News ABN Amro
ABN Amro: 5 billion damage to biodiversity by agri
According to research by ABN Amro and the Impact Institute, Dutch production and consumption cause almost €40 billion in damage to biodiversity. Of this, 23% is accounted for by companies active in the agricultural sector or the food industry. One of the report's recommendations is that governments require companies to calculate environmental damage in 'real prices'.
The study charted the damage to the biodiversity of 65 industries through trade with 140 countries and the use of 42 types of crops. When calculating the damage, different ecosystems have been taken into account, for example land use or air pollution is more harmful in a tropical rainforest than in a desert. The calculated damage corresponds to approximately 5% of the GDP of the Netherlands in the year 2020, or just under 2.300 euros per inhabitant.
With €5,3 billion, industry makes the largest contribution to biodiversity damage, followed by business services with €5,2 billion. Of the calculated €39,8 billion, €4,9 billion is accounted for by companies active in the agricultural sector and €4,3 billion by branches in the food industry. The share of these sectors in the Netherlands in biodiversity damage is therefore approximately 23%, according to the report. According to the report, the damage is relatively highest on cattle farms.
But less obvious sectors also contribute. For example, the IT use of banks and business service providers causes environmental damage through high energy consumption in data centers and the use of scarce metals in hardware. According to the bank, the key to solving this crisis lies not only with the agricultural sector or the food industry, but also with financial institutions. "There, the damage to biodiversity per euro is lower, but because of their large representation in the Dutch economy, they still account for an important part of this damage."
In this inventory, the damage to biodiversity is subdivided into channels, such as air and water pollution, contribution to climate change and land use. Two-thirds of the damage to biodiversity caused by cattle farmers is caused by water pollution, partly as a result of the use of artificial fertilizers. In water transport, a large part of the damage to biodiversity takes place precisely through air pollution, according to the report.
A large part of the damage does not take place at the industries themselves, but at customers or suppliers. "For example, 70% of the damage occurs via trading partners abroad, such as when cocoa imports coincide with land use in Ivory Coast and Ghana or the import of beef with water pollution in Argentina."
Real price
The cheap supply of less sustainable variants influences market demand, including in the agri-food chain, according to the report. "A solution to this could be for governments to oblige companies to include environmental damage in the price of products, to calculate with 'real prices' in which environmental costs are included as much as possible. This is already happening partly because companies that fall under the European emissions trading system ETS allowances have to pay for CO2 emissions."
"An organic farmer who does not use chemical pesticides and instead removes weeds mechanically and manually has higher labor costs," the report gives as an example. "And organic livestock farmers who give animals extra space make less yield per animal. Although less sustainable competitors incur more social costs, they can largely pass them on."
Ecologist or biologist in company top
Another recommendation that the bank makes in the report is to make damage reduction part of the business operations, for example by appointing an ecologist or biologist at the top of the company. "Setting concrete objectives for companies and employees, and making them at least as important as financial indicators, is also important here," says Sonny Duijn, theme sector economist at ABN Amro in a press release. "In addition, the government plays a crucial role. A shift from the focus on economic growth, often expressed in GDP, to broader welfare indicators as a basis for policy is needed. For example, income equality, biodiversity and health are also included as a measure of success."
Linda van Eekeres
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