THE HIGH SEAS TREATY’S IMPACT ON BUSINESS & OCEAN BIODIVERSITY REPORTING

What does the High Seas Treaty mean for Ocean Biodiversity, and how will this impact businesses and the way they report on their impact on nature and the ocean.

The High Seas Treaty will help drive much-needed alignment between business and marine biodiversity. However, achieving that alignment will have significant implications on business operations. Getting ahead of change now will ultimately set businesses up for success and sustainable growth in the future.

WHAT IS THE HIGH SEAS TREATY?

Following nearly two decades of discussion, including five years of negotiations, the UN has adopted the Biodiversity Beyond National Jurisdiction Treaty, commonly known as the High Seas Treaty. This is the first ever framework that seeks to regulate commercial activities that occur in international wa- ters - the ‘high seas’. It will help to advance the ongoing process of establishing greater protection of nature, this time in the largest ecosystem on the planet.

Up until recently, the ocean had insufficient regulation, which led to issues such as overfishing, resource depletion, habitat destruction, and widespread pollution. These issues were particularly acute in the high seas as they fall out of national jurisdiction and serve as ‘international commons’, constituting more than two-thirds of the Earth’s oceans and seabeds. The treaty’s ability to help prevent such damaging activities is a central reason why it has been received positively by both policymakers and environmentalists.

The High Seas Treaty is part of a wider trend of regulation aiming to mitigate the loss of biodiversity and align that objective more closely with the business world. Other pressing legislation and frameworks include CSRD in Europe, which requires companies to disclose their impacts and dependencies on nature, and the Task Force on Nature-related Financial Disclosures (TNFD), which seeks to bring nature-related risk assessment into the mainstream of financial and business reporting.

This makes for a rapidly changing regulatory context that will encourage businesses to both understand their operational dependency on nature and mitigate any impact that dependency may have.

The Intersection Of Biodiversity And The Economy

To appreciate the importance of protecting the ocean’s biodiversity, we need to zoom out and understand the role it plays in preserving the planet and human life. The ocean generates 50% of the oxygen we need to breathe. It is the primary source of protein and livelihoods for 3 billion people. It absorbs 25% of all carbon dioxide emissions, captures 90% or the excess heat generated by those emissions and is the earth’s largest carbon sink. Those services are not just generated by the water alone, but by the living organisms in the sea that produce the oxygen and sequester the carbon. Protecting the biodiversity in the ocean is therefore not only beneficial to life within the oceans, but to all of life on Earth.

Moreover, the vast amount of business models with supply chains reliant upon ocean resources means there is a significant economic component at play. Some have a direct reliance, such as those that require fish products, whilst others have an indirect reliance via activities such as mineral extraction or bioprospecting. Ocean ecosystems have an estimated worth of USD $30bn annually resulting from the services they provide, which means it is both environmentally and economically imperative to protect them.

The High Seas Treaty is a significant step in the right direction when it comes to achieving that protection. The treaty will shift the amount of the high seas that are protected from 1% to over two thirds. This will have a huge impact on how businesses operate, forcing them to reflect upon their relationship with nature and how they can improve it.

The Impact On Businesses And How To Adapt

Practically speaking, the most significant impact on businesses will be on their reporting and disclosure processes. Greenhouse gas emission disclosures have now become commonplace in sustainability reports, and are currently being mainstreamed into financial reporting via the new ISSB standards. Meanwhile, nature-based reporting remains nascent, and many businesses do not have effective processes in place to collect the necessary data to report on their impact on nature and biodiversity. As regulations like The High Seas Treaty evolve and the state of nature declines, these impacts will only become more financially material for businesses. Industry will need to adapt, finding new methods to collect that data, to avoid falling behind their competitors and falling foul of regulators.

Part of this adaptation process will see biodiversity monitoring become part of the reporting toolkit. Biodiversity monitoring has been a conservation tool for many years, allowing scientists to monitor and assess the state of ecosystems over time. However, inefficiencies and inaccuracies of the methods behind biodiversity modelling have stopped it from being successfully translated to nature reporting. Much of the data used has been based on either inefficient and outdated methods or proxies and models with little grounding in the depth of data needed to really understand biodiversity at site-level. Thankfully, recent developments to techniques and methods now make the collection of biodiversity data more efficient, objective, replicable, and scalable than ever before.

One of these methods is the collection and analysis of environmental DNA (eDNA). All living things leave a trace of their unique DNA through their regular activity, which means the sampling and analysis of the water, soil or sediment of a particular area will give a clear and reliable picture of the biodiversity within that environment. Crucially, eDNA is scalable, cost-effective, easy to do and extremely quick in the field and therefore scalable across business assets. The same eDNA technologies can be applied from land and freshwater to the vast oceans. This data can then be turned into boardroom ready metrics that provide decision makers with the necessary information to integrate biodiversity considerations into their operations, as well as disclose the biodiversity-related risk information within their financial reporting, all of which will help them to align their businesses with regulatory expectations.

ADAPTATION & OPPORTUNITY

Whilst many businesses will have to adapt their operations as a result of the High Seas Treaty, it should nevertheless be welcomed, and viewed as an opportunity for alignment. There has been a growing understanding of the need to protect biodiversity in recent decades in order to protect life on Earth, and to protect the natural resources that are needed to build a sustainable business, and this is now being reflected in regulations. If businesses can use innovative methods such as eDNA to collect the necessary data to report on their impact on nature, they can not only help to protect biodiversity, but also ensure they are well equipped to deal with any future regulations that arise, futureproofing themselves and getting ahead of their competition.

Nicole

Yeomans,

Marine Business Development Manager and Marine Ecology Expert at NatureMetrics at www.naturemetrics.com