Request > Environmental regulation, business and biodiversity

How can environmental regulators support businesses to improve the outcomes of their operations for biodiversity, with a focus on small and medium-sized enterprises in the food and beverage sector in Europe?

Requester: Scottish Environment Protection Agency (SEPA)

Summary

Type of request: Knowledge synthesis

Biodiversity loss is one of the biggest challenges that we are facing. Human activities threaten many species and their habitats and ecosystems that provide essential resources for human nutrition and well-being. Businesses are increasingly aware of their dependencies upon biodiversity and ecosystem services, considering these factors as the natural capital of their business operations (e.g. raw materials such as cotton or coffee). Despite this growing recognition, businesses’ practical approaches to understanding and managing their natural capital impacts across their supply chains are lacking.

This request is aimed at small and medium-sized enterprises, as these have been identified as potentially benefiting most from support in understanding, selecting and implementing mandatory and voluntary approaches to enhance environmental sustainability–as these have not been sufficiently addressed thus far.

Reference: Request CfR.1/2016/4

Expert Working Group
  • Delphine Gibassier (Associate Professor, Toulouse Business School) (co-chair)
  • Janina Grabs (Research Associate, Westfälische Wilhelms-Universität Münster) (co-chair)
  • Vincenza Ferrara (Farmer, Azienza Agricola “DORA” di Vincenza Ferrara)
  • Stefan Hörmann (Head of Unit, Global Natura Fund)
  • Stefano Targetti (INRA Ecodevelopment, France)
  • Lisa Biber-Freudenberger (Center for Development Research, Bonn University)
  • Jane Glover, University of Birmingham
Contact points

KCB Focal Point: Petr Petrik/Heidi Wittmer and Allan Watt
EMB Contact Point: Marianne Darbi/Karla E. Locher

Final outputs

Final report: file. 02.09.2020
Methods protocol: file. 15.06.2018
DoW: file.2017

The EWG emphasizes the need for SMEs (farmers/producers) be accompanied by support mechanisms in the implementation of policy instruments that aim to improve their impacts on biodiversity. They argue that the geographical scale of policy instruments is key since the contextualisation, adaptability and flexibility of instruments have been emphasized from all the used methodological tools. Furthermore, the EWG has been able to collaboratively identify specific challenges faced by SMEs and regulators in the specific food and beverage sector, when it comes to biodiversity protection:

  • Support: to SMEs to understand, select and implement mandatory and voluntary approaches for biodiversity. They require incentives and resources to cover initial investments.
  • Language: government agencies must communicate with companies using a language accessible to business operators and supply chain actors.
  • Time: temporal aspects need to be considered, both in anticipating and piloting future regulation and the longevity of any biodiversity improvements.
  • Geographical scale: the question of scale refers to what is relevant on the market in the food and drink retail industry, e.g. mostly global standards that reach many businesses vs regional initiatives and influences.
  • Internal organizational change: policies should ideally consider if certain approaches could change employee mindsets and company cultures.
  • Influence on and from customers: consumers are the second type of stakeholders having a strong influence on biodiversity outcomes. Thus, customers must be prioritised in being targeted by policy approaches.
  • Practicality of approaches: Practical approaches for businesses to understand and manage their impacts on biodiversity and natural capital across their supply chains are lacking.
  • First movers versus main-streaming – two different strategies: 1. Innovation leverage for businesses to go beyond regulation (i.e. pilots, first movers) or 2. main-streaming the variety of existing approaches beyond the minority of already committed businesses.
  • Implementation cost: implementation costs of any policy measure is an important aspect for SMEs.

(request recently finalised)

Biodiversity loss resulting from human activity and a rapid related decline in essential resources for human nutrition and well-being is one of the largest challenges facing us today. While businesses are increasingly aware of their dependencies on biodiversity and ecosystem services, practical approaches allowing companies to understand and manage their impacts on natural capital across their supply chains are lacking.

Methods for improving businesses’ biodiversity outcomes span over a multitude of approaches from regulation to standards, voluntary approaches, and market-based approaches. However, it is essential to understand and evaluate how effective the various approaches are in changing employee mindsets, company culture, and customer behavior. Some initiatives and projects are emerging in this field. Most notable of these is the Natural Capital Protocol, a standardized framework to help businesses identify, measure and value their impacts and dependencies on natural capital and, ultimately, apply natural capital accounting results into their existing operations. 

To facilitate the implementation of the protocol sector guides have been published, initially for the food and beverage and apparel sectors. Other examples include a project on Natural Capital Markets, guiding business and other stakeholders (http://www.naturalcapitalmarkets.org/startseite/) and AgoraNatura, aiming to provide a marketplace for ecosystem services in the future (http://project2.zalf.de/AgoraNatura/). The European Commission hosts Business @ Biodiversity Platform, providing a forum for dialogue and policy interface to discuss the links between business and biodiversity at the EU level. This forum aims to work with and help businesses integrate natural capital and biodiversity considerations into business practices. In particular, the innovation workstream aims to promote innovations that contribute to nature protection by sharing best practices of innovative companies and business models and identifying opportunities for fostering new business models. 

The food and beverage supply chain

Source: Trucost. 2016. Environmentally extended input-output (EEI-O) model; Natural Capital Coalition. 2016. « Natural Capital Protocol – Food and Beverage Sector Guide.»

Timeline

Date request received: 28/10/2016
Call for Knowledge: March-April 2017
Call for Experts: September-October 2017
Date of experts selection: November 2017
Date of the online EWG Kick-off meeting: 11/12/2017
Open call for experts: October 2019

In October 2016, a request was received by the Scottish Environment Protection Agency (SEPA)

Scoping phase

The revised research questions were:

“What are the advantages and disadvantages of existing approaches that environmental regulators can use to enhance environmental sustainability and improve outcomes for biodiversity of small and medium-sized enterprises in the food and drink sector of Europe? What are the interactions between conservation actions aimed at pollinators and pesticides?”

A Call for Knowledge (CfK) was carried out in March-April 2017. The responses and sources received allowed the preliminary identification of relevant publications. It resulted in 78 sources (note that several sources were assigned to two categories), divided into 60 empirical studies, 7 literature reviews, 21 conceptual papers, and 3 modelling studies. Based on the scoping process and the Call for Knowledge, a Document of Work (DoW) was compiled.

Answering the request

Methods protocol

During the scoping process, the EKLIPSE Methods Expert Group and the KCB Business group discussed potential knowledge synthesis methods, which can be applied for this request. Building on the discussions and material prepared by the EKLIPSE Methods Expert Group, the following methods were suggested for the different steps of the request:

  • Quick Scoping Review
  • Solutions Scanning
  • Delphi Process 
  • Non-systematic Literature Review 
  • Multi-Criteria Analysis

Selection of an Expert Working Group

The first working group meeting took place in Brussels on December 11th, 2017. During this kick-off meeting, the group was formally established, ensured a common understanding of the request and started to develop the future working plan among the experts. The Expert Working Group has developed the Document of Work (DoW) into a Protocol which, following a period of extended peer-review and open consultation, serves as the basis for their synthesis work and will support the drafting of a final report/product. In June 2018, the expert working group finalised a draft of the methods protocol that was made public and broadly disseminated to a range of stakeholders using the following engagement process:

  • EKLIPSE invited external expert review of the report – approximately five external reviewers to review the draft protocol report on its content and structure. Reviewers represented different backgrounds (academia, policy, and practice).
  • The draft protocol report was distributed among the participants of the Expert Survey. They were asked for their feedback and input on the content and conclusions.
  • Public consultation on the draft protocol report – the draft protocol report was placed on the EKLIPSE website, allowing public members to comment on it over one month.

After this process, comments and suggestions were considered and formally responded to by the members of the EKLIPSE EWG (methods protocol revised)

First, the expert working group undertook a quick scoping review of the literature and comparative analysis to assess the approaches that regulators can potentially use. Next, expert consultations will be held using the Delphi process and a Bayesian Network Workshop to narrow down the most important conditions and policy tools to support businesses. To achieve these aims, the following methods were used:

Task 1: Define a rough framework of approaches and their effectiveness.

  • What approaches can improve the biodiversity outcomes of businesses?
  • How do we know these approaches work/effectively improve biodiversity outcomes and over what timeframe, i.e., regarding accounting for biodiversity impacts, identifying the most relevant parts of the value chain, and keeping track of interactions across complex value chains?

Method used: Non-systematic Literature Review (or Quick Scoping Review), supported by a part-time research assistant.

Task 2 & 3: Identify the most promising approaches to be used by regulators and analyse under which conditions the chosen approaches work well:

  • What are the advantages and disadvantages of existing (and potential) approaches?
  • Which of the approaches identified in task 1 are most promising to be used by regulators?
  • Which of these approaches work well under which conditions?

Methods used:

.Building on the Quick Scoping Review, the EWG jointly undertook a Qualitative Comparative Analysis

.Expert Survey, as well as the participatory elicitation of the likely effectiveness of policy options under varying conditions, using a Bayesian Decision Network

.Qualitative Comparative Analysis enhanced by stakeholder responses elicited through the Expert Survey and the probabilistic model elaborated in the Bayesian Decision Network

.Peer-review of the outcome.

A conceptual overview of methods and their use in addressing the three requested tasks  

Finalization

The expert working group developed a draft report that was released for external review in May 2019. This draft report summarises the outcomes of the three different tasks defined to answer the question, using four different methods (a quick scoping review, quantitative comparative analysis, expert survey, and Bayesian network analysis). The draft report can be found here.

On 02.09.2020, the report was completed and published.