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Are biodiversity concerns compatible with business models?

Business and biodiversity: a square peg in a round hole?

James Bowers, Chief editor at Polytechnique Insights
On April 12th, 2021 |
4 mins reading time
2
Business and biodiversity: a square peg in a round hole?
Sylvie Méléard
Sylvie Méléard
Professor at École polytechnique (IP Paris) and Senior Member of the Institut Universitaire de France
Denis Couvet
Denis Couvet
President of the Foundation for Research on Biodiversity and Professor at the Muséum National d'Histoire Naturelle
Sandrine Sourisseau
Sandrine Sourisseau
Doctor in Environmental Sciences at Veolia
Key takeaways
  • Today, tools exist to financially evaluate the services provided by ecosystems (such as carbon capture or flood protection), but some researchers criticise them for not going far enough.
  • Veolia has joined forces with the Institut Polytechnique and Muséum National d'Histoire Naturelle in the framework of the “Chair for Mathematical Modelling and Biodiversity”.
  • The company’s objective is to meet its target of carrying out diagnoses and action plans for 100% of its biodiversity-sensitive sites by the beginning of the 2020s.
  • The chair holders are in charge of creating realistic mathematical models capable of predicting the evolution of biodiversity according to certain parameters, such as climate change.

In the past, we have heard terms like the ‘price of nature’ being used to con­nect ecosys­tem ser­vices with the pri­vate sec­tor. Do you think this type of approach is need­ed for busi­ness­es to take bio­di­ver­si­ty into account? 

Denis Cou­vet. The term ‘price of nature’ is reduc­tive, even obso­lete. Cap­i­tal­ism has ignored nature because it is sim­pler that way. In order to take bio­di­ver­si­ty into account, we need much more than that. To under­stand the prob­lem, we need to dis­tin­guish at least three ways to quan­ti­fy the eco­nom­ic impor­tance of bio­di­ver­si­ty so that it can be: (1) mon­e­tised, (2) com­mod­i­fied and (3) financialised.

At the moment, only the first of these, mon­eti­sa­tion, is in play; some­thing that eco­nom­ics and ecol­o­gy have been doing for over 20 years. This ‘price of nature’ is a cal­cu­la­tion of ecosys­tem ser­vices like car­bon cap­ture or flood pro­tec­tion as a mon­e­tary val­ue. Assess­ing the val­ue of these ser­vices in dol­lars or euros pro­vides grounds for pub­lic action, can chal­lenge eco­nom­ic norms, and may help in deci­sion-mak­ing for com­pa­nies. But, even still, busi­ness­es don’t nec­es­sar­i­ly invest in these ser­vices per se. Instead, the mon­e­tary val­ue remains hypo­thet­i­cal, most often being used to antic­i­pate new trends in pub­lic opin­ion that could affect their competitiveness.

That being said, is it pos­si­ble to bring ecosys­tem ser­vices mod­els into businesses?

San­drine Souris­seau. Inte­grat­ing ecosys­tem ser­vices into a busi­ness mod­el is com­pli­cat­ed and high­ly del­i­cate. Cur­rent indi­ca­tors of bio­di­ver­si­ty are not sys­tem­at­i­cal­ly used to make deci­sions due to lack of knowl­edge and tools, which are ful­ly adapt­ed to busi­ness. Finan­cial indi­ca­tors such as oper­at­ing expens­es (cost for run­ning a sys­tem or ser­vice) are still much more influ­en­tial. Hence, why we need method­ol­o­gy and the right part­ners who can help us to bet­ter under­stand. Lead­ers are more or less sen­si­tive to these issues, but we are see­ing more and more objec­tives linked to bio­di­ver­si­ty inte­grat­ed into busi­ness strategies. 

At Veo­lia, we address the same lev­el of atten­tion and demands to our dif­fer­ent per­for­mances: eco­nom­ic and finan­cial, com­mer­cial, social, soci­etal and envi­ron­men­tal. As such, we make a pub­lic com­mit­ment on 18 per­for­mance indi­ca­tors, includ­ing the rate of progress of action plans to improve the envi­ron­men­tal and bio­di­ver­si­ty foot­print of sen­si­tive sites. Achieve­ment of these objec­tives will be audit­ed and mea­sured reg­u­lar­ly by an inde­pen­dent body. In turn, it will serve as the basis for the vari­able com­pen­sa­tion of Veo­li­a’s senior managers. 

How then does the “Chair of Math­e­mat­i­cal Mod­el­ling and Bio­di­ver­si­ty” con­tribute to these issues?

Sylvie Méléard. In terms of mod­el­ling bio­di­ver­si­ty, we are still in the stone age. Ecosys­tems are com­plex in the real sense of the word, there are a great num­ber of inter­ac­tions to take into account. Through the chair, we math­e­mati­cians make the­o­ret­i­cal mod­els, and the con­ser­va­tion sci­ence team from the muse­um adds con­text from the field.

We use mod­els such as what we call ‘com­plex adap­ta­tive sys­tems’, which are vast webs of small­er net­works that inter­act on a macro-lev­el. There are direct appli­ca­tions of these mod­els, such as plant-her­bi­vore or pol­li­na­tor-plant inter­ac­tions, in an ecosys­tem. Through this, we can get an idea of how species evolve – and co-evolve. Once we have devel­oped the­o­ret­i­cal mod­els, we can then apply them to oth­er cases. 

How does the inter­face between applied math­e­mat­ics and con­ser­va­tion biol­o­gy come together?

SM. We offer the biol­o­gists a the­o­ret­i­cal basis and they study a way to visu­alise it in the field. We can use those mod­els to study what hap­pens to an ecosys­tem if we change one para­me­ter: to see how species com­pete with one anoth­er for resources or observe the impact of a change in cli­mate, for exam­ple. We recent­ly devel­oped mod­els to bet­ter under­stand the impact of cli­mate on a pop­u­la­tion. Our research looks at this on mul­ti­ple scales, from the big­ger pic­ture down to the mol­e­c­u­lar lev­el to help bet­ter under­stand how changes will affect the system.

DC. As such, we can cre­ate an image of how humans inter­act with the ecosys­tem in a way that goes beyond just descrip­tion. The goal is to exam­ine the mech­a­nisms at place in bio­di­ver­si­ty by using math­e­mat­i­cal mod­els to express eco­nom­ic or eco­log­i­cal effects and their inter­ac­tions. One dif­fi­cul­ty is that the rhythms, space used, or envi­ron­ments of humans and bio­di­ver­si­ty dif­fer. Those who are financ­ing the future and depend on nature (so every­body) should know that. 

What the analy­ses show, in par­tic­u­lar mon­e­tary ones, is that we need to change our mind­set to focus on a nature-cen­tric approach. For exam­ple, cur­rent large-scale agri­cul­tur­al mod­els in the USA rotate corn and soy­bean crops each year. From a human-cen­tred stand­point, this may be a sim­ple, effi­cient agri­cul­tur­al tech­nique. How­ev­er, it is far from opti­mal in regard to bio­di­ver­si­ty – and there­fore nature – mean­ing poor sus­tain­abil­i­ty. Instead, a more eco­log­i­cal­ly sus­tain­able sys­tem would require rota­tion of dif­fer­ent crops each year for a dura­tion of clos­er to 10 or 20 years, mean­ing a shift in pro­duc­tion strategy.

How does Véo­lia, as a busi­ness, take on board research find­ings from the chair?

SS. Bio­di­ver­si­ty at Veo­lia is a pri­or­i­ty. The research chair out­comes can help us in sev­er­al ways towards our goal of inte­grat­ing bio­di­ver­si­ty into our strat­e­gy. Our objec­tive for 2020 was to have car­ried out a diag­no­sis and deployed an action plan in 100% of the sites iden­ti­fied as hav­ing a high bio­di­ver­si­ty stake. In this con­text, the chair can first help us to define and deploy rel­e­vant and oper­a­tional per­for­mance indi­ca­tors for the group.

In the future, we will need to obtain new mar­kets if we are to remain a leader; the chair helps us to define and pro­pose new ser­vices that are in line with bio­di­ver­si­ty. Also, sys­tem­at­i­cal­ly inte­grat­ing the poten­tial impact of projects locat­ed in or near nat­ur­al pro­tect­ed areas/endangered species into the risk analy­sis of invest­ment projects and quan­ti­fy­ing our foot­print on bio­di­ver­si­ty enable us to dif­fer­en­ti­ate us from our competitors. 

Solu­tions that are inspired and sup­port­ed by nature, which are cost-effec­tive, simul­ta­ne­ous­ly pro­vide envi­ron­men­tal, social and eco­nom­ic ben­e­fits. They pro­vide sus­tain­able, cost-effec­tive ways to achieve a green­er econ­o­my that is com­pet­i­tive and resource effi­cient. The metaphor of bio­di­ver­si­ty rep­re­sent­ed as a flow of mar­ket ser­vices for the well-being of human­i­ty is a dom­i­nant theme nowa­days in the dis­course of inter­na­tion­al orga­ni­za­tions, relayed by sci­en­tists and devel­op­ment actors.