Top FTSE companies face investor backlash on biodiversity

| 20th December 2010
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Drug companies and the construction sector, both heavily reliant on natural resources, among the worst when it comes to acting to reduce their negative impact on biodiversity, says report

Only six per cent of the top 1,800 international companies listed on the London stock exchange have an adequate policy on biodiversity, according to financial researchers.

Global leaders signed a UN agreement last month promising to halt biodiversity loss by increasing the amount of protected marine and land areas. But observers including the UN's own environment officials say warnings about biodiversity loss have so far not been translated into 'meaningful and decisive action' by governments.

With the lack of a binding agreement from the summit, progress will be largely dependent on voluntary measures by corporations.

Researchers from the not-for-profit group EIRIS found 58 per cent of the FTSE-listed companies investigated operated in sectors whose activities had a 'considerable' impact on biodiversity. Worryingly, just 6 per cent of these 'high impact' companies were assessed as having a good policy on biodiversity. Good practice could include signing up to voluntary reporting or plans and targets for reducing their impact on biodiversity.

EIRIS says many of the worst-performing companies, particularly in the chemical, drug, construction and property development sectors, could soon find themselves the target of campaign groups and shareholder activism.

'Ten to fifteen years ago companies would be able to put out bland statements that may have convinced some shareholders they were on top of an issue but now you need to look for a lot more evidence and not wishy-washy statements that don't mean anything,' said Mark Robertson, a spokesperson for EIRIS.

Risks to businesses from biodiversity loss include: increased cost of raw materials such as freshwater, higher insurance costs for disasters, new governmental taxes and policies on biodiversity as well as reputational damage from NGO campaigns.

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