Business strategy and biodiversity - an exploration based on Australian case studies

Abstract

Biodiversity, the variability among living organisms and the ecological complexes of which they are part, is the basis of Earth's 'web of life' and is the essence of a wide range of values, benefits, resources, goods and ecosystem services that are essential for human survival and well-being, and for the economy. Biodiversity is foundational to Earth's natural capital, interacting with and contributing to the other forms of capital: financial, manufactured, social, organisational and human. The scale and rate of biodiversity loss are increasingly regarded as a global crisis and have become the focus of multiple responses at global, national and local levels. One growing area of focus is business decision-making. The interaction of biodiversity with these processes in individual firms is complex and diverse, ranging from obvious and immediate - for example, for firms in the natural resources or ecosystem services sectors - to implicit and distant - as in many manufacturing or service sectors. While there is institutional pressure through global business networks and civil society for firms to adopt 'sustainability' goals, and biodiversity is recognised as a strategic business issue by many, there are few detailed studies of how individual firms understand the relationship of biodiversity with the firm's other resources, how they take account of biodiversity in decision-making, and whether it should and how it might be integrated into the firm's strategies. This knowledge gap for Australian businesses is the subject of this study, which uses a qualitative case-study approach. It examines both the recognition of biodiversity as a strategic issue for firms and its detailed interaction with firms' business strategies. Two firms in each of the mining, primary production and financial services sectors were selected as case studies, and a conceptual framework was developed to assess the cases. This framework integrates a resource-based view of the firm with that drawn from a sustainable-livelihoods approach. The research was based on interviews with each firm's staff and stakeholders; firms' documents; and review of the literature. Case-study firms' recognition of biodiversity was contingent on the respective sector and aspects of the firms' character and history. Stakeholder pressure was a common feature; presence in the mining and financial services sectors and absence in the primary production sector. The presence of individuals with biodiversity knowledge and firms' absorptive capacity were also important to firm recognition. The integrated business strategy framework provided a holistic picture of the interactions between different types of firm strategic resources and core capabilities, including biodiversity. Complex and dynamic interactions between social, natural and financial capital, with potential to affect firms' competitive advantage, were evident in all cases. These results have implications for business strategy theory; the framework developed for the study may provide a conceptual bridge between traditional approaches to business strategy theory and attempts to integrate sustainability goals into individual firms' business strategies. The integration of biodiversity in firm resources, in terms outlined in this study, may assist the global agenda of mainstreaming biodiversity in business strategy.