Legal risks related to biodiversity loss in the seafood and agriculture sectors
Global biodiversity is declining at an unprecedented rate, posing a material financial risk for companies in the seafood and agriculture sectors, and therefore also to the financial institutions that finance them.
This includes legal risk. Just as corporate climate change litigation has advanced in courtrooms globally, legal action tackling biodiversity loss is poised to be the next frontier in environmental litigation if action is not urgently taken.
ClientEarth’s report looks at the potential legal and litigation risks associated with biodiversity impacts and dependencies for the seafood and agriculture sectors. It provides an overview of applicable laws that may give rise to legal liabilities associated with biodiversity loss, and offers concrete steps to mitigate the risks.
- Companies in the seafood and agricultural sectors are acutely exposed to legal risk due to their dependence on ecosystem services such as raw materials, clean water, pollination, and a regulated climate to produce goods and services.
- They are also dominant drivers of negative impacts that cause biodiversity loss, including pollution, invasive species, climate change and overexploitation of the environment.
- These impacts and dependencies give rise to financial risks for companies and financial institutions that may trigger corporate and financial law duties.
- Embedding biodiversity considerations in decision-making processes, properly identifying and assessing biodiversity impacts, dependencies, and risks through due diligence, and disclosing them to relevant stakeholders accordingly will help mitigate the growing legal risk.
- Financial institutions should identify and address environmental risks in their seafood and agriculture-related investments and have policies in place to mitigate their own exposure to biodiversity-related risks.