It says that biodiversity issues can pose significant and material business risks to extractive companies. These risks include restricted access to protected areas, liability for negative impacts and dealing with the consequences of mismanagement by others. So while poor biodiversity management can damage the environment for generations to come, it can also directly affect a company's bottom line today.
The report, entitled Are Extractive Companies Compatible with Biodiversity? surveyed 20 global extractive companies on their policy, management and reporting of biodiversity. Key findings included:
- 65% of companies surveyed did not have a published policy or position statement on biodiversity
- 65% did not have reportable targets
- 35% of companies (seven out of 20 surveyed) were ranked as scoring zero.
The six companies that emerged as leaders were AngloAmerican, BG Group, BP, Rio Tinto, Shell and Statoil. Among the companies that were poorest in this area were Exxon Mobil and Total.
Robert Barrington, director of governance and SRI at ISIS, commented: "While certain companies are well-equipped to understand these risks and start to manage them, others continue to ignore them, possibly to the long-term detriment of their shareholders. Investors should require a rigorous approach to biodiversity management from every company in this high-impact sector."
The report recommends that companies have a specific public position statement on biodiversity, that they set biodiversity targets and report on them, and that they should both assess and report on their exposure to protected areas.
"A very clear message to emerge from our research," said Barrington, "is just how wide the gap has become between the companies in the leading group and the corporate laggards. If extractive companies are to avoid tighter legislation, the sector must recognise that it is only as strong as the weakest link in the chain. This report should be considered as a warning shot, indicating that investors are starting to take the issue of biodiversity seriously."