Biodiversity Liability and Value Chain Risk Report

Biodiversity risk is increasingly going to be on the corporate radar as part of ongoing work to mitigate climate change risk (and support nature-based solutions) and broader initiatives on ESG. At the same time, accounting and reporting standards for biodiversity-related risks and impacts are taking shape.

As a result of increased scrutiny of both the dependencies and impacts that companies have on biodiversity and the increasing harms caused by biodiversity loss, we will begin to see an uptick in litigation risk. Added to this picture is the growing use of data from remote sensing and in supply chain management which will permit a better understanding of where biodiversity loss is occurring and who may be responsible.

Cases may be brought for the direct impact of companies on ecosystems or particular species, or for the deprivation of related ecosystem services to communities or other companies that depend on them. Liability risks can also arise from a failure to adequately or faithfully report on biodiversity-related risks, or misrepresenting nature-positive credentials.

Importantly, the advent of biodiversity litigation risk comes at a time of (1) greatly enhanced value chain due diligence requirements, and (2) courts’ preparedness to recognise the rights of nature as a legal person alongside humans and corporations.

Against this backdrop, our Climate Risk and Resilience team, together with the Global Resilience Partnership, has produced a joint report on biodiversity liability and value chain risk.