Understanding business impacts on nature - and on nature’s benefits
Key concepts and visuals from Chapter Three of the IPBES Business & Biodiversity Assessment
Dependencies. Beneficiaries. Risks. Impacts. Opportunities.
All these terms -- some more jargon-y than others -- have a key place in the conversation about nature and natural capital, and how to sustain a livable planet and thriving economies into the future. And they’re central to the recent IPBES Business & Biodiversity Assessment, which we reported on through a brief interview with Lisa Mandle, NatCap’s co-executive director, when the “policymaker’s summary” was published and signed off on by 150+ countries. Lisa was the coordinating lead author for the third chapter of the report, which dives into the kinds of impacts businesses have on nature, and the implications of this for different sectors and actors including governments and civil society. Now that the full report is available, we wanted to highlight a few key points from this chapter plus a few of the graphics, which a range of folks on our NatCap team helped develop!
But first, a quick overview of those key terms:
Beneficiaries were mentioned in our glossary post, but they’re important! These are the specific people, groups, sectors, or businesses (socio-economic units) that benefit from ecosystem services. Without beneficiaries, it’s not considered a service.
Dependencies refers to how businesses or others depend on nature. This is essentially the inverse of “beneficiaries”: if a business relies on certain ecosystem services like flood mitigation from nearby wetlands, this can be considered a “dependency.” More than half the global economy is widely considered to be moderately or significantly dependent on nature – while in some ways, all economic activities are dependent on it.
Nature-related risks can arise from a business’s impacts on resources on which it depends, such as unsustainable harvest; from business impacts that occur separate from its dependencies, such as from pollution or land conversion; or from activities of actors outside the business’s value chain, such as government regulation. Risks can be categorized as physical, transition or systemic risks (IPBES Ch. 3; page 2, key message #9).
Impacts to biodiversity and ecosystem services can be direct, value chain-related, indirect, and cumulative. See more about this in Figure 3.1! One of the key perspectives natural capital approaches offer is quantifying not just impacts on ecosystems themselves, but how this affects the flow of benefits they’d otherwise provide.
Nature-related opportunities means that businesses and others may also find nature-related opportunities to offer new products and services; to secure or enhance the biodiversity on which they depend; to differentiate themselves in the marketplace; to face fewer regulatory pressures; and to manage liability by reducing negative impacts or contributing to positive impacts on biodiversity (IPBES Ch. 3; page 2, key message #9).
As noted by the IPBES Chapter 3 authors, the way businesses choose to manage their impacts and dependencies significantly influences the risks and opportunities they face.
Typology and pathways of business impacts on biodiversity and nature’s contributions to people (Figure 3.1).
Businesses and financial institutions have significant impacts on biodiversity and nature’s contributions to people through a variety of pathways, and understanding these is important to guide decision-making. Business impacts on nature come not just from the impacts of their direct operations, but through their upstream and downstream value chains, through indirect impacts, and through cumulative impacts. To address their impacts and the risks and opportunities created by those impacts, businesses need to understand and act on this range of impacts.
Direct impacts stem from the operational activities of a business.
Value chain impacts result from the activities within its upstream or downstream value chain.
Indirect impacts result from activities that were spurred by that business’s actions but fall beyond its direct operations or value chain, such as population growth, land clearing and the expansion of infrastructure surrounding a new mine or road.
Cumulative impacts result from the aggregate effects of businesses and other actors at a site, landscape or seascape, or globally.
Differentiating positive and negative impacts of business activities on biodiversity (Figure 3.2).
Business activities have largely had negative impacts on biodiversity. Yet there is also the potential for business activities to have positive impacts relative to current conditions. Achieving the Kunming-Montreal Global Biodiversity Framework (adopted by nearly every country in the world) to halt and reverse biodiversity loss requires a shift towards positive impacts. Thus it’s important to differentiate between activities that reduce negative impacts on the state of biodiversity and nature (e.g., increased efficiency in resource or energy use, reduced pollution) and those that have a positive impact (e.g., restoration, improved agricultural management practices). Establishing baseline/reference conditions is important to determining what counts as positive.
Whether the impacts of business activities on biodiversity can be considered positive or negative depends on the baseline conditions against which these impacts are measured (grey dot and dashed line ---).
Activities such as restoration of ecosystems or agricultural practices that enhance biodiversity can have positive impacts (green arrow) that improve the state of biodiversity relative to a baseline of current conditions.
Activities that lead to more efficient land use or reduced waste production can lessen the ongoing negative impacts of business activities (orange arrow), leading to improved outcomes relative to a business-as-usual scenario (blue arrow) but without improving the state of biodiversity relative to a baseline of current conditions.
When considered against a relatively un-impacted reference state, the impacts of business activities on biodiversity will nearly always be negative.
Relative sector-level impacts from studies providing cross-sector estimates of impacts on biodiversity (Figure 3.3).
Businesses that produce tangible goods, and energy (like agriculture, at the top of the figure) produce the greatest negative impacts on biodiversity, often because of the changes in land use they entail. Yet they produce these based on demand from other sectors and consumers, and thus all businesses are impacting biodiversity through the value chain.
In this figure, studies were selected according to inclusion criteria in the main text and re-categorised against the International Standard Industrial Classification of All Economic Activities (United Nations, 2008).
Much of this piece is adapted from Chapter 3 of the IPBES Business & Biodiversity Report:
Mandle L., Kohsaka R., Bull J., Crona B., Johnston M.A., Oguge N.O., Panwar R., Romero C., Avila-Ortega D.I., Chelangat S. Chetty K., Vargas-Rayo O. (2026). Chapter 3: How does business impact biodiversity? In: Methodological Assessment Report of the Impact and Dependence of Business on Biodiversity and Nature’s Contributions to People of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. Rueda X., Jones M., Polasky S., (eds.). IPBES secretariat, Bonn, Germany. DOI: https://doi.org/10.5281/zenodo.17074410.