Researchers map out approach to preserving biodiversity and natural capital
Researchers have investigated how Dutch companies approach the increasing importance of reducing their impact on biological diversity and natural capital. The Netherlands Environmental Assessment Agency (PBL) asked Rob van Tulder, Professor of International Business-Society Management at Rotterdam School of Management, Erasmus University (RSM), and researcher Christiaan Hendriks to look into the status of Dutch companies’ approach. The two scientists analysed the public annual reports of 38 companies carrying out operations that have a significant impact on biodiversity (variety of plant and animal life) and natural capital (natural assets which include geology, soil, air, water and all living things). Their results showed that the responses of businesses are mixed, with some companies experimenting with interesting strategies, while others could use help from government.
In the report Dutch companies’ approach to preserving biodiversity and natural capital mapped out (in Dutch), the researchers classified and analysed motivations of companies in defining the business case for biodiversity and natural capital and the adopted business models to achieve that vision. They observed a clear distinction between trendsetters, followers, stragglers and companies that are inactive. They found that the majority of companies analysed still have a relatively defensive attitude to reducing their environmental impact. But they also found some companies are taking part in interesting activities that have enabled them to overcome strategic tipping points and to realise more active ambitions. Dutch companies could improve their environmental impact if the government adopted a greater variety of roles that target different companies in different phases of transition, say the researchers.
Still in its infancy
Many companies have only recently begun focusing on biodiversity and natural capital, meaning that there is still a great deal of uncertainty about strategies that companies can adopt. Most companies have reactive motives but still have difficulty incorporating their intentions into coherent business models, despite actively seeking to take a more active approach to the preservation of biodiversity and natural capital.
“The focus on biodiversity and natural capital is still in its infancy for most companies. This is even true for businesses that actively seek to promote those things,” explains Professor Rob van Tulder. “In order to realise the transition that the Dutch government seeks to bring about, we needed a better understanding of how businesses can incorporate their aspirations for biodiversity and natural capital into their business models, and of the obstacles they encounter.
No longer tenable
The Remkes Committee outlined why companies must be innovative in order to address nitrogen emissions, said Van Tulder.
The researchers found that there are ‘trendsetter’ companies that want to properly integrate a focus on biodiversity and natural capital in their business operations, and have taken steps to do it throughout their business model. Some companies already integrate isolated or occasional initiatives that have not yet been incorporated into the company’s business model.
The study focuses on a general taxonomy for mapping out the relationship between business models and corporate social responsibility (CSR), as described in Getting all the Motives Right – Driving International Corporate Responsibility (ICR) to the Next Level (Van Tulder, 2018). This taxonomy distinguishes four types of business archetypes: inactive, reactive, active and proactive. These archetypes represent two relevant dimensions of the businesses’ operations and motivations.
What’s your motivation?
There’s an important question about the type of stimulus that motivates companies to focus on a broader social topic: is it intrinsic motivation (resulting from the company’s own business model) or extrinsic motivation (resulting from pressure exerted by society)?
It’s also important to know how a company views the social topic at hand; does it view it as a liability risk that must be mitigated through tactical measures, or rather as a responsibility and opportunity that the company should include in its strategy so that it can take action, in association with its partners?
Slow to incorporate strategies
This taxonomy model with the four business archetypes (inactive, reactive, active and proactive) was then applied to 38 Dutch companies active in sectors with a relatively high impact on biodiversity and natural capital, such as chemical plants, the agriculture sector, and the food industry. The results of analysis show that most of these companies in the Netherlands fall into the ‘reactive’ category.
However, the company’s archetypal characteristics become more distinct when aspects of business operations are taken into account. For example, when it comes to accounting for what they are doing, many companies are clearly slow to incorporate biodiversity and natural capital models into their business operations. Vegetable distributer Eosta is a trendsetter in the agro-food sector, and corporations such as Unilever, animal nutrition company Nutreco and multinational food company Royal Wessanen have carried out interesting initiatives, both in the way they take into account the whole chain and in their partnership strategies. In the financial sector, ASN Bank and Triodos Bank are proactive trendsetters in terms of having implemented more active strategies.
What motivates companies?
Mark van Oorschot, a senior researcher in biodiversity policies at PBL Netherlands Environmental Assessment Agency is interested in what motivates companies: “The government expects companies to include biodiversity more prominently in their business operations so that they can contribute to the transition towards a green economy. The government encourages companies to do so by means such as knowledge platforms and Green Deals. I suspect this policy of facilitation is only reaching a small group of companies who are already motivated. We need a better understanding of the motivations of companies active in different sectors so as to be able to broaden the government’s approach, and particularly to get the stragglers to join.
“Therefore, we are including the insights gained from this study in the policy brief that PBL is currently drawing up. This will be published before the next Convention on Biological Diversity, in China in 2020, and will address the role played by the business community.”
About this study and the researchers
The study was conducted at PBL’s request in 2018 as part of a wider study on sustainable business models, partially funded by the Netherlands Organisation for Scientific Research (NWO). The main challenge to be addressed in this study was to develop a taxonomy (classification method) of businesses that would enable the researchers to map out and understand (from a strategic point of view) the efforts that businesses are making to preserve biodiversity and natural capital. Read the full research report here (in Dutch). Read the press release about the project here (in Dutch)
Rob van Tulder is Professor of International Business-Society Management in RSM’s department of Business-Society Management and Academic Director of the Partnerships Resource Centre; both are world leaders in the field of corporate social responsibility and sustainability.
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top 10 business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who can become a force for positive change by carrying their innovative mindset into a sustainable future. Our first-class range of bachelor, master, MBA, PhD and executive programmes encourage them to become critical, creative, caring and collaborative thinkers and doers. Study information and activities for future students, executives and alumni are also organised from the RSM office in Chengdu, China. www.rsm.nl
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