“We also have to be mindful about the risk to biodiversity as companies expand into natural areas through their supply chains. The conversion of land often replaces diverse natural habitats with miles of a single species of crop, known as monocropping, which threatens the diversity in the ecosystem,” he says. “It’s a global problem, but one that’s much more acute in certain areas, so chances are there will be stiffer regulation in certain markets.”
Beyond that, Roc-Sennett points to the industry’s impact on the water system. The expansion of large consumer companies, he says, also tends to reduce the ability for water to be retained in one area, which adds the already-severe challenges faced by certain parts of the world bearing the brunt of the impact from climate change.
If left unchecked, Roc-Sennett argues consumer staples companies could end up creating massive negative externalities, including many that will come back to haunt them. Aside from the obvious threat to food security, he says consumer staples companies have to consider risks related to natural medicine; 4 billion people worldwide use plant-based medicines, but as populations of pollinators and diverse chemical compounds held in plant species dwindle, it raises important questions about the ability of companies to develop medical products to meet future needs.
“At this point, we’re seeing huge gaps in companies’ ability to replace the nine species that dominate around two thirds of the world’s supply of farmed crops,” he says. “If any of them fail or collapse, we have to orchestrate a major rework of the global consumer manufacturing industry.”
Roc-Sennett says regulators are encouraging the use of metrics to provide more visibility into the problem. As an example, under a new law called Article 29, he says insurance companies in France are required to report on the impact of biodiversity from their holdings. A measure he is using is the Mean Species Abundance (MSA), which estimates the impact investment companies make on the diversity. This importantly includes their supply chains as few major food companies manage their own farms. As more data is accumulated, he says, it will develop into a picture of where the biodiversity impact is most pronounced, and where responsibility for stewardship of land should fall.
