This Scorecard is due to be updated in 2018
The natural environment, and the diverse biological resources it encompasses, are fundamental to existence. The unsustainable use of a vulnerable habitat, the exploitation of endangered species or the unchecked harnessing of non-renewable/exhaustible resources are all grave threats to the health of the environment.
Commercial exploitation of natural resources has highly adverse socio-economic and environmental consequences and hence businesses have a responsibility to minimise the impact of commercial activities on surrounding areas. Well-managed resources bring considerable sustainable benefits to a community through food security, employment and income; conversely, their mismanagement leads to social instability. Scarcity and/or inequitable access to natural resources is a major source of conflict throughout the world.
Profit-centric environmental practices will only aggravate this problem. Current corporate accounting systems tend to externalise the costs of biodiversity loss, and look only at the short-term economic benefit of development. This incentivises indifference to the environment, at best, and maximum exploitation for profit, at worst.
It is now increasingly obvious that sustainable business is no longer just an ethical choice. Businesses have to realise that their very survival is critically dependent on the environment that they are a part of. Only those companies who make conscious, concerted efforts to incorporate environmental concerns into everyday practices will survive in a future clouded by risk and uncertainty posed by issues such as climate change. In addition, there are also definite gains in terms of regulatory approval and public appreciation. Investment in green technology is a big step forward in this direction.
Many of the issues surrounding natural resources are interdependent. These are three of the most prominent examples of commercial activities that pose a threat to scarce natural resources:
Mismanagement of a renewable resource: Both fish stocks and timber are considered renewable natural resources because they can be sustained or replenished over time. However, overfishing and unsustainable logging threaten this replenishment and as a result the world's oceans and forests are losing their biodiversity at an accelerating rate. Effective management regimes are crucial to their long-term survival. Increasingly these are transboundary, global problems rather than just national ones.
Overuse of a finite resource: Rapidly depleting stocks of a finite resource may impact both the human activities that heavily rely on the resource, and also the ecosystems that depend on that resource. For example, peat bogs are fragile habitats containing unique plant and animal species. For centuries they have been drained for agriculture, but in the last 100 years they have been rapidly depleted by commercial peat use. They are now recognised to be immensely important in the sequestration of carbon dioxide and the reduction of global warming.
Over-concentration of a single resource to the detriment of biodiversity: Excessive cultivation of a single natural resource can damage scarce, unique or fragile habitats and related existing flora and fauna. The world's forests, swamps, lakes and other habitats continue to disappear as companies make way for agriculture, roads, pipelines and all the other hallmarks of industrial development. For example, the rapid expansion of palm oil plantations is leading to the destruction of rainforests in Indonesia and Malaysia. This has a devastating impact, replacing one of the most species-rich ecosystems in the world with monoculture plantations.