of measures in place

In the least performing sectors, lack of reporting accounts for substandard scores and only leaders have identified the majority of their impacts. • In the Oil Equipment and Services sector,

only 25% of companies disclose a commit-ment to protect biodiversity and none of them have identified their main impacts.

• In the Beverage sector, 33% of companies

have not disclosed any commitment and only one of them has identified its main impacts.


The adequacy of measures in place to protect biodiversity strongly varies upon sectors. Compa-nies in the Tobacco, Building Materials and Mining sectors show the highest level of engage-ment. • In the Building Materials sector, 70% of com-

panies appear to allocate efficient measures to the protection of biodiversity.

• In the Mining sector, this is the case for 50% of them.

On the opposite, the Beverage and Oil Equipment and Services sectors show extremely low levels of engagement: • In the Oil Equipment and Services sector 58%

of companies do not report on their efforts to protect biodiversity.

Other sectors show limited performances : • The level of information varies from 75% in

the Food industry, to 88% in the Energy and Electric and Gas utilities sectors.

• While almost 60% of actors show good perfor-mances in the Electric and Gas Utilities sec-tor, this is the case for only 5% of them in the Energy sector.

The implementation score is composed of

three elements:

• The managerial tools allocated to integrate biodiversity in the management of opera-tions.

• The local measures taken to protect biodiver-sity on operation sites.

• The geographical perimeter of operations covered by local mitigation measures.

Average score "efficency of means to protect biodiversity"


c. Performance per sector

The level of integration of biodiversity in the management of operations strongly varies upon sectors:

Integration of biodiversity in the management operations

The overall level of reporting on companies’ ef-forts to integrate biodiversity in the management of their operations is weak: only 68% of them communicate on the subject. Among measures implemented, the most recur-ring one is the realisation of environmental im-pact assessments. These are reported by

• 66% of players in the Energy sector, • 75% in the Heavy Construction sector, • 85% in the Electric and Gas Utilities sector. It is worth mentioning that these assessments are mandatory. Systems to integrate biodiversity in the manage-ment of operations, such as biodiversity manage-ment guidelines, the monitoring of indicators and training of relevant employees on biodiversity issues are, in most sectors, only mentioned by a minority of companies. The ability to go beyond legal requirements and implement group-wide management tools for biodiversity can therefore be considered as an element of differentiation.

Integration of biodiversity in the management of operations

b. Overview

A focus on local measures allows the reduction of companies’ impacts at site level. However, to ensure the comprehensive reduction of risks linked to biodiversity, it seems necessary to integrate these issues directly into the mana-gement of operations by evaluating operational impacts on biodiversity, tracking the evolution of affected ecosystems, defining procedures for pro-

tecting ecosystems and distributing these to the appropriate teams. In general, companies’ performance at both the local and management level is limited and the geographical scope of measures undertaken to reduce impacts on the site level reveals, in most cases, significant room for improvement.


d. Reduction of impacts at local level

Overview

Companies tend to communicate more on mea-sures in place to reduce their impacts at local level that on their efforts to integrate biodiversity in the management of their operations. 80% of them provided relevant information on their efforts to protect biodiversity at local level. However, most players appear to have allocated measures adressing only parts of their impacts on ecosystems.

Reduction of impacts at local level

Performance per sector

Good scores are observed in the Building Mate-rials, Tobacco and Electric and Gas Utilities sectors. • 70% of players in the Building Materials sec-

tor have implemented relevant measures to integrate biodiversity in the management of operations, while they are 67% in the Electric and Gas Utilities sector.

The Mining, Energy and Heavy Construction sectors show limited performances. In these sectors, only a minority of companies have implemented relevant measures: they are

only 39% in the Energy sector, 43% in the Mining sector and 25% in the Heavy Construction sector. In the Oil Equipment and Services, Food and Be-verage sectors, performances reflect the lack of communication of about 60% of the players.



e. Perimeter of local reduction measures

Overview

The level of integration of managerial tools to reduce impacts at site level highly varies upon sectors. • In the Tobacco, Building Materials and Mining sectors, a majority of companies appear to have

allocated relevant resources to reduce their impacts at site level. • The level of reporting is extremely low in the Energy and Oil Equipment and Services sectors,

where less than 50% of companies report on such measures. One common trend appears to be the partial scope of issues covered by companies’ efforts. • In the Heavy Construction sector, the loss or degradation of ecosystems and habitats is addres-

sed by a large majority of companies via the creation of new habitats for relocation of disturbed species but only one of the implicated companies reports on its efforts to reduce the use of pesti-cides or herbicides during construction and maintenance of transport infrastructures.

• In the Food and Beverage sectors, only one third of companies implicated communicate on mea-sures to prevent GMO cross contamination.

31% of the players do not report on the share of their operations covered by measures to reduce their impacts at site level. When this information is disclosed, the diffusion of these measures appears limited, as only 23% of companies declare that a majority of sites are covered by means to reduce their impacts at site level.

Scope of local reduction measures


The geographical diffusion of means in place to reduce impacts is highly variable among sectors, although a majority of them show limited levels of diffusion. The Building Materials sector outperforms oth-ers. In this sector 80% of companies indicate that they have implemented these measures in a ma-jority of sites. In the Mining sector, 50% of companies declare that at least a majority of their sites are covered by biodiversity protection measures. In other sectors information on the diffusion of means allocated at site level appears either to be lacking for a majority of companies or to reveal limited geographical coverage.

• In the Electric and Gas Utilities sector, only one third of them declare that these measures cover more than 50% of concerned sites.

• In the Beverage and Oil Equipment and ser-

vices sectors, a majority of companies do not disclose information on the diffusion of these measures.

a. Best Performers

4. Results

Company name Sector

CRH plc Building Materials

RWE AG Electric & Gas Utilities

Bouygues Heavy Construction

Iberdrola Electric & Gas Utilities

Imerys Building Materials

Lonmin Mining

Iberdrola Renovables S.A. Electric & Gas Utilities

Terna Electric & Gas Utilities

CGG Veritas Oil Equipment & Services

A2A SpA Electric & Gas Utilities

b. Performance per sector


Result scores are rather homogeneous. Perfor-mances are limited in all sectors. They result from a limited number of allegations and a weak ability to provide indicators on biodiversity pro-tection. • In all sectors except the Building Materials,

Electric and Gas Utilities and Tobacco sec-tors, less than 10% of companies publish rele-vant indicators on biodiversity protection.

• The average share of companies facing alle-gations is 20%. This share is null in the Beve-rage and Oil Equipment and Services sec-tors.

• The Building Materials sector shows the highest average performance: in this sector, 30% of companies have disclosed relevant

indicators regarding the state of biodiversity on their operations. In addition, the sector shows one of the lowest rate of allegations: 10%.

• The Energy sector stands as laggards. Com-panies in this sector show a weak level of dis-closure of indicators related to biodiversity. In addition, the share of companies facing controversies (33%) is the second highest among the nine sectors under review.

Average result score 35,1/100

Only 25% of companies have published relevant indicators on biodiversity protection. Among them, only 2% report on indicators on the state of biodiversity on their operations.

In none of the sectors under review, more than one third of companies has been able to provide biodiversity indicators. The Building Materials, Tobacco and Electric and Gas Utilities sectors show similar rates of around 30%, significantly higher than other sec-tors. As for the Tobacco sector, this share is par-tly explained by the little number of companies (three) included in this sector.

Indicators on biodiversity protection

c. Indicators on biodiversity: a weak level of disclosure


A correlation between the integration of biodiversity in the management of operations and the

ability to provide relevant biodiversity indicators ?

At individual level, the share of companies disclosing a relevant indicator is clearly much higher (73%) among companies displaying advanced scores in the question on measures implemented to ensure the integration of biodiversity in the management of operations. Companies that have implemented rele-vant measures to identify, monitor and limit their impacts on biodiversity may indeed be in better ca-pacity to publish the results of their monitoring efforts.

Sector Share of companies publishing

an indicator of biodiversity Beverage 0,0%

Energy 5,5%

Mining 30%

Heavy Construction 6,3%

Food 6,3%

Oil Equipment & Services 8,3%

Electric & Gas Utilities 29,6%

Building Materials 30,0%

Tobacco 33,3%

Score “integration of biodiversity in

the management of operations” Share of companies disclosing an

indicator of biodiversity Limited score (77 companies) 10% Good score (39 companies) 26% Advanced score (11 companies) 73%

Score “integration

of biodiversity in the

management

of operations” Beverage 12

Energy 38,6

Food 18,5

Heavy Construction 33,4

Oil Equipment & Services 18,3

Tobacco 43,3

Electric & Gas Utilities 52,8

Mining 47,2

Building Materials 58,5

Score “indicators of

biodiversity”

0

1,7

1,9

1,9

2,5

10

11,3

15,4

19


d. Stakeholder’s feedback

Overall, 20% of the companies have faced an allegation during the period under review. This rate is however unevenly shared among sectors.

Sector share of companies facing

allegations

Oil Equipment & Services 0%

Beverage 0%

Building Materials 10%

Food 18%

Heavy Construction 19%

Electric & Gas Utilities 22%

Energy 33%

Tobacco 33%

Mining 37%

The four sectors where companies appear to have allocated the most efforts to integrate biodiversity in the management of operations are also those showing the highest level of reporting of “indicators of biodiversity”.

The Oil Equipment & Services and Beverage sectors do not count any company facing allegations. On the opposite, more than one third of companies in the Mining, Tobacco and Energy sectors have faced controversies. An inverse correlation between the occurrence of allegations and the leadership and implemen-

tation scores?

In the table below, companies’ performance as regards the comprehensiveness of their commitment and efficiency of implemented measures is calculated for two groups: companies facing allegations and companies which do not face allegations.

Average score “relevance

of commitment” and “efficiency of

measures”

Companies facing allegations (26) 54,3/100

Companies which do not face allegations (101)

28,9/100


The Oil Equipment and Services and Beverage sectors where none of the companies face allegations are those showing the lowest level of commitment. Among the three sectors displaying the highest score, the Mining and Tobacco sectors are those fa-cing the highest rate of allegations. This may reveal stakeholders’ (NGOs or public authorities) role in increasing companies’ level of com-mitment towards the protection of biodiversity. In this respect, companies appear to have a defensive approach to biodiversity protection.

Share of companies

facing allegations

Oil Equipment & Services 0%

Beverage 0%

Food 18%

Energy 33%

Heavy Construction 19%

Electric & Gas Utilities 22%

Mining 37%

Tobacco 33%

Building Materials 10%

Average score

“comprehensiveness of

commitment” and

“efficiency of measures” 12,2

21,6

28,9

27,9

33,3

44,5

47,7

56,3

56,7

Overall, companies facing allegations appear to perform fairly better in terms of leadership and imple-mentation scores than companies which do not face any. In the table below, sector performance as regards the comprehensiveness of companies’ commitment and efficiency of implemented measures is compared to the share of companies facing allegations in each sector.


Focus on Three Key Sectors

Food

Companies’ impacts on ecosystems depend on their types of activities: • Agriculture: erosion of soils, negative effects on population's dynamic and destruction of habitats

linked to intensive agriculture techniques, ecosystems’ modification, impacts linked to the use of pesticides and fertilisers

• Fishing: loss of aquatic species and destruction of aquatic habitats linked to unsustainable fishing • Production of bottled water and beverages with high water contents: excessive withdrawal rate

of groundwater, reduction of aquifers/water table • Production of Biofuels: destruction of ecosystems linked to the conversion of land to agriculture • Use of GMOs in agriculture: direct natural species contamination, indirect negative effects on

biotops and natural species • Animal production: contamination of land and water by nitrates or antibiotics, destruction of eco-

systems linked to landclearing Universe under review: 16 European companies(7)

• Despite its high reliability on services pro-vided by ecosystems, the Food industry – with an average score of 29,5/100 does

not appear proactive in terms of the mana-

gement of its impacts on biodiversity. The sector ranks indeed sixth out of the nine sec-tors evaluated on this issue. The implementa-tion of relevant measures to protect biodiver-sity seems to be the main weakness of this sector. More precisely, the geographical scope of implemented measures is often limi-ted, as companies report on measures cove-ring only some specific sites, countries or activities.

• Companies in the Food sector show a high

level of heterogeneity with regards to the

management of their impacts on biodiver-

sity. While two third of players obtain subs-tandard scores that reflect a poor level of re-porting on the issue, four leaders show a good level of awareness of their impacts and the willingness to report on a majority of them.

• The sector’s various impacts on biodiversi-ty are adressed in an heterogeneous man-

ner: while most companies report on re-sources allocated to sustainable agriculture and the preservation of water resources, rai-sing issues such as GMO cross contamination or sustainable biofuel production appear less tackled.

• A majority of companies seem to have

identified the link between the protection

of biodiversity and their reputation risks. Measures likely to improve reputation – such as adhering to international initiatives or using internationally recognized certification schemes for their products (e.g. Organic cer-tification) – are frequently observed.

• However, few companies seem to be willing

to tackle the operational risks associated

with biodiversity protection. Measures such as actions to prevent soil erosion and degra-dation or to protect land and aquatic ecosys-tems are much less mentioned by companies.

7. Date of Vigeo review : 2011/07

2. Key Findings

1. Main Impacts on Biodiversity Identified for the Food Sector


3. Detailed performance analysis

Protection of biodiversity

Compared to other sectors, the food industry, with its average score of 29,5/100, shows an overall very limited level of reporting on biodiversity issues. This average conceals, however, very heterogene-ous scores. While almost two third of the players show a very poor level of reporting on their efforts to protect biodiversity, four leaders show a high level of engagement towards this issue.

Food: average score & best performance for Leadership, Implementation and Results


Half of the sector players do not publish any rele-vant information on their commitment towards the protection of biodiversity. Among companies that have published infor-mation, 75% have identified the majority of their impacts. Bonduelle and Nestlé have identified all major issues at stake for their operations. The issue of sustainable agriculture has been identified by all companies concerned.

On the other hand, the prevention of GMO con-tamination is only mentioned by Nestlé and Da-none, while the prevention of negative environ-mental impacts from biofuels does not appear in the companies’ reporting.

Integration of biodiversity issues in the man-

agement of operations

62% of companies do not provide any information on their efforts to integrate biodiversity in the management of their operations. Environmental impact assessment (EIA) or risk mapping is the most recurring measure probably because it is a legal obligation in Europe. The least mentioned measures are training on biodiversity (only Marine Harvest ASA reports on such courses) and the monitoring of biodiversity indicators. Both the delivery of trainings and the monitoring of relevant indicators allow a follow up and miti-gation of impacts on biodiversity at group level. The fact that these are barely mentioned may reflect an area for improvement in this respect. Integration of biodiversity issues at local level

Companies allocate more means at site level, which may reflect a choice to work on specific sites or specific types of initiatives. Sustainable Agriculture:

A majority of companies have deployed some means to promote sustainable agriculture. Bon-duelle, Associated Brit Foods, Nestlé and Unilever show the most comprehensive reporting in this respect.

The most recurring means are the reduction of external inputs and the use of independent certi-fication schemes, such as the Roundtable on Sus-tainable Palm Oil (although only a few players use the “Segregated supply chain certification” for which 100% of the palm oil can be traced from certified plantations), Forest Stewardship Council (FSC), the UTZ and Rainforest Alliance Certifica-tions. The popularity of this last measure may reflect companies’ will to meet a growing de-mand for certified products. Other increasingly popular measures include the promotion and development of organic farming and the offer of training to farmers on environ-mental friendly practices and efficient use of ex-ternal inputs. On the other hand, only a minority of companies report having taken measures to prevent soil ero-sion, to prevent poverty and habitat fragmenta-tion and to assess the total water footprint of their product across the value chain.

Best performer Unilever

Leadership

Implementation


Sustainable fisheries

Only six companies are implicated in this ques-tion. Half of the concerned companies have set limits on total fish catches. Some of them also cooperate with external stake-holders and are involved in certification schemes. For example, Marine Harvest cooperates with the Marine Stewardship Council (MSC) chain of custo-dy certification and limits the use of antibiotics, fungicides, etc. Protection of groundwater

Only two companies are implicated in this issue: Nestlé and Danone. Both companies have a comprehensive approach to protect groundwater. They report on measures such as the preservation of sustainable rates of water extraction, audits and measures of water quality. They also mention assessment of the spatial distribution of resources and measures to regulate polluting activities. Moreover both have signed partnerships with third parties to promote environmental friendly agriculture and Danone participates in international initiatives for conser-vation of wetlands and water resources. The funds allocated by ‘Danone for Nature’ enable the company to help preserve watersheds in Africa (Casamance and Congo) and in India (Gange). GMO cross contamination

This question concerns twelve companies. A large majority of them did not provide any relevant information on this issue. Only 33% report on measures such as traceability and labeling sys-tems.

Biofuels

Eight companies have been assessed on this is-sue. A large majority did not provide any infor-mation. Only Associated Brit Foods and Suedzucker appear to have allocated some measures to ensure a sustainable production of biofuels. They state minimizing the use of exter-nal inputs (fertilisers, chemicals, etc), protecting soil from erosion and preventing soil poverty from single-crop farming. Sustainable animal production

Eight companies are implicated in this issue. Half of them did not communicate on their efforts to ensure sustainable animal production. However, most companies which report on this issue have allocated relevant resources to promote sustaina-ble animal production. They report ensuring ani-mal well-being and appropriate feeding and rais-ing awareness among farmers on sustainable ani-mal production. In addition, two companies are involved in international initiatives (such as the Greenpeace moratorium on using cattle from ille-gally deforested areas). Scope covered by these measures

The efficiency of these measures is weakened by their limited coverage. Most companies have im-plemented measures in only some specific sites or countries or for specific products (such as dairy products or timber). This may reflect a will to focus on some specific sites or product lines.

Results

Mixed results reflect both a weak ability to pro-vide indicators and a relatively low occurrence of allegations. Reporting and trend on biodiversity indicators

Only one company out of 16 publishes indicators on biodiversity. Marine Harvest reports on several

indicators, including fish escape, quantity of anti-biotics and antifungal used, stocking density per site. However, these indicators relate to the com-pany’s impacts on biodiversity rather than to the state of biodiversity in its areas of operations.


For example, Marine Harvest does not disclose data on incidents and death of mammals and predators linked to its operations. Allegations

During the period under review, three companies have been involved in allegations regarding the impacts of their operations on biodiversity: • In April 2010, several NGOs have launched

campaigns targeting Marine Harvest in Fin-land, Canada and Chile. Critics cite the nega-tive impacts of open-net cages on local species. They point to the devastation of vital wild salmon runs by escaped Atlantic sal-mons (an invasive species) on British Colum-bia’s coast. In response, the company has engaged into a partnership with a local NGO to limit and reduce its impacts on local biodi-versity.

• Nestlé has faced criticism from Greenpeace, for having used palm oil which does not come from sustainable sources. The 2011 AGM of Nestlé was disrupted by the protest by an NGO over the company’s use of palm oil from unsustainable source. Nestlé has taken corrective actions to address share-holders’ critics. The company has committed to use only certified (both Green Palm certifi-cates and segregated palm) sustainably sourced palm oil by 2015.

• After an investigation by the Australian De-

partment of Environment and Climate Change, Associated Brit Foods was con-demned to pay AUD97,000 in July 2010 be-cause it had poured animal fat and oil into a river.


Energy

Companies of the Oil and Gas exploration and production segment operate in some of the world's most sensitive environments: deserts, mangroves, wetlands, tropical rainforests and frozen tundra. Their main impacts on biodiversity include: • Ecosystem and habitat fragmentation and degradation due to land clearance and the exploration

survey process, • Soil erosion linked to the cut of trees, • Loss of ecosystems and habitats due to the opening up of previously inaccessible land to agricul-

ture and development, • Invasive species introduction or distribution due to ballast water rejection, during sea transporta-

tion activities. Universe under review: 18 European companies

• Despite its heavy impacts on ecosystems and the high level of scrutiny of environmental NGOs on its operations, the sector shows a weak level of awareness towards the pro-

tection of biodiversity. This is revealed by the average score of 27/100. This perfor-mance is weighed down by the silence of 44% of actors on this issue.

• Companies’ average level of commitment

is low: less than 20% of the sector players have identified the majority of their impacts on biodiversity and only one of them has pu-blished a commitment to not operate in pro-tected areas or sensitive zones in terms of biodiversity. It’s however worth mentioning that one leader engages with an international-ly recognized stakeholder.

• The sector’s main weakness lies in the

measures addressing biodiversity. As for the integration of biodiversity issues in the management of operations, most players do not appear to go beyond legal compliance. Only a minority of companies report on means allowing the mid-term follow-up of their impacts, and the improvement of inter-nal expertise.

• In terms of results, the low level of disclo-sure on biodiversity indicators may reflect

companies’ weakness with regard to the

follow-up of their own impacts. In addition, the high rate of companies facing allegations (33%) reveals the importance of the legal, op-erational and reputational risks linked to this issue. It may also reflect also the area for im-provement that remains as regard the sec-tor’s ability to mitigate these risks.

• Performances are however heterogeneous.

While a large majority of companies do not go beyond compliance levels, a few players appear to have identified their operational and reputational risks and to develop con-sistent policies, management system and im-pact reduction measures.

1. Main Impacts on Biodiversity Identified for the Energy Sector

2. Key findings


3. Detailed performance analysis

Protection of biodiversity

With an average score of 27/100, the energy sector is among the three weakest performers of the 9 sectors under review.


Companies’ reporting on means addressing bio-diversity issues is heterogeneous. About 12% of the companies have not pub-

lished any information on their efforts in this respect, which draws the sector’s average score down. Integration of biodiversity issues in the man-

agement of operations

A majority of companies report only on limited measures to integrate biodiversity issues in the management of their operations. Regarding the type of measures in place, environ-mental impact assessments and/or risk mapping is mentioned by all companies reporting on this issues. Only a few players appear to allocate measures allowing the follow-up of the company’s global impacts (monitoring of indicators of biodiversity), the development of internal expertise (training of employees and site managers on biodiversity) and the implementation of a common manage-ment system (implementation of biodiversity management guidelines).


More than 25% of the sector players do not report on any of the measures in place to reduce their impacts at site level. Among others, the great majority communicates only on measures ad-dressing part of their impacts on biodiversity. The protection strategies for endangered species and land rehabilitation programs during and/or after operations have been mentioned by more than 33% of the companies. It’s worth mentioning that land rehabilitation is an obligation for com-panies in the sector. Other measures (creation of new habitats, buffer areas for relocation of disturbed species during extractions operations, green belts development around extraction sites, limitation of pesticides used for land clearance) are mentioned only by a few players. The scope of implementation of these means is limited. Less than 50% of the sector players have implemented measures to reduce their impacts at a majority of sites and none of them declare that all the company’s sites are covered by these measures.

Best performer Total

Best performer Royal Dutch Shell Leadership

Companies’ level of commitment is weak and re-veals a high level of heterogeneity. Almost 45% of sector players do not publish any relevant commitment on this issue and only 15% of them have identified the majority of their

impacts on biodiversity.

Royal Dutch Shell (Shell) is the only company that discloses a "no go" policy, in which it com-mits not to operate in certain highly sensitive bio-diversity areas including UNESCO-designated World Heritage Sites. The company has also signed partnership agree-ments with external stakeholders such as the In-

ternational Union for Conservation of Nature (IUCN), Wetlands International and The Nature Conservancy. Impacts identified by the greatest number of companies publishing commitments are the loss, degradation or fragmentation of ecosystems and habitats during exploration and production and effects on sensitive species. On the opposite, im-pacts on populations’ dynamics and soil erosion have been identified by only a minority of compa-nies.

Implementation


Results are marked by a relatively high level of controversies and an extremely low level of dis-closure of biodiversity related indicators. Reporting and trend on biodiversity indicators

Only ENI states to have implemented a system to assess the impacts of its operations on ecosys-tems, species and habitats. The group has partic-ipated in an initiative with the World Business Council for Sustainable development and the In-ternational Union for the Conservation of Nature to define a method to assess the relationships between its activities and ecosystem services. . Allegations

One third of the companies face allegations for local biodiversity issues or due to severe acci-dents affecting ecosystems (BP, SOCO Interna-tional, Repsol, ENI, Total, Shell). Some examples of controversies include: • Controversies on projects : Shell is involved

in controversies pertaining to operations in the Arctic Sea. In May 2011, critiques from, among others, the Alaska wilderness league, on Shell's drilling plans in Artics were relayed by the press. Greenpeace also said that it was opposed to what Shell plans to do in the Arc-tic region.

• Severe accidents affecting ecosystems : Follo-

wing the Deepwater Horizon spill in April 2010, the U.S. Justice Department is investi-gating whether BP and other companies res-ponsible for the spill violated environmental laws such the Clean Water Act, the Migratory

Bird Treaty Act and the Endangered Species Act. In addition, the Departments of Environ-mental Quality of Louisiana and Mississipi have filed suits against BP for alleged viola-tions of several states environmental status and to seek penalties for the damages to wildlife resulting from the spill. In response, BP committed to invest USD 500 million to study and monitor the long-term effects of the oil spill and its potential impacts on the environment and human health.

• Incidents affecting local biodiversity : In Janu-

ary 2011, France Nature Environnement and the French National Association for the Pro-tection of Rivers (ANPER) accused GPN, sub-sidiary of Total, of polluting 13 kilometers of the Ancoeur rill through a leak from the com-pany's plant in Grandpuits. The NGO claims that the incident was provoked by a spill from the company's retention basin causing ammonium ions to pollute water and kill fish-es. In July 2012, GPN was recognized guilty and condemned to pay EUR 5,000 to France Nature Environnement and EUR 5,000 to the ANPER.

Results


• Loss, degradation or fragmentation of ecosys-tems and habitats (such as forests, reefs, wet-lands, karsts, etc.) due to extraction opera-tions.

• Impact on populations' dynamics, including

endangered species. • Soil erosion linked to the cut of trees, etc. • Impact on surface water and groundwater

because of flow diversions and water intake.

Building Materials

Universe under review: 10 European companies having quarrying activities(8)

• When compared to other sectors, the Building Materials sector shows a high level of aware-ness with regards to biodiversity issues, as revealed by the overall score of 52/100, which is the best performance among the nine sectors under review.

• Companies appear to be aware of the risks

linked to a lack of reporting on the subject or a poor management of their impacts, as shown by their overall willingness to com-municate on the subject: all companies have issued a public commitment to protect biodi-versity and report on their efforts to reduce their impacts.

• Companies’ efforts to mitigate the impacts of

their operations appear more convincing than in other sectors. A majority of players appear to focus both on the reduction of their im-pacts at the local level and on the implemen-tation of group-wide biodiversity manage-ment systems.

- The rate of companies reporting on efforts to monitor biodiversity indicators is high when compared to other sectors.

- The share of sites covered by impact reduction measures is also high or higher than other sectors, which might reflect the willingness to reduce the risks throughout their operations, as opposed to focusing on areas that may carry the most legal or reputational risks. •

are companies responsible for the protection of biodiversity? · 2020. 11. 13. · hubert reeves,...

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