Biodiversity: the next environmental issue for business according to McKinsey? ... well, almost!

I have a lot of pleasure and interest in reading Mc Kinsey Quarterly in general, especially when it deals with Sustainability topics of course. Yesterday when I opened my e-mails I was thrilled to see that:

a) there was a new results survey released and
b) it was about Biodiversity.

It is certainly due to the couple of years I did studying biology or my genuine interest in Fauna and Flora but I was really excited when I read the title of this e-mail: "Biodiversity: the next environmental issue for business?" followed by this very promising introductive line:

"As with climate change a few years ago, executives are now beginning to recognize the importance of biodiversity for their future strategies. Many are also discovering business opportunities, not just threats."

I told to myself "hooray" for 2 reasons: the importance on Biodiversity is finally considered as top of the agenda issue by businesses and it is already considered as opportunity rather than threat or risk… Wow my day started very well!

Sure enough, I followed the link and read with interest the full article discovering lots of very key information but quickly I got confused.

Oh... before telling you why, maybe you want to have a quick reminder on what Biodiversity is? You can have a look on a previous post here.

So now, back to the article.

If you stop reading McKinsey article at the end of the first page you will find an executive summary well in line with the title. You will have learnt what Biodiversity is and the importance of maintaining a large variety of genes and that indeed businesses are more and more keen in considering this topic in their work.

Now let’s go to page 2. Here surprises start, in the first line it is explained that "respondents don’t consider biodiversity nearly as important as many other environmental and sustainability issues". Indeed if you have a look at exhibit 1, you can see that Biodiversity is ranked 10/15 most important issues for the respondents’ business, let’s say at the end of the queue.

So no, unfortunately Biodiversity is not on top of the agenda. But well, the questionnaire was on Biodiversity after all and the authors are not going to be stopped by this little contrariety. So the focus is made on the companies for which diversity is obviously a key issue, e.g. food and beverage (for Flora and Fauna), pharmaceutical (for genetical, molecular diverse material). Unfortunately even them put Biodiversity as priority number 4, said McKinsey authors…

Finally we are reaching my favorite page of the article, page number 3. This page purpose is to demonstrate what the businesses are doing for Biodiversity issue and why. To justify the actions launched by the companies in Biodiversity issue is presented exhibit 4. You can see in it that 59% of the respondents in 2010 think that biodiversity issue is seen as an opportunity rather than a risk whereas in 2007 only 29% of the respondents thought climate change was seen as an opportunity. And therefore, McKinsey authors deduce that "risks and opportunities are equal drivers of action on environmental issues"… Hmmm… If you too think that there is a little shortcut in the extrapolation of the data raise your hand!

I raised my both hands but realized I could not type anymore so I authorize myself to put one down.

So the fact that the number of people in the sample is doubled in one case, that we are comparing 60% of "opportunity" with 30% of "risks" that the studies have been done 2 years apart and that the level of actions engaged to deal with climate change or biodiversity cannot be compared… is no problem for McKinsey authors…

And on the same page (yes it is really my favorite one), it was asked to the respondents to select what their company was doing in this area. And all the possible answers are about "renewable natural resources"?!? Are we still speaking of Biodiversity, does really McKinsey would define the diversity of Fauna as a "renewable natural resource"?

And I love the conclusion. According to the authors most of the respondents selected as action taken in their company: "identify new products or ideas from renewable natural resources". Firstly, I hope they are speaking about clothings and bags made out of hemp rather than taupe shoes. Secondly, well yes respondents mentioned this after 3 other affirmations so this answer is not even on the podium steps. However authors are right saying that it would justify why respondents see an opportunity rather than a threat. But please McKinsey authors when there is a ranking usually number 1 is the most either important or cited or strong… not ranked number 4, not ranked number 10!

In page 4 you will see that not all the companies feel like they have to act for Biodiversity. Maybe they realize that the choices given by the questionnaire where not completely in line with actual Biodiversity… and the last page emphasize on the common agreement on the need of regulations to move forward.

It is of course easy to criticize but do not misunderstand my thoughts. Again I do believe this article is still full of interesting informations. So I am suggesting my alternative conclusions after reading this article:

I am still happy to see that Biodiversity is a growing concern and that 59% of the respondents see opportunities in managing this issue.

But my main take aways would be that on top of the list of the environmental/sustainability issues there are:

Climate change and waste & pollutions remain. The importance in Climate Change is confirmed by the numerous summits and events (Copenhagen, Mexico, …) and communication in general (e.g. advertisement for low emitting cars). Concerning pollution issues the BP oil spill certainly maintain the stress on this concern.

Then the next issues are… well before Biodiversity…

Water, especially those days with on the one hand floods in Pakistan and China with no access to potable water and on the other hand drought in Russia with impressive fires.

Data privacy, ranked number 4 was for me something very interesting to consider and unfortunately not explained by McKinsey.

Human rights, to be honest I was a bit disappointed it was only number 5 with 18% but I hope it is considered as already well implemented and applied and that is why it is not at the top of the list.

So, I am not sure that Biodiversity was THE next issue for business despite what you would understand in the introduction of the article. However it is one of the issues and it is really appreciable to see that the importance of it is growing in the minds. Let’s just hope that they are understanding Biodiversity as in diversity of Fauna and Flora, and again if you have a glance on wikipedia you will quickly see all the benefits and the various threats from and for biodiversity and why it is so important even if it is ranked only number 10 by the respondents.