Supplementary guidances on nature-related financial disclosures based on biomes

June 7, 2024
Sustainability in Business
Biomes are the types of ecosystems belonging to one of the four realms (land, freshwater, ocean, and atmosphere) around the planet. Biomes provide ecosystem services to species and inhabitants. To supplement the assessment using the LEAP approach, these additional guidances based on biomes are provided as there may be some specific circumstances particularly relevant for certain biomes.

Biomes of the planet

Biomes are the types of ecosystems belonging to one of the four realms (land, freshwater, ocean, and atmosphere) around the planet. The International Union for the Conservation of Nature (IUCN) maintains a taxonomy of 25 biomes known as the Global Ecosystem Typology (GET). Biomes are not exclusive to any single realms, and many span multiple realms. Examples of biomes include tropical and subtropical forests, which belongs to the realm of land realm, vegetated wetlands, which can be found in both land and freshwater realms, subterranean cave and rock systems, which crosses land, freshwater, and ocean realms, and marine shelf, which belongs in the ocean realm.

Biomes provide ecosystem services to species and inhabitants. The same type of biomes in different geographic locations are likely to provide similar ecosystem services. For example, tropical and subtropical rainforests, whether they are in India or in Brazil, both could offer water and biomass provisioning services and cultural services for recreational, spiritual or artistic purposes. They could also offer a number of regulating services such as soil and sediment retention, local climate regulation, and air filtration. Each type of biome could offer a different set of provisioning, cultural and regulating services.

To supplement the assessment using the LEAP approach, these additional guidances based on biomes are provided as there may be some specific circumstances particularly relevant for certain biomes.

Intensive land use systems - croplands, pasture lands, and plantations

The biome of intensive land use systems in one that intersects with many industrial sectors, including consumer goods, electric utilities and power generation, energy (oil, natural gas and renewable), food and beverage, forestry management, hospitality, infrastructure, and many others. The sub-biome of croplands, pasture lands and plantations includes all ecosystems shaped by intensive human cultivation activity. The biome of intensive land use systems also includes urban and industrial ecosystems, which will be covered in the next section.

For each Location where the business intersects with this sub-biome, the level of control of the interaction should be first considered. For example, does the business own, manage, or have significant operational control over value chain activities of the croplands, pasture lands and plantations, or does the business have only indirect connections to the biome?

The sub-biome’s most important impact on nature is the loss of natural habitat that occurs when land is converted to intensive cultivation use by human activities. Research projects that by 2050, a land area about twice the size of India will be converted to agriculture. Businesses should identify locations belonging to this sub-biome in the current operations and in near term, mid-term and long-term plans. Some part of the surrounding areas that may have been impacted when the land is converted to human use should also be included as the converted land will have residual impacts in nearby areas.

The sub-biome’s principle impact drivers on nature come from the agriculture and forest sectors. For example, agricultural intensification (e.g., mono-cropping) may lead to land/freshwater/ocean use change, which may lead to the use of land ecosystems as an impact driver. Pesticide use may lead to pollution or pollution removal, which may lead to soil pollutants (eco-toxicity) and water pollutants.

The croplands, pasture lands, and plantations provide many ecosystem services, from provisioning to regulating and cultural services. The provision of biomass, recreation-related services, and soil quality regulation are some of the services provided by intensive land use systems.

Since the conversion of natural habitat for intensive land uses is the biggest driver of terrestrial biodiversity loss, risks and opportunities in this biome have high social, economic and policy visibility. Engagement with local stakeholders, like communities and smallholder farmers, is particularly important for organisations operating in the intensive land-use systems biome. It provides insights and understanding of how ecosystems are interpreted locally and reduces the barriers to access potential circular and regenerative opportunities.

Intensive land use systems - urban and industrial use

Urban ecosystems include cities, towns, villages and any kind of human settlements and their associated infrastructure which has developed, evolved, and co-existed with nature for millennia. This sub-biome has grown exponentially in the last few hundred years, and this growth coincides with the rise of the industrial ecosystems with concentrated human activities in transforming, producing and distributing various products that support our modern lives.

A very large proportion of human impact on nature is within this biome. GHG emissions contributing to climate change and other forms of pollution are concentrated in these areas while ecosystem services of this sub-biome are to some extent limited when compared to those provided by other ecosystems. Thus, this sub-biome can be thought of as an “importer” of services and resources that are needed to support human population (in terms of water, food, energy, recreation, etc.). This sub-biome is also the key driver of economic productivity.

The land in this sub-biome include patches of different land uses (buildings, factories, mines, roads and other paved surfaces, transport, parks, gardens, etc.). The urban and industrial sub-biome is extending globally because of the combined effects of population growth and migration to urban areas. It is expected to expand by approximately 40% in the period from 2012 to 2050.

Some urban and peri-urban areas are essential for preserving biodiversity, despite their proximity to the city’s impacts. The conservation of nature and biodiversity in this sub-biome must be a combined policy effort across regional, cities, and companies, and communities who invest, operate, and live in the areas.

When assessing nature-related dependencies, impacts, risks and opportunities associated with this sub-biome, greenfield projects must take into consideration the loss associated with converting natural habitat to this sub-biome. Brownfield projects should, as much as possible, explore opportunities to restore natural habitats and benefits. Since there is a substantial demand for water resources in this sub-biome, this sub-biome can significantly contribute to the water-stress status of watersheds and water-based pollution in the surrounding area.

Examples of nature-related physical risks in the urban and industrial use sub-biome include changes to the supply of natural inputs (e.g., water stress and water scarcity), changes in the recreational value (e.g., aesthetic value of landscaping), and increased susceptibility to pest outbreaks and diseases. Transition risks, which could be very relevant for companies operating in this sub-biome, include changes in zoning regulations, limits in building codes, and management of stakeholder conflicts.

Opportunities to improve the state of nature in urban and industrial ecosystems are also present in this sub-biome. Many urban green spaces are poorly managed for biodiversity and ecosystem services. Restoring semi-natural ecosystems to these spaces would provide a range of benefits.

Freshwater biomes: Rivers and streams

This biome includes running water ecosystems and coastal estuaries. Rivers and streams can be characterised by their temperature, elevation, and whether they run throughout the year. They are connected with other freshwater and transitional biomes, like lakes, subterranean freshwaters, anthropogenic subterranean freshwaters, wetlands and artificial wetlands. Freshwater ecosystems, including rivers and streams, are particularly threatened, and have experienced greater declines in biodiversity than ecosystems on land.

When locating the intersection of this nature-based activities with business activities, both direct location on rivers and streams and indirect use of river and stream resources must be considered (e.g., water supply used for nearby industries, waste disposal for residents and industries). Companies can also have indirect associations with rivers and streams through investments and upstream or downstream value chain activities.

Some impact drivers of this biome include hydropower dam placement and storage dams for water consumption for urban and industrial use, wastewater treatment which can release pollution and toxicity from effluent discharges, urban and agricultural run-off, and other emerging pollutants such as pharmaceuticals, plastics, and thermal pollution.

Freshwater rivers and streams provide a number of different services than land biomes. In addition to water supply, biomass, soil and sediment retention, they also take a regulating role in flood mitigation and water purification. Physical risks and transitional risks associated with business activities in this biome should be considered in the assessment.

Other biomes

There are 25 different biomes that exist in the four realms of the planet. Each biome has a distinct pattern of intersection with human and business activities. Each also offer a valuable set of services. Supplementary guidances associated with biomes should be consulted in combination with sector guidances (e.g., on agriculture, forestry, and fisheries, among others), to form a comprehensive understanding of the impact of business activities on natural habitats, and to identify risks and opportunities for intervention, mitigation, and adaptation.

This is the third article in our series on nature-related financial disclosures. Other articles in the series include:

  1. Nature-related financial disclosures
  2. The LEAP framework for nature-related financial disclosures

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