ESG: World Wildlife Day 2024

Sunday, March 3rd is World Wildlife Day. In lieu of this, we’d like to take a moment to discuss the changing relationship between the corporate world and natural ecosystem.

As businesses engage in ESG disclosures such as IFRS S1 and S2, companies may be required to analyse their impact on natural ecosystems, biodiversity, deforestation, and oceans.

According to the WWF, the following species may become extinct by the end of the year:  

• Yangtze Finless Porpoise (only non-extinct species of river dolphins found in China)
• African Forest Elephant
• Vaquita (found in Baja California with an estimated population of less than 10)
• Javan Rhino (presently has an estimated population of approx 70)
• Hawksbill Turtle (found in coastal Mesoamerica, Eastern Africa, and Southeast Asia)

The reasons for being deemed ‘critically endangered’ species vary but tend to include illegal wildlife trade, loss of habitat and food supply, pollution, climate change, and reduced biodiversity. Conservation research has indicated that illegal wildlife trade and poverty are correlated.

Specifically, risk factors for wildlife crime include increased levels of acute shocks such as unemployment, decreased wage rates, poor access to education and health social networks, emotional distress, as well as a lack of access to essential services. As such, research indicates that poverty alleviation could positively contribute to biodiversity protection and conservation efforts.  

In late 2023, a joint INTERPOL-World Customs Organisation operation called Operation Thunder seized more than 300kg of ivory, thousands of turtle eggs, 30 tonnes of plants, dozens of big cat body parts and rhino horns, as well as primates, birds and marine species. Many of the flora and fauna trafficked globally are often transported in large shipping containers. The majority of wildlife trafficking is often linked to organised crime. In fact, environmental and wildlife crime are one of the most profitable crime sectors globally.

From a regulatory standpoint, the UN, after years of negotiations, agreed and passed the High Seas Treaty in Spring 2023 which is a global legal framework for the high seas that addresses climate change, biodiversity loss, and pollution. The EU, in particular, has an ambitious biodiversity strategy to put it on the road to recovery by 2030. In addition to conducting due diligence on suppliers, corporations should be aware that laws from the EU may be implemented that could potentially lead to enforceable regulations and civil liability which includes the recent Environmental Crimes Directive. Companies complying with an ESG framework may already be assessing and disclosing its impact on biodiversity.

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