Thailand: Why businesses should invest in solutions to biodiversity loss

03 Oct 2023    2 minute read
Sustainability Energy Transition

In brief

Biodiversity is included as Goals 14 and 15 of the Sustainable Development Goals (SDG), and its growing significance was emphasized during the special COP on biodiversity, COP15. Many jurisdictions, such as Australia, Japan and the EU, have adopted biodiversity laws to respond to the growing threat of species extinction, habitat loss and ecosystem loss. Thailand has also been working on the same subject, as was included in the most recent Prime Minister's Statement on National Strategy, and the Ministry of Natural Resource and the Environment has been working on the draft Biodiversity Bill ("Draft Bill"). Presently, the Draft Bill is being reviewed by the Office of the Council of State ("Council"), as indicated on the Council's website, and will still have to pass many legislative processes. Thus, the principles and details of the Draft Bill may still change in the meantime. If enacted, it will become the central legislation for biodiversity protection

Contents

The main features of the Draft Bill include promoting the sustainable use of biological resources and ensuring equitable access and benefit-sharing; it also raises the level of protection and fills in the regulatory gaps of existing specific laws on biodiversity.

In depth

The increased international attention on biodiversity in recent years will lead to companies adopting biodiversity as one of their long term business strategies. With the growing threat of climate change and species extinction, businesses will need to transform the way that they operate to adapt to new environmental changes.

Biodiversity may form a part of companies' voluntary CSR initiatives but for businesses operating in nature dependent industries, such as food, agriculture, and oil and gas, maintaining healthy ecosystems is critical for their operations. Integrating biodiversity as a mandatory component to their business strategy is thus essential for their long term survival.

According to an article by the World Economic Forum1, CEOs of eight companies who are members of Champions for Nature shared that they invest in biodiversity as part of their voluntary climate change and business initiatives. Climate change and biodiversity are interconnected issues, thus a company's investment in biodiversity can produce positive climate change impacts as well. From a business perspective, if companies invest in biodiversity, it can be easier for them to pool in investments from responsible investors. For public companies to be included in a list or index for sustainable businesses, such as the Thailand Sustainability Investment (THSI) list, they must show that they are creating sustainable solutions in their operations or impacting communities in a positive way. Some sustainability lists and indexes will have included biodiversity as one of their criteria.

However, it can be difficult for companies to measure how much biodiversity they have restored in numerical terms, unlike for carbon where it can be measured in tons. Tools such as biodiversity credits can be used to demonstrate that businesses are making meaningful changes towards biodiversity. They are issued to reflect the conservation effort needed to restore the biodiversity on a particular area of land. Currently, there is no international standard on biodiversity credits; different organisations in different countries that issue biodiversity credits employ various methods for calculating biodiversity credits. Once biodiversity credits for an area of land have been issued, landowners can sell those credits to investors who want to invest in restoring the biodiversity on that land. In return, investors are able to use biodiversity credits to help meet their voluntary biodiversity targets within their CSR / sustainability objectives.

1 https://www.weforum.org/agenda/2021/09/these-8-business-leaders-are-championing-a-nature-positive-economy-heres-why-natural-climate-solutions-biodiversity/

Contact Information
Bulin Sanooj
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bulin.sanooj@bakermckenzie.com
Nam-Ake Lekfuangfu
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Dhiranantha Rithmanee
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Muanjit Chamsilpa
Environmental Specialist
Bangkok
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Chanata Kengradomying Chaivaivid
Sustainability Knowledge Management Officer
Bangkok
chanatakengradomying.chaivaivid@bakermckenzie.com

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