• Climate change not only impacts the health of people and planet but also, increasingly, business
• The multitude of factors behind biodiversity loss makes finding solutions difficult
• However, bans might be the most effective route to positive change

Biodiversity loss and climate change are two of the most pressing challenges facing our planet today. Both are interconnected with the impact of one often felt by the other; biodiversity loss, the decline in the variety and abundance of life on our planet including the loss of ecosystems, species and genetic diversity, can come as a direct result of climate change whilst, in turn, the growing loss of biodiversity disrupts the natural balance of the planet, exacerbating climate change.

It is, no doubt, imperative we take immediate action to prevent these crises from worsening any further, but if we needed any further encouragement, recent research from Queens University in Belfast found that almost half of the planet’s species are experiencing rapid population declines at a rate that is “significantly more alarming” than previously thought. It is not just governments that need to step up, but businesses and wider society, if we are to make any significant change.

Whilst images of melting ice caps, starving polar bears and rapidly reducing forests are commonplace in the climate debate, the risk climate change poses doesn’t just impact plants, animals and the planet through biodiversity loss; it’s affecting human health too. Julie Davies, Director of the MBA Health at UCL Global Business School for Health, states that higher temperatures have resulted in adverse mental health outcomes, pregnancy complications, kidney function loss, skin malignancies and tropical infections, all disproportionately impacting the most vulnerable in society.

In the world of work, extreme climates can have significant negative consequences for workers’ livelihoods, mental health, risks of injuries, infections, and deaths in heat waves, floods, droughts, and fires. Extreme weather events, such as heat waves can also increase irritability, dehydration and respiratory health as the quality of indoor and outdoor air declines. All of this combined leads to lower levels of productivity, higher work-related stress, business disruption and financial distress.

With a fall in labour productivity, heatwaves also have wider repercussions for global trade, with fewer goods being exported, according to a study by ZEW Mannheim and Frankfurt School of Finance & Management. Results found that an average heat wave leads to costs of around $360 million due to declining imports worldwide.

A problem of our own making…

But what actually causes climate change? Whilst climate change is a natural process that has occurred throughout Earth’s history, with fluctuations in temperatures and climate patterns occurring over millions of years, the current rate and magnitude of climate change that we are experiencing is far faster and more extreme than what has come before.

The cause, according to multiple investigations, but most recently the Climate Change 2023 Synthesis Report from the United Nations Environment Programme, is human activity. “…humans are responsible for all global heating over the past 200 years leading to a current temperature rise of 1.1°C above pre-industrial levels, which has led to more frequent and hazardous weather events that have caused increasing destruction to people and the planet,” it reads.

Greenhouse gases are the main culprits. These gases, including carbon dioxide, methane, and nitrous oxide, trap heat in the atmosphere and cause the planet’s temperature to rise. To tackle climate change head-on, one of the most effective routes lies in finding ways to reduce greenhouse gas emissions.

Businesses and governments can reduce greenhouse gas emissions by investing in renewable energy sources such as wind and solar power, improving energy efficiency, and reducing reliance on fossil fuels. New technologies are helping progress this effort, as well as the activities of savvy environmentally-focused start-ups.

An industry making significant strides is transportation, with new technologies reducing the emissions from cars, trucks and airplanes through electric, hybrid, and more aerodynamically efficient designs. Governments can, and have, provided incentives for individuals and businesses to switch to clean transportation and rely less upon petrol and diesel, but despite significant strides more needs to be done.

A need for re-education

The move away from fossil fuels is a worldwide endeavour. For the industry to transition to more environmentally-friendly energy sources, individuals working in the oil, gas, and energy sector will need to upgrade their skills as well as adjust their attitudes. Those with such desires at heart should turn their attentions to the higher education institutions which have spent time devising relevant specialised programmes to equip professionals with the knowledge and capabilities required.

Nazarbayev University in Kazakhstan is one such school with a dedicated School of Mining and Geosciences (NU SMG), offering courses on niche but vitally important topics such as Petroleum Engineering – an education which is essential in the implementation of many carbon capture technologies which are important for reducing CO2 emissions. Thus, oil and gas technology will be at the forefront of the green energy transition, making an education in petroleum engineering a valuable asset for the foreseeable future.

Durham University Business School in the UK is another institution adapting its offering in order to equip graduates with the skills to deliver on the Net-Zero goals set by government and navigate both the technical and business challenges that come as a result of climate change with ease. The new MSc in Energy Engineering Management recognises the need to equip those with the STEM skills required to create new solutions to tackling climate change with a solid management acumen to ensure their efforts can deliver real results.

Governments can, of course, provide incentives for companies to switch to renewable energy sources or for businesses to invest in research and development of clean energy technologies. Additionally, governments can implement regulations that require companies to reduce their greenhouse gas emissions, such as setting emission reduction targets or imposing a carbon tax.

And incentives can have real impact on greenhouse gas emissions. For example, research from the University of Mannheim Business School reveals that companies that include ESG metrics in their executive compensation schemes experience more tangible improvements in their CO2 emissions. Including ESG criteria among key performance indicators for executives (ESG pay) is associated with companies receiving more favourable ESG scores from external rating agencies.

But further education can help ensure business leaders understand the need to go beyond climate change compliance and design and implement strategies across an entire organisation which benefit both planet and provide profit. Executive education programmes such as Imperial College Business School’s new Executing Sustainability Strategies course seeks to redesign mindsets as well as business practice so that climate commitments can be fully met.

Back to biodiversity…

However, although the theoretical solution to climate change – reduced greenhouse gas emissions – is relatively simple to understand, biodiversity loss is more complex. Biodiversity loss involves a number of factors including climate change, farming, natural resource depletion and more, making finding a solution more difficult.

Rajshri Jayaraman, Associate Professor of Economics from ESMT Berlin, explains that, while incentives such as taxing companies through price policies and putting caps on the emissions companies are permitted to produce can be useful in regards to climate change, they may not work as well for reducing biodiversity loss. The negative impacts of biodiversity loss are difficult to measure, making it hard to build a market for it and taxes difficult.

Prof. Jayaraman believes another option might be most effective: Direct Quantity Restrictions. These can include outright bans, which can be effective when properly enforced, or limits on use. For example, in 1987, ozone-depleting chemicals were banned, and in Dec 2022, nations pledged to protect 30 percent of land and seas by 2030.  

Promoting preservation

The preservation of natural habitats is another crucial step in preventing biodiversity loss. Natural habitats are home to countless plant and animal species vital to the health of our planet. Forests, wetlands, and oceans are all examples of natural habitats that play a critical role in regulating Earth’s climate and supporting a diverse array of life. It is essential that we take steps to protect these habitats from destruction, fragmentation, and degradation.

Governments can protect natural habitats by creating and implementing policies that prioritise conservation. Protected areas such as national parks and wildlife reserves all preserve critical ecosystems and promote biodiversity. But could such protections go further? Research from Nyenrode Business University suggests that granting legal rights or personhood to ecosystems could change how we view nature and be a step towards protecting it.

Considering research from BI Norwegian Business School, which suggests environmental concern peaks in our early 40s before declining as we age, we have to hope the individuals in charge and responsible for implementing policies and regulations care enough about our planet and environment to make such changes, but putting such values into legal practice might indeed help adjust societal attitudes regardless of age or social standing.

Because preventing biodiversity loss and climate change requires a concerted effort from all of us. We must protect natural habitats, reduce greenhouse gas emissions, promote sustainable agriculture, encourage conservation efforts, and invest in clean transportation. These steps are not easy, but they are essential if we want to ensure a healthy and sustainable future for our planet for generations to come.