【2011 Council on Competitiveness-Nippon Study Group Final Report】【Business and Biodiversity Study Group】---Gaining business competitiveness through biodiversity conservation--Final ReportFebruary 7, 2012

Council on Competitiveness-Nippon (COCN)
Contact us: cocn.office.aj@hitachi.com

i【Executive Summary】】■Background and purpose of starting this study group
The 10th Conference of the Parties to the Convention on Biological Diversity (COP 10) was held in
Nagoya in October 2011, in which the parties to the convention adopted a new strategic plan (Aichi
Targets) toward 2020 and the Nagoya Protocol on access to genetic resources and the fair and equitable
sharing of benefits arising from their utilization. Under these circumstances, companies have been
increasingly facing demands that they address issues concerning biodiversity in terms of resource
consumption and changes in natural environments associated with their business activities. Companies
should voluntarily and actively enhance their efforts to address biodiversity, considering how they canevaluate their business activities in this respect and contribute to biodiversity conservation through theirbusiness activities.
■Viewpoint and scope of the study
In the 2010 study group, to learn from existing researches and practices in Japan and abroad, we
invited experts who gave us lectures and advice about the latest trend, shared information aboutmeasures taken by each member company of the study group, and identified steps taken on biodiversity
conservation by some member companies in their value chains as well as challenges to be addressed.
In the 2011 study group, we identified certain factors in business to be addressed with respect tobiodiversity, and developed a checklist to assess their impacts. The PDCA (plan, do, check and action)
cycle, which companies can use to understand the weaknesses of their measures and improve on them,is essential for companies to make progress in biodiversity conservation. The purpose of this checklist
is to help each company to understand how they influence biodiversity by assessing their performanceon each question, and continue to make progress in their efforts by trying to improve the score.
Test runs were given on the developed checklist by a total of 23 companies consisting of the member
companies of this study group and some of the COCN member companies. Problems they encounteredin the tests were identified and corrected.
The results of the tests by industry sector show that all industries have scored approximately 3 out of
5 points with no major differences among sectors. The score of the manufacturing industry (electronics)
is higher than that of the other industries, with particularly higher scores in the disposal and reuse stage
and the nature conservation stage. The other industries should improve their performances in thesestages by learning from the steps taken by the manufacturing (electronics) industry.
■Recommendations, desirable role-sharing among industry, government and academy, and possible
impacts created by the implementation of the recommendations
In 2010, the first year of this 2-year project, we identified factors that are already being addressed bysome companies in their value chains as well as factors that need to be addressed for the conservationof biodiversity. In 2011 we developed a biodiversity checklist that can be used by all industries basedon the factors identified in 2010. The Nagoya Chamber of Commerce & Industry created a guidebook
for their member companies, "Business and Biodiversity - how to understand their relationships andtake steps based on the Aichi Targets and Nagoya Protocol", in which they described the content of thischecklist.
In addition, we are collaborating with the ISO Working Group on Biodiversity Standards ofInternational Standard Innovation Technology Research Association (IS-INOTEK) to develop a
proposal for an international standard.

The ISO Working Group on Biodiversity Standards has set a goal that Japan will propose aninternational standard on biodiversity, toward which they have continued discussion since October,2011. We have requested the working group to use our Business and Biodiversity Checklist as one of
the KPIs used in the discussion. We are currently working to see that the checklist will be adopted in
the proposal. We will also promote this checklist to be used in projects planned by The World BusinessCouncil for Sustainable Development (WBCSD) as a performance evaluation tool for businesses
developed by Japanese companies.
We would like to request support from the Technical Regulations, Standards and Conformity
Assessment Policy Division, Industrial Science and Technology Policy and Environment Bureau,
Ministry of Economy, Trade and Industry to the activities of this working group to propose
international standards.

【Table of Contents】【Introduction】 ................................................................................................................................... 1【List of Members】…………………………………………………………………………………...3
1.

Previous Efforts on Biodiversity ................................................................................................... 4

1.1.

Concepts of Ecosystem and Biodiversity ..................................................................... 4

1.2.

International Trends ..................................................................................................... 5

1.3.

Outline of the Domestic Legal Framework .................................................................. 7

1.4.

Relationships between Biodiversity and Business ....................................................... 7

2.

Trends in Biodiversity Relating to Overall Business Operations ................................................ 10

2.1.

Relationships between Business and Biodiversity ..................................................... 10

2.2.

Emerging Risks Related to Biodiversity .................................................................... 10

2.3.

Current Policies .......................................................................................................... 11

2.4.

What Is Expected of Companies ................................................................................ 11

2.5.
2.6.

Necessary Legislative Development .......................................................................... 12
Current Trends in Biodiversity ................................................................................... 122.6.1 Corporate Ecosystem Services Review (ESR) ....................................................... 122.6.2 Guide to Corporate Ecosystem Valuation (CEV) ................................................... 14
2.6.3 JHEP: quantitative valuation of habitat suitability for wildlife and vegetation ...... 16
2.6.4 About the City Biodiversity Index (CBI) ............................................................... 183.

2.6.5 Overview of TEEB ................................................................................................. 21
Checklist to Take Biodiversity into Account in Business Activities ........................................... 23

3.1.

Purpose of the Checklist ............................................................................................. 23

3.2.
3.3.

Overview of the Checklist .......................................................................................... 23
Design ........................................................................................................................ 24

3.4.

Procurement ............................................................................................................... 25

3.5.
3.6.

Manufacturing ............................................................................................................ 26
Transportation ............................................................................................................ 28

3.7.

Use and Operation ...................................................................................................... 29

3.8.
3.9.

Disposal and Reuse .................................................................................................... 31
Land Use .................................................................................................................... 32

3.10.

Nature Conservation ................................................................................................... 34

3.11. Business Opportunities ............................................................................................... 36
4. Checklist Development Process and Test Results ....................................................................... 38
4.1 Checklist Development Process ......................................................................................... 38
4.2 Checklist Test Results (Test 3)........................................................................................... 38
5. Recommendations, Necessary Role-Sharing among Industry, Government and Academy, andPossible Impacts Created by Implementing the Recommendations ........................................................ 41
List of Abbreviations ........................................................................................................................... 42
References ........................................................................................................................................... 43・【Introduction】】
Background and purpose of proposing this projectAt the 10th Conference of the Parties to the Convention on Biological Diversity (COP 10) held in
Nagoya in October 2011, the parties to the convention adopted a new strategic plan (Aichi Targets)toward 2020 and the Nagoya Protocol on access to genetic resources and the fair and equitable sharingof benefits arising from their utilization.
Five strategic targets and 20 specific targets were adopted in the new strategic plan. Many of themare qualitative goals with some quantitative goals including a 50% reduction in the rate of erosion ofnatural habitats, conservation of 17 % of terrestrial and inland water and 10 % of coastal and marine
areas, and restoration of 15 % of degraded ecosystems.
In addition, the Nagoya Protocol was adopted which stipulated that the benefits arising from theutilization of genetic resources shall be shared in a fair and equitable way based on mutually agreed
conditions, access to genetic resources shall be subject to prior consent, and each party shall designate
one or more checkpoints for the purpose of monitoring.
Facing increasing demands that companies take steps to conserve biodiversity, companies engaged in
production activities which consume resources and change natural environments are trying to find out
how they can evaluate their own business activities in this respect and contribute to biodiversity
conservation through their business activities. In 2010, under these circumstances, to learn fromexisting researches and practices in Japan and abroad, we invited experts who gave us lectures andadvice about the latest trend, shared information about measures taken by each member company of thestudy group, and identified steps already taken on conservation of biodiversity by the companies intheir value chains and challenges to be addressed. In 2011, the second year, we developed a checklist toevaluate the effects of measures taken by companies to address biodiversity conservation. In developing
the checklist, we focused on the lifecycles of goods and services, and compiled action items to beconsidered by companies in each stage of those lifecycles. By conducting a self-assessment using thischecklist, companies will be able to not only follow the PDCA cycle but also raise overall awareness of
their impact on biodiversity, a problem that should be addressed by the business community as a whole
to realize a sustainable society.



Goals in and effects on strengthening industrial competitiveness we aim to achieve
We need to be involved in activities to reduce impacts of business activities on biodiversity (e.g.,
overharvesting wildlife significantly more than natural resilience, excessive consumption of forest
resources, degradation of ecosystem services which is hard to repair, and fragmentation and loss ofhabitats caused by a drastic change in habitat environments by mining operations).
In 2010 we identified factors that are already being addressed by some companies in their value
chains as well as factors that require improvement for the conservation of biodiversity. In 2011 wedeveloped a biodiversity checklist that can be used by all industries, based on the factors identified in2010. The Nagoya Chamber of Commerce & Industry created a guidebook for their member companies,"Business and Biodiversity - how to understand their relationships and take steps based on the Aichi
Targets and Nagoya Protocol", in which they described the content of this checklist.
In addition, we are collaborating with the ISO Working Group on Biodiversity Standards ofInternational Standard Innovation Technology Research Association (IS-INOTEK) which wasestablished in January 2011 to develop a proposal for an international standard.
1

The ISO Working Group on Biodiversity Standards has set a goal for Japan to propose aninternational standard on biodiversity, toward which they have continued discussion since October
2011. We have requested the working group to use our Business and Biodiversity Checklist as one of
the KPIs used in the discussion. We are currently working to see that the checklist will be adopted in
the proposal. We would like to request support from the Technical Regulations, Standards andConformity Assessment Policy Division, Industrial Science and Technology Policy and Environment
Bureau, Ministry of Economy, Trade and Industry to the activities of this working group to propose aninternational standard.

Council on Competitiveness-Nippon
Sadayuki Sakakibara
Chairman of the Board2

【List of Members】】
LeaderShigeru Azuhata

Senior Vice President and Executive Officer, Hitachi,Ltd., Hitachi Group Chief Environmental Strategy Officer

Members
Atsushi Watari
Haruo Takayama

Kajima Corporation
Kajima Corporation

Mamoru Nasu

Shimizu Corporation

Takahiro Ishida
Tsukasa Kanai

Sharp Corporation
The Sumitomo Trust and Banking Co., Ltd.

Fumiaki Goto

The Sumitomo Trust and Banking Co., Ltd.

Kiichiro Hayashi
Koichi Inagaki

Nagoya University
NEC Corporation

Takeshi Takagi

Hitachi Chemical Co., Ltd.

Yuri Itoh
Ayako Kohno

Hitachi, Ltd.
Hitachi, Ltd.

Yuka Maezawa

Fujitsu, Ltd.

Hiroki Yamaguchi
Akihiro Suzuki

Mori Building Co., Ltd.
Mori Building Co., Ltd.

Hiroaki Kondo

National Institute of Advanced Industrial Science andNaoki Adachi
Chiseki Haginoya

Technology
Response Ability, Inc.
Hitachi Research InstituteLecturers/observers
Yoichi Takahashi

Hitachi, Ltd.

Takao Nakatsuka

Council on Competitiveness-Nippon (COCN)

Manabu Hirano
Yoshihiro Ienaka

Hitachi, Ltd.
Hitachi Research Institute

Secretariat

3

1.

Previous Efforts on Biodiversity

1.1.

Concepts of Ecosystem and Biodiversity
・Figure 1.1 illustrates the concepts of the entire ecosystem, biodiversity and ecosystem services.

Biodiversity is the diversity of organisms living in ecosystems and habitat environments. Benefits fromecosystems can be defined as ecosystem services.

Figure 1.5 Relations between the ecosystem and corporate activities
Source: documents of United Nation’s Convention on Biological Diversity
Ecosystem services are the benefits humans receive from ecosystems, which can be categorized into
the services shown in Table 1.1.
Table 1.1

Main ecosystem service categories

Provisioning

The services that supply resources indispensable to human life including food,services

fresh water, wood and fiber, and fuel including wood.

Regulating services

The services that regulate environment including regulation of climate, flood,
disease and water purification.
Artificial alternatives require huge costs.

Cultural services

The services that give spiritual enrichment, aesthetic joy, bases of religious orsocial structures, and recreational opportunities.

Supporting services

The services that support the production of "provisioning services", "regulating
services" and "cultural services" including generation of oxygen by
photosynthesis, soil formation, nutrient and salt cycling and water cycling.

Source: Millennium Ecosystem Assessment

According to the Convention on Biological Diversity, "'Biological diversity' means the variability
among living organisms from all sources … this includes diversity within species, between species andof ecosystems". There are 3 levels of diversity shown in Table 1.2.

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Table 1.2

Three levels of biodiversity

Biodiversity within species (genetic)

Genetic differences within the same species

Biodiversity between species

Differences between species

Biodiversity of ecosystems

Different types of nature (forests, swamps, mudflats, coral reefs,
rivers, etc.)

Source: material provided by Hitachi, Ltd.
1.2.

International Trends
・

Based on the awareness that biodiversity supports the existence of humans and provides a variety of
benefits to humans, which makes it important for the whole world to address conservation of
biodiversity, the Convention on Biological Diversity was opened for signature in 1992 at the United
Nations Conference on Environment and Development (UNCED, Earth Summit) held in Rio de Janeiro.
Japan signed it in May 1993. The Convention entered into force in December 1993. The Convention on
Biological Diversity states that its objectives are; (1) the conservation of biological diversity, (2) thesustainable use of its components, and (3) the fair and equitable sharing of the benefits arising out of
the utilization of genetic resources (ABS: access and benefit sharing).
In order to meet these objectives, the Conference of the Parties (COP) to the Convention on
Biochemical Diversity (CBD) is held approximately every 2 years as the forum where decisions are
made to advance implementation of the CBD. The CBD defines biological diversity as "the variability
among living organisms from all sources". The definition includes 3 aspects, "diversity of ecosystems","diversity between species" and "diversity within species", each of which benefits humans. For example,
we enjoy benefits such as oxygen generated through photosynthesis in forests and water source
recharge provided by "diversity of ecosystems", and "diversity between species" provides us withmethods to produce a larger amount of foodstuff including cereals, vegetables and livestock, and raw
materials to produce medicine. Moreover, "genetic diversity" which supports the entire biologicaldiversity is indispensable to all life on this planet including humans.
The Economics of Ecosystems and Biodiversity (TEEB) study conducted by the United Nations
Environment Programme (UNEP) defines ecosystems as "a dynamic complex of plant, animal, andmicroorganism communities and the non-living environment interacting as a functional unit". These
different benefits we receive from ecosystems rich in biological diversity are called "ecosystemservices". While these concepts were shared among an increasing number of people in the world, thefollowing major targets were adopted at the COPs after the first Conference of the Parties (COP1) in
1994.
At the 6th Conference of the Parties (COP6) held in the Hague, the Netherlands, in 2002, the Parties
to the Convention adopted a strategic target (2010 Biodiversity Target) "to achieve by 2010 a
significant reduction of the current rate of biodiversity loss at the global, regional and national level as acontribution to poverty alleviation and to the benefit of all life on Earth".
At the 10th Conference of the Parties (COP10) held in Nagoya, Japan, in 2010, the Parties to theConvention adopted the Nagoya Protocol, a set of rules concerning the utilization of genetic resources
and benefit sharing, and the Aichi Targets, a set of global targets towards 2020. Their details are shownin table 1.3 and table 1.4 respectively.
5

Table 1.3
No.

Aichi Targets
Target1

People are aware of the values of biodiversity and the steps they can take to conserve it.

2

Biodiversity values have been integrated into national and local strategies and are being
incorporated into national accounting, as appropriate, and reporting systems.

3

Incentives, including subsidies, harmful to biodiversity are eliminated or reformed, and positive
incentives for the conservation and sustainable use of biodiversity are developed and applied.

4

Stakeholders including business have implemented plans for sustainable production andconsumption.

5

The rate of loss of all natural habitats, including forests, is at least halved and where feasible
brought close to zero, and degradation and fragmentation is significantly reduced.

6

Marine resources are and harvested sustainably.

7

Agriculture, aquaculture and forestry are managed sustainably.

8

Pollution has been brought to levels that are not detrimental.

9

Invasive alien species are controlled or eradicated.

10

Detrimental effects on coral reefs and other vulnerable ecosystems impacted by climate changeor ocean acidification are minimized.

11

At least 17 per cent of terrestrial and inland water and 10 per cent of marine areas are conserved
through protected areas and other measures.

12

The extinction or decline of known threatened species has been prevented.

13

The genetic diversity of cultivated plants and domesticated animals is maintained, and its
erosion is minimized.

14

Essential services are provided by ecosystems, and restored and safeguarded.

15

At least 15 per cent of degraded ecosystems are restored, contributing to climate change
mitigation and adaptation.

16

The Nagoya Protocol on ABS is in force and operational.

17

Each Party has developed and has implemented an effective and participatory national
biodiversity strategy.

18

Traditional knowledge is respected and fully integrated in implementation of the Convention.

19

Knowledge, the science base and technologies relating to biodiversity are improved.

20

The mobilization of financial resources for effectively implementing the Strategic Plan should
increase substantially from the current levels.

Source: adapted from a document prepared by the Japanese Ministry of the Environment

Table 1.4

Outline of the Nagoya Protocol

The benefits arising from the utilization of genetic resources shall be shared in a fair and equitable way
to contribute to the conservation of biological diversity and the sustainable use of its components.
The benefits arising from the utilization of traditional knowledge associated with genetic resources
shall be shared in a fair and equitable way with indigenous and local communities holding suchknowledge.
Special considerations shall be given to non-commercial researches and cases of emergencies.
Access to genetic resources shall be subject to the prior consent of the Party providing such resources.
6Each Party shall make information on procedures available to applicants seeking access to genetic
resources.
Each Party shall designate checkpoints to monitor the utilization of genetic resources.
The Millennium Ecosystem Assessment conducted by the United Nations from 2001 to 2005 pointed
out that "human activity has resulted in a substantial and irreversible change in biological diversity inthe past 50 years". The main causes of the degradation of biodiversity included the loss of habitats
including forests and overconsumption of biological resources. It is important that humans who receive
many benefits from ecosystem services will promote ecosystem conservation to secure biodiversity.
In April 2011 the World Business Council for Sustainable Development (WBCSD) published Guide
to Corporate Ecosystem Valuation (CEV), a framework to evaluate the relationships between businessactivities and ecosystems quantitatively.
In January 2012 the Business and Biodiversity Offsets Programme (BBOP) released Standard on
Biodiversity Offsets which includes principles, criteria and indicators, effectively starting to create
standards. Also in January 2012, The International Finance Corporation (IFC) revised the performancestandard, fully integrating the concept of biodiversity offset.
1.3.

Outline of the Domestic Legal Framework
・The Basic Environmental Law enacted in 1993 establishes three basic principles for environmental
preservation: enjoyment and inheritance of the bounties of the environment, creation of a society
ensuring sustainable development with reduced environmental load, and active promotion of global
environmental conservation through international cooperation. It also establishes that, based on theseprinciples, various policies for environmental conservation shall be implemented in an integrated andsystematic manner in Japan. In addition, the Basic Environmental Plan was established pursuant to
Article 15 of the Law.
In accordance with the concept of the Law, the Basic Act on Biodiversity was enacted in 2008 which
establishes basic principles and relevant policies on conservation and sustainable use of biodiversity.
The National Biodiversity Strategy was formulated pursuant to Article 11 of the Act. The first statutory
strategy based on the Basic Act on Biodiversity, the National Biodiversity Strategy 2010, wasannounced in March 2010, which set short and long term goals. Biodiversity was to be secured byindividual laws pursuant to the Basic Act mentioned above.
In December 2010 the Act on the Promotion of Activities to Conserve Biodiversity throughCooperation among Local Diversified Actors (Act on Local Cooperation on Biodiversity) was enacted
to conserve rich biodiversity by promoting biodiversity conservation activities carried out throughcoordination among local diversified actors. The Act was put in force in October 2011.
1.4.

Relationships between Biodiversity and Business
Figure 1.2 shows how business is related with ecosystems with biodiversity. On one hand, companies

receive free ecosystem services including provision of raw materials such as wood and clear water, andgive positive effects to ecosystems through their goods and services to conserve ecosystems and nature
protection activities carried out by employees. On the other hand, companies put environmental load to7

ecosystems. The benefits companies enjoy will be degraded if the biodiversity of ecosystems isdegraded. Possible relationships between ecosystems and steps taken by companies to minimize
environmental load are shown in Table 1.5.

Figure 1.2 Relationships between ecosystems and business activities
Source: Hitachi, Ltd.
Table 1.5 Measures for reducing environmental load and how they relate to ecosystems
Energy saving

CO2 emissions contribute to global warming and climate change. Temperaturechanges in ecosystems will lead to destruction of ecosystems (e.g., changes in sea
water temperatures have already shown effects in coral reefs and other areas).

Water and gas

Discharging contaminated water and/or gas without purification will lead todischarge

destruction of ecosystems. To what extent water and/or gas needs to be purified
varies with each region.

PromotionofMining of resources requires a modification of a wide area, which leads to

3Rs

destruction of ecosystems in many cases. Reducing resource use will lead to the
reduction of the area to be modified, and protect the ecosystem in the saved area.

Waste

The land used for landfill causes modifications to ecosystems. In addition, thetreatment

burden of road traffic used for waste transportation may also have effects on
ecosystems.

Biological

Using wood materials produced by excessive logging operations destructive toresources
includingecosystems will cause trouble. Using raw materials produced by properly
managed operations which take ecosystem conservation into account will

paper
wood

and

contribute to ecosystem conservation. Properly managed biological materials will
be sustainable raw materials.

Source: Hitachi, Ltd.
In recent years, increased awareness of the relationships between biodiversity and business has led to
specific policies including the Guidelines for Private Sector Engagement in Biodiversity released by the8Japanese Ministry of the Environment in 2009. Keidanren (Japan Business Federation) also published"Declaration of Biodiversity" in 2009, and encouraged member companies to make active efforts by
publishing "A Guide for Action Agenda" which helps companies to start taking concrete actions. The
nature of the relationship a business has with the ecosystem surrounding them depends on the category
and size of each business. It is important for a business to start by trying to understand the nature of therelationship between its business activities and the ecosystem, and then, while taking feasibility into
consideration, proceed to take specific steps in order of priority.

92.

Trends in Biodiversity Relating to Overall Business Operations

2.1.

Relationships between Business and Biodiversity
・Nowadays the international community puts strong emphasis on the importance of conserving

biodiversity, which has rapidly attracted attention in the business world. The Convention on Biological
Diversity entered in to force in 1993, several conferences of the parties (COP) have been held, whichhave resulted in a number of international agreements. The 10th Conference of the Parties to theConvention on Biological Diversity (COP 10) was held in Nagoya in October 2010, in which theparties to the convention adopted Aichi Targets, a set of global targets for conservation toward 2020,
and the Nagoya Protocol, a set of international rules on ABS. On November 29th, 2010, 24 board
member companies of the Consumer Goods Forum headquartered in Paris committed themselves toreducing forest destruction by development to net zero by 2020. Policy implementation has progressedalso in Japan, including the amendment of the National Biodiversity Strategy (2007) and theimplementation of the Basic Act on Biodiversity (2008). Some companies started to take steps on
biodiversity conservation by setting a voluntary policy or a guideline on biodiversity. But a more active
engagement is desirable in view of the important role biodiversity is likely to play in economy in the
future. This study group has summarized policies on biodiversity conservation needed in the future tostrengthen Japan's industrial competitiveness.
2.2.

Emerging Risks Related to Biodiversity
・The demand for ecosystem-conscious raw materials has increased as awareness for biodiversity

conservation is raised among the international community and consumers. In addition to forest
certification programs and seafood certification programs that have become known in Japan to someextent, an increasing number of agricultural produce certification programs including those for coffee,
palm oil, soybean and tea have been launched and implemented. However, there is a limit to the supplyof this type of materials, and especially in the future, it might become difficult to obtain enoughmaterials even if companies are willing to procure such materials. We should be aware in the first placethat yields in agriculture, forestry and fishery in general are likely to become unstable because of the
impacts by climate change, making a stable procurement of biological resources more difficult. With
respect to mineral resources, mining and smelter operations have been attacked by armed groups who
accused the companies of not responding to their demands about the problems caused by them such as
forest destruction by mine developments and environmental pollution by the refineries. In July 2010,
the US Financial Regulation Reform bill was signed into law which requires companies that use
minerals produced in the Democratic Republic of Congo or an adjoining country to file an annual reportwith the Securities and Exchange Commission and disclose relevant information. The law will comeinto effect in 2012. In May 2011, OECD developed a guidance to help companies to avoid risks
associated with minerals produced in conflict-afflicted areas, Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and is carrying out projects toimplement the guidance.
An increasing number of cases in which groups of people including NGOs criticize companies fortheir impact on biodiversity can also be a major risk to companies. For example, certain toys were
boycotted because the paper used for their packaging was produced using wood originating from10

tropical rainforests, and some Japanese companies were singled out and criticized for having deals withpaper-manufacturing companies that were engaged in logging of natural forests. As a result, theJapanese companies stopped dealing with the manufacturers. Simply complying with environmental
standards is no longer good enough. Now companies are expected to reduce the impacts they and their
entire supply chains have on ecosystems around them.
Financing is another aspect to consider because an increasing number of investment and loan
standards adopted by financial institutes include each company's stance on biodiversity.
2.3.

Current Policies
・As described in the Guidelines for Private Sector Engagement in Biodiversity released by the

Ministry of the Environment in 2009, companies in Japan are expected to work actively on
conservation of biodiversity. The guidelines demand that companies conserve biodiversity which
supports healthy ecosystems through their own business activities to use ecosystem services
indispensable to business operations in a sustainable way. To this end, they encourage companies tounderstand the relationship between their business activities and biodiversity, and avoid or minimize
the impact they have on biodiversity. They also demand that each company develop a system toconserve biodiversity based on a long-term point of view.
However, the guidelines alone do not serve as incentives strong enough for companies to start
making efforts to conserve biodiversity. We believe more aggressive policy incentives are needed todrive companies' efforts.
In the international arena, one of the Aichi Targets recommends that subsidies harmful tobiodiversity should be eliminated, and positive incentives should be developed and applied, indicatingthat introducing policy incentives by governments has been agreed. Japan, the COP10 chair, is expected
to implement active policies not only to strengthen Japanese companies' competitiveness but also tofulfill Japan's international responsibility.
2.4.

What is Expected of Companies
・
Taking into consideration the situation mentioned above, companies should not wait for thegovernment to develop new policies, but they must voluntarily and aggressively enhance their efforts toconserve biodiversity to minimize risks of their own, and manage those risks in an appropriate manner
which helps them in strengthening competitiveness.
When actually launching biodiversity conservation activities, companies need to integrate them into
their management system through managing methods including the PDCA cycle. In order to do that,first they need to understand the relationship between their business activities and biodiversity, anddevelop indicators they can use to mitigate their impact on biodiversity.
In addition, it is important for them to develop various guidelines to make their conservation
activities a company-wide, thorough and integrated program. They must pay attention to the fact thatthe relationships between their business activities and biodiversity can cover a variety of areas
including manufacturing, procurement processes, land use by their facilities, and use and disposal ofgoods by their customers. Therefore they need to develop guidelines that cover the whole lifecycle ofgoods and/or services.
11

2.5.

Necessary Legislative Development
・
Development of legislation is important to fulfill the international responsibility of the government

and administration as mentioned above, help companies to make efforts for biodiversity and strengthen
their competitiveness, and conserve biological resources in Japan as a country rich in biodiversity. The
following in particular need prompt legislative response.
・

To develop a system to conserve domestic biological resources and properly manage their use to
implement a domestic framework for the ABS concept as a resource providing country.

・To implement strategic environmental assessments which help to conserve important
ecosystems, encourage fair load sharing among relevant businesses and create a new industry
sector to conserve and restore ecosystems.

・To develop government procurement standards that give full consideration to biodiversity
conservation. In particular, standards on legality and sustainability should be more clearly・

defined. They also should consider strict control of compliance.
To encourage local governments to develop biodiversity action plans, and involve local
companies.

・To make biodiversity-conscious business models created by Japanese companies good examples
for developing countries, which will provide an additional value to Japanese companies thathelps expand their business to other countries.

2.6.

Current Trends in Biodiversity
・To understand the relationships between business and biodiversity, there are Corporate Ecosystem
Services Review (ESR) and Corporate Ecosystem Valuation (CEV) for a company’s strategic tools,
City Biodiversity Index (CBI) and Japan Habitat Evaluation and Certification Program (JHEP/HEP) forland use in cities, and The Economics of Ecosystems and Biodiversity (TEEB) to provide basic data toquantitate economic values. Approaches taken by financial institutions that have a large influence oncompanies' economic aspects also have become increasingly important. The outline of each tool is
described below.
2.6.1 Corporate Ecosystem Services Review (ESR)(1) Overview
The Corporate Ecosystem Services Review (ESR) is a systematic methodology to support companies
to actively develop strategies for managing business risks and opportunities arising from the company's
dependence and impact on ecosystems. Companies can use ESR as a methodology to understand towhat extent their business activities depend on, and have impact on, ecosystems.
(2) Steps
ESR is conducted by taking the following steps.
1) Select the scope2) Identify priority ecosystem services
3) Analyze trends in priority services4) Identify business risks and opportunities
5) Develop strategies12(3) Business decisions and processes the ESR can support
・ Development of corporate, entity or market strategies
・ Planning for corporate infrastructure projects
・ Identification of new markets, products or services
・ Identification of new revenue sources from corporate landholdings・ Strategies to engage policy makers
・ Environmental impact assessments
・ Environmental reporting(4) What the ESR is not
・ It does not identify every environmental issue.
・ It does not address every environmental issue.
・ It is not strictly quantitative.
・ It does not depend on economic valuation of ecosystem services.
(5) Strategies to address business risks
In general, there are two main methodologies to address business risks.
(1) To establish a goal in advance to keep risk factors from arising, and develop the best
preventive steps that can be taken at the moment to accomplish the goal (e.g., zero accidents
initiatives in production sites).
(2) To take steps that can be taken at the moment, being concerned about uncertainties that may⇒

lie ahead in the future (e.g., prevention measures for a new type of influenza).
Risk mitigation measures concerning biodiversity/ecosystems are similar to those taken to

reduce business risks in general. There are the best possible measures and methodologies in eachcase.
The ESR can be downloaded from:http://www.wri.org/publication/corporate-ecosystem-services-review
http://www.wbcsd.org/pages/edocument/edocumentdetails.aspx?id=28&nosearchcontextkey=true(Reference) About WBCSD
World Business Council for Sustainable Development (WBCSD) is an organization which aims
to encourage the global business community to take action to create a sustainable future for
economy, environment, and society.
Member companies: 200 global companies with advanced environmental policies
Purpose: to improve the quality of environmental efforts by the business communityand create a sustainable society
Focus areas (FA):1) Business Role; 2) Energy & Climate; 3) Development; 4) Ecosystems

13

2.6.2 Guide to Corporate Ecosystem Valuation (CEV)– A guide to the business community and case reports –(1) Participation in the CEV road test: purposes and expectations
Hitachi Chemical, as a core member of the World Business Council for Sustainable Development(WBCSD) Ecosystem Focus Area, has undertaken company-wide activities to contribute to ecosystemconservation since 2007. In 2009 the FA decided to launch a new program, Ecosystems Valuation
Initiative (EVI), to conduct quantitative valuations of the relationship between business and ecosystems
and develop new methodologies to understand business risks and opportunities. The WBCSD invited theirmember companies to take part in a road testing project for the program. Hitachi Chemical, along withother 14 WBCSD member companies, decided to conduct pilot projects to give feedback about ourexperiences, aiming to establish a new methodology.
Note: The report is titled Guide to Corporate Ecosystem Valuation (CEV), while EVI is the name of the
program.
In response to the invitation, Hitachi Chemical decided to take part in the road test for the following
purposes. First, they wanted to become an early adopter of a quantitative valuation methodology. The
findings of an ESR project conducted within the company had already made them realize that tools
developed by WBCSD were excellent methods to review ecosystem conservation activities from abusiness point of view. As the next step, they wanted to introduce a new concept to the company tovaluate ecosystem services quantitatively. Secondly, they wanted to integrate the new process into their
existing business processes. Looking at their business activities objectively, they found that a quantitative
valuation was a method they are familiar with in their routine business activities which they would not
feel uncomfortable utilizing for this purpose. They expect that integrating the quantitative valuation
method for ecosystem conservation activities into their existing business processes will enable them tolink this new "ecosystem" concept to their business strategy and gain a new added value.
(2) Overview of Hitachi Chemical's CEV road test(a) 5 stages

Stage 1: Scoping
CEV is a methodology which consists of 5 stages(Figure 2.1). The company defines the scope for thevaluation project in Stage 1, and develops a plan toStage 2: Planningundertake the project. Stages 1 and 2 comprise apreparation phase. Stage 3 involves the actual valuation
which is carried out through 9 steps. This stage produces

Stage 3: Valuation☆ 9 steps

specific numerical values and study results. Then in Stage
4, the findings acquired from the study results are applied
to influence the target business or region, or used forStage 4: Application

communicating with stakeholders. Lastly in Stage 5,
recommendations for embedding the valuation method
within company processes are provided.

Stage 5: Embedding
Figure 2.1: The five stages of the CEV

14

(b) Stage 3 (9 steps)
Stage 3 is the core of a CEV, carried out through 9 steps. Taking these 9 steps produces
quantitative and other results including specific numerical values. The 9 steps are:
Step 1: Define the company “aspect”.
Step 2: Establish the environmental baseline.
Step 3: Quantify the physico-chemical impacts and dependencies.
Step 4: Determine the environmental changes.
Step 5: Assess the relative significance of ecosystem services affected.
Step 6: Monetize selected changes to ecosystem services.
Step 7: Identify internal and external costs and benefits.
Step 8: Compare costs and/or benefits.
Step 9: Apply sensitivity analysis.
(c) Overview of the road test
The first step of the CEV road test run at Hitachi Chemical was to focus the test on one product,copper-clad laminate. The scope of the project was defined to understand the quantity of CO2 emission
produced during the manufacturing processes and its monetized value. CEV defines CO2 emission an
externality of ecosystem services. The main CEV procedures taken at Hitachi Chemical were:
1. To calculate the quantity of CO2 generated by 3 MCL manufacturing methods using the lifecycle
assessment (LCA) method.
(Note: the manufacturing methods are different to each other in the quantity and type of energy
used.)
2. To convert the quantity of CO2 emission (obtained in the above procedure) to CEV, i.e. monetizedvalues using the European market value of CO2.
(Note: the European value was used because a formal CO2 trade market had not yet been
established in Japan.)
3. To run a sensitivity analysis on the 3 manufacturing methods using the calculated data.
They want to utilize the results of the sensitivity analysis as reference to streamline their
manufacturing methods.
(d) What a CEV can/cannot do
Although CEV is a quantitative valuation method, it cannot be used (yet) to simply compare theresults obtained at Company A with those obtained at Company B. It is because CEV's methodology isdefined in such a way that the industry of each company and the scope of valuation, and hence its
results, depend on the targets of valuation, units of assessment, selection of results and other factors.
Undertaking a CEV has the advantage that it makes quantification possible, expressing the current
situation in numbers that are easier to understand and can be used for communications inside andoutside the company. However, there is a concern that these numbers may take on a life of their own
unless the conditions of each valuation project are fully understood. While chemical companies inparticular, including Hitachi Chemical, do not directly use many ecosystem services, CO2 emission was
selected as the target of a CEV project based on the knowledge that CO2 emission is indirectly related15

to ecosystem conservation. We should try to show the results of the project in a report in such a waythat the readers can easily understand the whole picture. CEV is purposely defined as a widely
applicable and flexible methodology so that it can comprehensively address issues that all companies inevery industry have with respect to quantitative valuation of ecosystems. As a result, when it is
implemented in actual road tests, the way to put together a project plan largely depends on the decisions
made by each road testing company.
Guide to Corporate Ecosystem Valuation can be downloaded from the following web page.
http://www.wbcsd.org/pages/edocument/edocumentdetails.aspx?id=104&nosearchcontextkey=true
2.6.3 JHEP: quantitative valuation of habitat suitability for wildlife and vegetation
Ecosystem Conservation Society - Japan (Incorporate Foundation)(1) Development of JHEPThe Economics of Ecosystems and Biodiversity (TEEB) study concludes "you cannot manage
what you do not measure". These days quantitative valuation is required for biodiversity

・

conservation as well as for global warming.
The quality of biodiversity was traditionally expressed in the area of green space, number oftrees planted, number of species inhabiting the area and other factors, but they did not give the・accurate quality of biodiversity.
For example, expanding the area of green space by introducing non-native tree species and alienhorticultural species would not improve biodiversity. In addition, results of biological surveys

・are greatly influenced by external factors such as the ability of researchers and the local
weather.
In that situation, the society has been communicating with the US Department of the Interior・

since 2000 to study a highly reliable quantitative evaluation method for biodiversity called the
Habitat Evaluation Procedures (HEP) which has been widely used in the US and othercountries.
With HEP the environmental structure of an area is not evaluated by confirming the existence of・

certain species but in terms of habitat suitability for wildlife. A number of evaluation species are
selected based on the environment type and size of the target area. Then a quantitativeevaluation is conducted on the environmental structure of the area using the habitat suitability
model which quantifies habitat suitability for each evaluation species (HSI model; Figure 2.2).

・
Solar

Soil

(Geothermal)

Air

Water

Figure 2.2 The HSI model which quantifies habitat suitability for each evaluation species
Source: Ecosystem Conservation Society – Japan・

Now the international community, seeking for conservation or restoration of biodiversity,
demands that companies should cause "no net loss" of biodiversity while they continue their

16

business activities, and aim for "net gain".
・

Taking these trends in society into consideration, and adjusting HEP's evaluation method using
baseline conditions accordingly, the society has developed the Japan Habitat Evaluation andCertification Program (JHEP) as a certification system which companies and others can use toprove their contribution to biodiversity based on quantitative evaluation results. In addition,
while HEP provides evaluation based on the habitat suitability index for wildlife, JHEP adds
another basis, the vegetation evaluation index, to allow a more accurate quantitative evaluation.

(2) About the JHEP・

The baseline year for the JHEP is 30 years before the year when either the land to be evaluatedis acquired or an application for acquisition is submitted.

・Based on the above condition, a comparison is made between (a) the accumulated value of
biodiversity for 50 years which is calculated based on the values obtained in the past 30 years
since the baseline year, and (b) the accumulated value of biodiversity for 50 years which is
calculated using estimated changes in the value of biodiversity during the period between thebaseline year and 50 years later. If (b) is equal to or higher than (a), it means the goal of "no net
loss" or "net gain" has been accomplished, which can be the basis for a certification throughapproval by the JHEP Review Committee comprising external academic experts.
・・

JHEP has the following characteristics.


It can objectively prove the effects of biodiversity efforts, whether large or small, basedon scientific data.
It can estimate the level of contribution of a plan to biodiversity, and certify the plan,even if it is still in the planning (design) stage.
It can reveal, in the course of evaluation, challenges in contributing to the conservationand improvement of biodiversity, highlighting the areas to put priority on and thedirection of improvement efforts.
The concepts and guidelines of the evaluation and the reports of certification review
results will be made public on the society's website to ensure the transparency of thecertification process.

(3) Certification case study
The Toranomon-Roppongi district urban redevelopment project (planned, designed and managed byMori Building Co. Ltd.,)・

The value of biodiversity of the redevelopment site:＋26.6 points (JHEP certification ranking:・AAA)
The following features of the redevelopment project helped to increase its evaluation value.
The area of green space accounts for about 40% of its effective open space (doubled

from the pre-project value)Its green space is planted mainly with native plant species, avoiding the use of

non-native species as much as possible.
The wooded area includes a well-balanced mixture of tall trees, bushes, grass andwildflowers, building a three-dimensional vegetation structure.
Standing dead trees which provide a suitable habitat for woodpeckers and other wildlife
17were planted.

基準年(1980年)レベル，
Baseline (1980) level

Changes after the baseline year
基準年以降の変化

Standardized HU

Average(1990)（1990年）

Years from the baseline year

※Standardized HU: Value of biodiversity at the evaluation site

Figure 2.3: Exterior viewSource: Mori Building Co., Ltd.

Figure 2.4: Changes in the value of biodiversity
Source: adapted from JHEP material

Habitat suitability for vegetation

Habitat suitability for Great Tits

Change from black to red shows improvement of biodiversity

Baseline year (past)

50 years later (future)

Baseline year (past)

50 years later (future)

Figure 2.3: A comparison of the value of biodiversity in the baseline year and 50 years later
Source: JHEP

2.6.4 The City Biodiversity Index (CBI)(1) Overview
We chose the City Biodiversity Index (CBI) as an example of biodiversity indices about cities, anddiscussed its development process, the frame for evaluation, targets for evaluation, integration and theassessment results of actual cases. The CBI is a communication tool used for self-assessments ofpotential abilities of city ecosystems and cities' problem solving abilities which can enhancecollaboration among citizens. In addition, we explained an evaluation index for land use which included
the perspective of biodiversity to make the position of the CBI clear.

18

(2) Development of the City Biodiversity Index (CBI)The development of the CBI was started by a proposal made by the Government of Singapore at the
Urban Biodiversity & Design (URBIO) conference held in Germany in May 2008. In February 2009
the first workshop was held. In June 2009, after a review by a taskforce, a draft version of user's manualwas prepared and made public through the Internet and other media. In May 2010, At the second
URBIO conference held in Nagoya, the results of the evaluation projects conducted in 4 cities,
Singapore, Brussels, Curitiba and Nagoya were reported, and the evaluation indicators were revised.
The user's manual was also revised after these discussions. In October 2010, Aichi/Nagoya Declaration
on Local Authorities and Biodiversity which included items related to the CBI was adopted at theInternational Conference of the Network Urban Biodiversity and Design held as a side event to COP10.
(3) The frame of the CBIThe indicators of the CBI comprise three components; (1) native biodiversity in the city, (2)ecosystem services provided by native biodiversity in the city, and (3) governance and management of
native biodiversity in the city.
(1) Native biodiversity in the city: includes indicators such as the proportion of natural areas andsemi-natural areas, fragmentation and networks of natural areas, the number of native species of birds
in built-up areas and the proportion of protected areas. The following issues were raised about thiscomponent: the definition of a natural and semi-natural area, the relative importance of the number ofnative species versus the total number of species, and techniques to measure networks.
(2) Ecosystem services provided by native biodiversity in the city: includes indicators such as the
proportion of water permeable areas, carbon storage and cooling, the natural park area per 1000 people,
and the annual number of visitations to parks and/or protected areas. The following issues were raised
about this component: whether mitigation of the heat island phenomenon and urban flood control
should be included as well as carbon fixation, and whether access to the green can be added.
(3) Governance and management of native biodiversity in the city: includes indicators such as the
proportion of the budget allocated to biodiversity projects, the annual number of projects and programs,
the existence of local biodiversity strategy, the number of biodiversity-related institutions, the numberof experts, the existence of partnerships, and the annual number of educational events. There was acontroversy on whether it would be appropriate to estimate the status of governance and managementof biodiversity based on the numbers and budgets. A particular question was raised concerning how todeal with CEPA (Communication, Education and Public Awareness).
(4) About the test cases
Test evaluations were conducted in 4 cities, Singapore, Brussels, Curitiba and Nagoya, using thedraft version of the user's manual. A comparison of data collected from these cities showed that there
was a significant difference in the proportion of natural and semi-natural areas from 38% in Curitiba to
9% in Nagoya, but the number of species in the whole city area was not always proportional to it. The
number of wildlife was more strongly influenced by locational factors including the climate and terrainof the city. The number of species occurring in the built-up areas of these 4 cities was higher thanusually expected, which means that the CBI has proved that urban ecosystems have a high potential.
In conclusion, it was determined there was a high possibility that the CBI could be applied tointer-annual monitoring of city biodiversity. However, the following issues were raised: creating19

indices unique to each city is also important, how CEPA can be embedded in the CBI, and the city-levelindicators should be broken down into projects-level indicators.
(5) About other indices
The CBI is positioned as an index to evaluate city-level biodiversity. Other indices include theEnvironmental Sustainability Index (ESI), a global index, the Ecological Footprint, the Sustainable
Sites Initiative (SITES), an index being developed as project-level indicators, and Social andEnvironmental Green Evaluation System (SEGES), an index which targets company-owned green areasin Japan. In addition, widely applied green building evaluation programs such as LEED in the US,
BREEAM in the UK and CASBEE in Japan also include biodiversity-focused indicators in theirevaluation items.

Figure 2.4: The evaluation items of the SITES being developed as a biodiversity index
Source: SITES official site (http://www.sustainablesites.org/)【Reference】AICHI/NAGOYA DECLARATION ON LOCAL AUTHORITIES AND BIODIVERSITY(excerpt)
1. Cooperating with national governments
In the development of relevant tools, best practice examples, capacity building programs and innovative
financial mechanisms to implement the 2011‐2020 Strategic Plan of the CBD.
2. Developing, enhancing and implementing local biodiversity strategies and action plans
In line with national biodiversity guidelines, frameworks and National Biodiversity Strategies and Action
Plans (NBSAPs).
3. Collaborating with other initiatives
Simultaneously addressing various elements of a sustainable society, including climate change mitigation
and adaptation, water resource management, poverty alleviation, education, health etc., in the recognition thatthese elements are all closely linked.
4. Monitoring and evaluating progress on biodiversity initiatives
As an integrated part of the overall reporting system; setting benchmarks for local level biodiversity
management in line with the 2011‐2020 CBD indicator framework to be developed in the future; and using
tools such as the City Biodiversity Index; reporting on progress to national governments in line with their CBD
reporting obligations.
5.Participating in CBD activities, meetings and initiatives
in support of their national delegations to the extent as appropriate and feasible.

202.6.5 Overview of TEEB
(1) What is TEEB?
TEEB, an abbreviation of The Economics of Ecosystems and Biodiversity Report for Business, is thetitle of a report of a UNEP-led study on the economic values of ecosystems and biodiversity. The
governments of Germany, UK, Norway, Netherlands and Sweden financially supported the study tocreate the report. The D0 to D4 reports have been published targeted to the following audiences
respectively.
D0: The TEEB Synthesis Report

D1: For policymakers

D2: For local and regional policymakers

D3: For business

D4: For citizens(2) Main recommendations in TEEB D0 to D4(a) D0: The TEEB Synthesis Report
The D0 report, which describes the overview of the approach, conclusions and recommendations of
the comprehensive TEEB study, was published at COP10 on October 20, 2010. It aims to recommend
specific solutions to promote ecosystems/biodiversity conservation and encourage each stakeholder totake actions voluntarily. Its key word, "mainstreaming", indicates that they hope TEEB will play therole of a trigger for companies to start raising awareness and taking actions. The TEEB study adopted atiered approach consisting of the following 3 basic concepts.
・

Recognizing value: to recognize the values of ecosystems

・Demonstrating value: to illustrate the economic values of ecosystems to help
decision-making

・Capturing value: to introduce mechanisms that incorporate the values of ecosystems

According to this report, not all ecosystem services can be valued in monetary terms. With respect tospiritual or cultural values, for example, recognizing their values may be sufficient. In other cases,
capturing values may be needed. These points are taken into consideration in conducting the study.
(b) D1: TEEB for policymakers
D1 was published on November 13, 2009 as a report for national policymakers. The report urges
policymakers in each country to take actions on the following 4 challenges.
1.
2.

The global biodiversity crisis: challenges and opportunities for policy makers
Measuring what we manage: information tools for decision-makers

3.

Available solutions: instruments for better stewardship of natural capital

4. The road ahead: responding to the value of nature(c) D2: TEEB for local and regional policymakers
D2 was published on September 9, 2010 as a report for local and regional policymakers. It
recommends a stepwise approach to help local policymakers (city, town and village administrations)evaluate the benefits of nature (value estimation), which comprise the following 6 steps.
Step 1: Specify and agree the policy issue with stakeholders
Step 2: Identify which ecosystem services are most relevant
Step 3: Define the information needs and select appropriate methods
Step 4: Assess ecosystem services
Step 5: Identify and appraise policy options
Step 6: Assess distributional impacts of policy options
This approach has been actively adopted at the local level in each country to implement some of the21

actions proposed in D2. Several progressive cities including Chiba, Ishikawa and Quebec plan todevelop strategies on biodiversity from 2011 to 2020. In Japan, the Basic Act on Biodiversity enacted
in 2008 provides that local governments must develop regional plans with regard to biodiversity. In
response to this, Chiba, Saitama, Hyogo, Ishikawa, Aichi and other prefectures are already working ona prefecture-level biodiversity strategy.
(d) D3: TEEB for business
D3 was published on July 13, 2010 as a report for business. It consists of the Executive Summary
and Chapters 1 through 7. Markets for biodiversity and ecosystem services are quantified (estimated) inthe D3 report. With certain services, the market scale for certified agricultural products estimated at 40
billion US dollars in 2008 is projected to grow up to 900 billion US dollars in 2050.
It is important to understand the true meaning of TEEB’s trial on economic valuations of ecosystems.
TEEB argues that the integration of biodiversity and ecosystem services (BES) into business can create
significant added value for companies. Specifically, it suggests that the following benefits can beprovided.
・Ensuring the sustainability of supply chains・

Penetrating new markets and attracting new customers

・・Reducing input costs through improved efficiency
Developing and marketing low impact technologies

・Promoting projects to reduce ecological footprint

・ Risk assessment, environmental management and adaptation(e) D4: TEEB for citizens
As part of D4, a project called TEEB4me is carried out in collaboration with the Bank of Natural
Capital which distributes TEEB's messages to consumers and citizens in an easy-to-understand,attractive and imaginative way. Instead of using printed reports, they invite young people to submit
videos (i.e., short films) that are related to TEEB and distribute excellent works on their website(http://bankofnaturalcapital.com/), and also on YouTube.
(3) TEEB's road ahead
After the final report at COP10 held in Nagoya in October 2010, it is expected that TEEB's
recommendations will be implemented and other actions will be taken.
(a) Establishment of IPBESIntergovernmental Science and Policy Platform on Biodiversity and Ecosystem Services (IPBES)
was established based on the UN Millennium Assessment of Biodiversity as an intergovernmental
science policy platform about biodiversity and ecosystem services. There is a high expectation thatscientific findings about biodiversity will be accumulated, making it possible to make politicaldecisions by integrating economic values and scientific values.
(b) Embedding TEEB to national accounting
The World Bank announced at COP10 that they would start a study to establish a method which eachcountry can use to reflect ecosystem and biodiversity properties to national accounting within the next 5
years. The World Bank will develop a method during these 5 years, planning to give a mid-term reportat Rio+20 in 2012. In addition, a universal guideline will be prepared using the results of the test
projects.

22

3.

Checklist to Take Biodiversity into Account in Business Activities

3.1.

Purpose of the Checklist

Companies need to pursue biodiversity conservation efforts voluntarily and actively to minimize risks
arising from their business activities and use business opportunities it presents to strengthen theircompetitiveness. The PDCA cycle, which companies can use to understand and improve on their
weaknesses, plays a vital role in advancing biodiversity conservation efforts.
This study group has developed a checklist which helps companies to pursue constant efforts toconserve biodiversity. We have identified factors in business activities to consider with respect tobiodiversity in this checklist. By conducting an objective self-assessment on each question and repeating
the PDCA cycle, companies can understand their impact on biodiversity and improve their efforts forbiodiversity conservation.
3.2.

Overview of the Checklist

Companies must pay attention to the fact that the relationships between their business activities andbiodiversity can cover a variety of areas including manufacturing, procurement processes, land use by
their facilities, and use and disposal of goods by their customers. Therefore a checklist that covers thewhole lifecycle of goods and/or services is needed.
The product lifecycle in this checklist comprises 6 stages: design, procurement, manufacturing,transportation, use and operation, disposal and reuse. In addition, 3 business activities, land use, nature
conservation and business opportunities, which do not comprise the lifecycle but have a strong influenceon biodiversity, have been added. These 9 stages in total are subject to an assessment on a 5-point scale(Figure 3.1).

Checklist to take biodiversity into
account in business activities
Lifecycle of goods
and services

Non-lifecycle
stagesDesignLand Use

Procurement
Nature Protection
Manufacturing
Business
Opportunities

Transportation
Use & Operation
Disposal & Reuse

Figure 3.1: Framework of the checklist
The scope of evaluation includes products, services, businesses and companies, which must be
specified by the evaluator. Although this checklist covers items that generally need to be considered inbusiness activities, the items to be evaluated vary with each industry. Each evaluator can change theitems in accordance with the circumstances of his/her company.
23

The following is an explanation of each question in the checklist, the purpose to evaluate the item andthe impacts the item has on biodiversity. The superscript*) represents the reference number listed at theend of the document.
In the Rating column, those described as "relevant" are the items on which the company has decided
that they should take voluntary action.
3.3.

Design(1) Definition
The design process is essentially an activity which should take into account all process of the entire
lifecycle, while being conducted respectively in each stage of a lifecycle. In other words, it is difficult to
set boundaries for the design process in a lifecycle.
Therefore we have limited the scope of "design" in this checklist to "a process to decide thespecifications of products and/or works". As a result, the design process delivers design drawings andspecifications (collectively deliverables) which show the specifications of products and/or works. This
activity comprises a stage preceding a stage in which products are created or works are started.
Companies can check in this stage of the checklist whether biodiversity or ecosystems are taken into
account in the deliverables produced by the design process.
We have also included the research and development process which is tightly connected with the design
process in this stage of evaluation.
(2) Relationships with and impacts on biodiversity
The level of influence the design stage has on biodiversity is evaluated based on the following 4 points.
(No.1) Do you have an evaluation system in place to assure objectively that biodiversity has been taken
into account in design drawings and specifications?
An evaluation by a third party other than the designer is required to assure the quality of thedeliverables (i.e., whether biodiversity and ecosystems are taken into account in the deliverables). An
adequate quality assurance should be made possible by building a system with which a third-party withexpert knowledge about biodiversity can evaluate the deliverables. The status of the implementation ofsuch a system is evaluated here, using examples such as internal and external audits including those inISO1).
(No.2) Do you include biodiversity assessments in design drawings and specifications using an objective,
scientific or quantitative method※?
※ A quantitative assessment method based on JHEP, CASBEE, SEGES, LIME or other assessment
tools
Whether biodiversity and ecosystems are taken into account in the deliverables should be evaluatedusing an objective, scientific or quantitative method. Each company must decide which method is mostappropriate for them because the evaluation method varies with each industry.
These methods should be widely recognized in society, objective, and equivalent to JHEP2), CASBEE3),
SEGES4) and LIME5). If the designer prefers a quantitative evaluation method other than those listed
above, it can be included in the quantitative evaluation methods specified here on condition that its
objectivity has been proved.
24

(No.3) Do you take biodiversity into account in all product lifecycle stages in design drawings andspecifications?
As defined in the definition section, "design" needs to be considered in every stage of a lifecycle. The
main purpose of this question is to check whether the designer has fully reviewed the points to consider
for conserving biodiversity that can be assumed when the deliverables are produced, and reflect thesepoints in the deliverables.
(No.4) Do you take biodiversity into account in research and development projects※?
※ Development of materials and technologies which have less impact on ecosystems (e.g., materials
which are easier to recycle or reuse, biofuel plants using non-edible biomass, etc.)
It is important to introduce research and development results on biodiversity along with findings about
related products or works into the design. This question is asked because enhancement of research anddevelopment departments and collaboration among them often result in biodiversity-consciousdeliverables.
3.4. Procurement(1) Definition
Here, consideration to biodiversity is evaluated with regard to the stage when a company procures
raw materials and parts (or equipment as components of services) to produce goods (or provide services).
Procured items include raw materials, parts, semi-finished products, finished products, tools, utilities,
plants and animals for greening, and materials for temporary constructions. The entire lifecycle of eachprocured item is subject to evaluation for its impact on biodiversity. Specifically, the impact on
biodiversity in the mining stage should be included for raw materials; the impact in the mining stage andprocessing stage should be included for parts; the impact in the assembly stage and logistic stage should
be included for semi-finished and finished products.
(2) Relationships with and impacts on biodiversity
The level of influence the procurement stage has on biodiversity is evaluated based on the following
4 points.
(No.5) Do you comply with laws and regulations (*) concerning biological resources and other materials
you purchase?
Companies are required to assure compliance to international laws such as the Ramsar Convention and/or
the national laws of each source country in the mining or collecting stage of the materials they procure.
Being aware of this requirement, they should develop a mechanism and system to manage and constantly
monitor compliance. The laws to be complied with include Japanese domestic laws including Invasive
Alien Species Act, Wildlife Protection and Hunting Act and Cartagena Act, international conventions
including CITES and Ramsar Convention, and laws in other countries concerning protection of rare andendangered species and genetically modified organisms.
(No.6) Do you gather and understand information concerning suppliers' impact on biodiversity (e.g., thecountry of origin of raw materials, certification status, etc.)?
25

Companies need to ask suppliers in the procurement stage to report how much impact the procured items
had on biodiversity to understand the level of impact the purchase has on biodiversity. They need to build
a mechanism to do so between them and suppliers.
(No.7) (No.8) Do you procure parts/components made from materials with less impact on biodiversity?
Companies need to procure materials with less impact on biodiversity in the procurement stage.
If certain items can be purchased from more than one supplier, companies should set criteria to selectsuppliers with less impact on biodiversity and strictly follow the criteria.
If certain items can be purchased from only one supplier, companies are required to give guidance to the
supplier to reduce their impact on biodiversity.
(No.9) When you procure biological and other resources, do you make proper arrangements about
distribution of the benefits gained therefrom with the source country based on ABS ? ※ABS:
Access and Benefit Sharing (fair and equal sharing of the benefits arising from the use of biologicaldiversity)
When companies procure biological resources, they are required to share the benefits generated by certain
characteristics of the resources fairly with the source country. Therefore, when companies procure
biological resources, it is necessary to make the entire company aware of the fact that they must makeproper arrangements with source countries, and manage their implementation.
3.5.

Manufacturing(1) Definition
Manufacturing is a process in which raw materials and other procured materials are used to produce
goods.
All companies in the manufacturing industry are supposed to have the manufacturing process. However,considering a fact that an increasing number of companies outsource the manufacturing process to othercompanies, we have limited the scope of "manufacturing" in this checklist to the manufacturing process
performed in the factories of each company and its group companies (i.e., within the range the company is
responsible for environmental governance). Outsourced manufacturing activities are not evaluated using
this checklist.
This checklist is used to check whether goods are produced in a process which gives consideration toconservation of biodiversity and ecosystems.
(2) Relationships with and impacts on biodiversity
The level of influence the manufacturing stage has on biodiversity is evaluated based on the following 7
points.
(No.10) Do you comply with regulations (under environmental laws) that aim to minimize impact on theenvironment around factories, trying to conduct business activities in a manner which mitigates
effects on the surrounding areas?
Companies are required to operate manufacturing processes in compliance with various environmental
laws. Keeping these processes compliant to environmental laws to conserve the environment is a measure
which not only leads to biodiversity conservation but also contributes to sustainable and stable operations
26

of factories.
(No.11) Do you try to reduce risks (use, discharge and harms) associated with chemical substances usedin your business activities?
Discharging chemical substances used in manufacturing processes into the air or water may affect theorganisms inhabiting the area. Therefore companies need to take steps to conserve the biodiversity aroundtheir business facilities by reducing the quantity of chemical substances used in manufacturing processes
and/or replacing them with other chemicals that have lower risks to biodiversity.
(No.12) Do you introduce and use renewable energy sources (*)?
* Solar, wind, hydro, geothermal, solar-thermal and biomass energies
Energy is indispensable in manufacturing. Replacing fossil fuel energy sources with renewable energy
sources which do not include carbon is a measure which greatly contributes to the reduction of greenhousegas emission.
It may be difficult to replace them completely because the current cost of introducing renewable energy
sources is relatively high. However, companies are required to consider doing it as part of their social
responsibility to prevent global warming.
(No.13) Do you control and reduce water use?
Conservation of water resources is said to be the very basic of biodiversity conservation. Companies
may affect the ecosystems around their factories by taking a great quantity of water used in manufacturing
processes from the surrounding areas.
Moreover, because of a global concern about the depletion of water resources, making factories lessdependent on their water intake from the surrounding areas contributes to a more stable operation of thefactories. Therefore controlling the quantity of water used in manufacturing processes is an importantmeasure in terms of biodiversity conservation.
(No.14) Do you try to reduce greenhouse gas emission produced in manufacturing processes?(In terms ofemission per unit of output)
The manufacturing stage may cause global warming, which affects biodiversity, through the emissionof greenhouse gases generated by energy consumption and/or consumption of specialty gases.
For this reason, it is important to reduce greenhouse gas emissions in the manufacturing stage by
promoting energy saving measures in factories and other facilities. Each company needs to makecontinued efforts to reduce greenhouse gas emissions.
(No.15) Taking into consideration environmental standards and information about the area into whichwaste water is discharged*, do you try to reduce the effect of waste water on the area surrounding
your business facilities by setting the quantity and temperature of discharged water at a levelappropriate for the surrounding ecosystem?
* Information about the rivers, seas and other areas into which water is discharged, the environmental
standard applied to the area, and the conservation status of the ecosystem.
The waste water produced in manufacturing processes is discharged after being treated through anappropriate water purification process. Even the purified water may have a great impact by disrupting the27balance of the aquatic environment around business facilities when the quantity and temperature of thewaste water are detrimental to the aquatic environment.
For this reason, companies need to make efforts to reduce the effects of waste water discharged fromtheir factories based on a thorough understanding of the aquatic environment (environmental information)around their business facilities.
(No.16) Do you promote reduction/reuse/recycling of emissions (wastes) produced in manufacturing
processes?
Many of the components and sub-materials procured for manufacturing directly or indirectly depend on
the benefits of ecosystems (i.e., biological resources). Therefore reducing emissions and wastes produced
in manufacturing processes contributes to a reduction in excessive consumption of biological resources
and biodiversity conservation.
In addition, reuse and recycling of emissions and wastes produced in manufacturing processes by
converting them into resources with other uses lead to the promotion of effective use of biologicalresources, which in turn contributes to biodiversity conservation.
3.6. Transportation(1) Definition
Each company conducts an evaluation on transportation of goods in the transportation stage only
when the company is the consigner (i.e., the actor who bears the shipping charge). Transportation when
the company is not the consigner (i.e., the supplier is the consigner) shall be included in the evaluation of
the procurement stage. For example, transportation of parts between departments within the company andshipping to customers are included in the type of transportation evaluated in this stage.
(2) Relationships with and impacts on biodiversity
The level of influence the transportation stage has on biodiversity is evaluated based on the following
3 points.
(No.17) Do you try to reduce environmental burden created by transportation?
Possible measures include change of transportation routes, joint transportation, improved load
efficiency, balanced shipping, modal shift, use of low-pollution vehicles, etc.
Trucks and airplanes frequently used in transporting parts and products are known to emit a larger
quantity of CO2, NOx and SOx than other modes of transportation. In addition, these transportations
generally involve long-distance movements compared to other transfers such as those within a factory. As
a result, a large quantity of CO2, NOx and SOx is emitted during transportation. It has been shown that
CO2, NOx and SOx, once emitted to the air, may cause global warming, which in turn may have effects on
biodiversity. Companies should use modes of transportation which emit less CO2, NOx and SOx as muchas possible to minimize the impact.
(No.18) Do you take precautionary measures in packaging and transportation to prevent invasion of any of
the specified foreign organisms defined by the government and other invasive alien species, andunintentional removal of indigenous species?
Species accidentally attached to the parts and goods to be transported may be unintentionally transported
28

in the transportation process. These unintentionally transported species may disrupt the ecosystems of thedestination as alien species. Companies need to establish and implement transportation and packaging
rules which help prevent the invasion or removal of species to avoid this problem. In addition, in
consideration of a possibility that species become attached in the transportation process, companies should
confirm that a scheme has been established to prevent invasion of alien species and removal of indigenous
species in the transportation process.
(No.19) Are you reducing packaging material use?
Packaging materials are used for transportation to prevent damages to parts and goods and make themeasier to handle. These packaging materials, especially wood and paper, are frequently discarded after use.
However, a lot of resources have been used to produce those packaging materials. Discarding packaging
materials may affect biodiversity in various ways such as an impact of resource mining on species andCO2 emission associated with disposal. Therefore companies should reduce the quantity of packaging
materials used for transportation by measuring the amount used and reusing those that can be reused.
3.7.

Use and Operation(1) Definition
We have defined "use and operation"[Globalenvironment]［地球環境］

as "use and operation of goods and/or
services, and their administration andmanagement including maintenance suchas regular inspections". In this stage,
goods and services, the output ofcompanies' production activities, provide
values to society through consumption,

Ecosystemfunctions
生態系機能[Society]［社会］
Ecosystem
services
生態系ｻｰﾋﾞｽ[Economy]［経済］
Production
生産活動
Design/Procurement/
Manufacturing/TransportationGoods
and services Consumption
製品・サービス
消費活動

Useand operation
設計・調達・ Compensation
対価
使用･
･運用
使用
製造・輸送
•Selectionof goods and/or
services
・
製品・の選択
製品・サービスのサービス•Changesin lifestyle の転換
・
ライフスタイルのライフスタイル

Acceptable
許容可能な
environmental
環境負荷
burdenwhile
theyburdentheglobalenvironment at the same time (Figure3.2). The difference between this stage
and the previous stages in lifecycle fromthe design stage to the transportation

Figure 3.2: the position of the use and operation stage 6）11)

stage is the lineup of players who bring the burden to the environment. In this stage, the general public asconsumers is also a player in addition to companies as the producers of the goods and services.
Thus this stage is the source of a challenge; everybody in society is contributing to the problem, whichmakes global environmental problems more difficult to solve. Therefore companies are expected tocollaborate with various players including consumers to change their lifestyle so that they will select andbuy goods and services that are beneficial to the global environment including biodiversity7） .
(2) Relationships with and impacts on biodiversity
In the use and operation stage, consumer behavior in selecting goods and services is the key in terms ofhuman relationships with biodiversity. This selection behavior influences biodiversity in the previous
production stages (i.e., procurement, manufacturing and transportation stages) as well, because production
is ultimately determined by consumer selection. The impacts arising in this stage include climate change
caused by energy consumption, emissions of chemical substances and water use, environmental pollution,
29

and habitat loss 8).
Looking at biodiversity in this stage from business management point of view, on one hand it is a risk
factor companies need to deal with to prevent social problems caused by the consumption of goods andservices. On the other hand, it provides business opportunities in that companies can distinguishthemselves in competition by promoting their biodiversity-conscious goods and services to consumers.
Taking these characteristics of this stage into account, we selected checklist questions to evaluate
biodiversity conservation from business management point of view. The questions were selected based on
the following points that we thought should be evaluated.
【Points we considered in selecting checklist questions】
1. To understand the actual impacts that business activities have on biodiversity and give feedback to
the impact mitigation activities by companies and society.
2. To be accountable for the impacts of business activities to build and maintain reliability.
3. To contribute to a lifestyle change that creates preference for biodiversity-conscious goods andservices.
4. To improve company brands and acquire new customers through company's efforts to enhancebiodiversity.
The level of influence the use and operation stage has on biodiversity is evaluated based on the following
4 points.
(No．20) Do you identify, and then monitor and evaluate, factors(*) that have effects on biodiversity whengoods and/or services are used or operated?
*Factors to monitor and evaluate include activities which promote goods and/or services and lifestylechanges that enhance biodiversity.
The purpose of monitoring and evaluation in this stage is to show the actual impact and environmental
performance of goods and/or services, and the background and factors of selection. The results provide
basic data that companies can use to address environment management in both aspects of risks andopportunities by avoiding risks arising from highly uncertain biodiversity issues, improving goods andservices and raising awareness among consumers.
(No．21) Do you take steps such as reduction of environmental burden to mitigate adverse effects on
biodiversity caused by the use and/or operation of goods and/or services?
There are many biodiversity-related phenomena that have not been explained scientifically. Therefore
companies need to adopt the adaptive management methodology and try to mitigate effects bycontinuously monitoring the status of use and operation of goods and/or services, conducting scientificand quantitative evaluation on the monitoring data, and reflecting the result on goods and/or services.
(No．22) Do you disclose information about goods and/or services in terms of their impact on and yourconsiderations to biodiversity?
It is said that "the primary function of information disclosure by companies is to remove distrust and/or
create trust toward companies and management and to support monitoring functions" 9） . Companies needto disclose information about the results of monitoring and assessments of the impacts on biodiversity
arising when goods and/or services are used and operated (No. 20) and activities to mitigate effects basedon the results (No. 21) to build and maintain company brands and relationships of mutual trust with30

various stakeholders.
(No．23) Do you collaborate with citizens, NPOs, universities, administrations and/or other entities withrespect to use, operation and management of goods and/or services?
Companies are expected not only to provide biodiversity-conscious goods and/or services but also tocontribute to a change in lifestyle and society so that people will select and buy them. However, acompany cannot solely make a difference, which makes it important for companies to collaborate withdifferent stakeholders. One such example undertaken by a construction company is the Collaborative
Biotope Project in which a university and people in the neighborhood collaborate in using and managing
the biotope 10). This project, which is part of a greenery management program in a university campus,
contributes to environmental education of the children in the neighborhood and development of humanresources with a high environmental awareness.
3.8. Disposal and Reuse(1) Definition
Disposal is a stage where used goods are disposed of as wastes. In Japan, waste is classified, based on
the type of places where they were used, as either general waste (i.e., wastes from homes) or industrial
and construction waste produced in business activities. "Reuse" comprises reduce, reuse and recycle
conducted to reduce environmental load, which is broadly defined as a process to treat the used goods
described above.
(2) Relationships with and impacts on biodiversity
Direct conservation activities such as forest conservation, coral reef protection or wetland protection
projects are generally recognized as ecosystem conservation activities. We should understand, however,that an efficient management of waste produced by business activities can also contribute indirectly toecosystem conservation. Resources can be saved through the supply chain by reducing waste and reusing
or recycling waste once it is produced, which leads to a reduction in the quantity of minerals produced,
resulting in a contribution to conservation of the ecosystems around mining sites. It is important forbusinesses to adopt the 3Rs of reduce, reuse and recycle. Companies are expected to take steps in a properorder to give top priority to waste reduction, then try to reuse waste produced in their business activities,
and finally, try to recycle waste. A proper waste management like this leads to conservation of natural
resources, and hence contributes to biodiversity conservation.
This idea is recognized internationally. For example, "TEEB - The Economics of Ecosystems andBiodiversity Report for Business - Executive Summary 2010" states, "Direct drivers of biodiversity loss
include…pollution, over-exploitation"12).
【Points we considered in selecting assessment questions】
We have decided to check if companies adopt the 3Rs because they need to know that, if they are to
reduce the burden on ecosystems at the stage after goods have been used, they must understand a fact thatthe quantity of minerals mined can be minimized by utilizing waste as resources. In addition, we want toconfirm that companies provide necessary information for end users to dispose of used products properly.
The level of influence the waste and reuse stage has on biodiversity is evaluated based on the following 3
points.
31

(No．24) Do you try to reduce, reuse and recycle (3R's) used products?
Facilitating the building of a recycling-oriented society and reducing burdens on ecosystem requires
promotion of the 3Rs not only during the production stage but also in the products offered to society.
Although the method and level to do that depend on the industry and products of each company, it ispreferable that each company promotes the 3Rs across their entire value chain by studying a possibility ofdeveloping a plan in accordance with their situation.
(No．25) Do you provide documentation about how to dispose of used products?
Reducing waste requires its reuse or recycling as resources by properly treating sold goods when they are
discarded. Even if it is ultimately disposed of as waste, it needs to be disposed of in the least polluting
way. The purpose of this question is to attract owners' attention to this matter or encourage them todispose of the products in a proper way by providing documentation which provides an explanation about
disposal methods.
(No．26) Do you give your stakeholders explanations about disposal and recovery of products?
To be able to explain about the disposal and recovery of products, it would be necessary to fully grasp
the situations. Therefore, explaining your efforts to stakeholders helps raise the levels of control andtransparency. In addition, it will also help stakeholders better understand the importance of disposal andrecovery of products.
3.9.

Land Use(1) Definition
Some of the activities companies should engage in with regard to biodiversity including those formaintenance, conservation, restoration and creation of ecosystems are strongly connected with land use
by companies. Here we have defined "land" as "the land which the organization uses and manages forbusiness operations, material procurement and customer use, which includes the surrounding land,
space and buildings". In this stage, companies evaluate the extent to which they give consideration tobiodiversity in their land use.
When a company evaluates their biodiversity efforts, the land used for business activities are broadlyclassified into 2 categories based on how the land is used. One category includes the premises of offices,
factories, warehouses and other facilities which they use for management, manufacturing, logistics andother business activities. The other category includes forests and farm land used for the production of
raw materials procured for manufacturing, and the land used by customers such as sites of construction
work contracted to the company. The former is used and managed by the company itself, and the latteris the land needed to procure raw materials or used by customers. Some lands used in certain industries
such as forests owned by paper manufacturing companies belong to both categories.
The surrounding lands should be evaluated as well because not only the land used by the company
but also the neighboring lands and a broader ecosystem are relevant in terms of biodiversity
conservation. Consideration for biodiversity in the use and utilization of space and buildings should
also be evaluated because in addition to land, walls and rooftops of buildings, and other spaces can also
be used for purposes such as planting.

32

(2) Relationships with and impacts on biodiversity
The level of influence the land use stage has on biodiversity is evaluated based on the following 8
points.
(No.27) Do you use any third-party evaluation systems and/or certification systems with respect tobiodiversity and/or ecosystem conservation?
Companies are expected to review the contents and results of their efforts objectively although there are
not many widely accepted methodologies to conduct qualitative or quantitative evaluations on biodiversity
and ecosystem conservation in a rational and transparent way. Alternatively, companies should be
evaluated or approved by a third party such as HEP/JHEP or SEGES before making them public.
(No.28) Do you conduct biodiversity impact assessments on land use?
Use of land or alterations to the shape and quality of land zoning through development, construction
and planting may affect biodiversity. Companies should assess these effects in advance and respond tothem in accordance with the level of the effects. Three questions from No.28 to No.30 can be put
together as an approach to assessment, monitoring and action.
(No.29) Do you monitor land use to understand the status of biodiversity?
Companies are expected to monitor regularly what impacts their continuous land use has on
biodiversity. Monitoring makes it possible to verify the effects of their approach by comparing themwith the prior assessment results and to replace it with a more effective approach.
(No.30) If your land use is likely to affect biodiversity do you take steps to avoid possible impacts?
Companies need to take measures to avoid or reduce negative impacts when prior assessment results
indicate possible negative impacts on biodiversity arising from their land use, or the results of asubsequent monitoring reveal negative impacts on biodiversity arising from their land use.
(No.31) Do you conduct biodiversity conservation projects including activities to protect endangered
species, rare species and/or indigenous species?
Companies are expected to give consideration to protection of endangered species, rare species andindigenous species in their planning and implementation of land use to maintain and conserve theecosystems in the land and its surrounding area. Each company is responsible for the use of theirpremises to conserve broader ecosystems. Here reforestation and other activities conducted throughvolunteer efforts are not evaluated. Only those activities conducted in the limited scope of land as
defined above, including the land owned by the company, are evaluated.
(No.32) Do you request suppliers to consider biodiversity in their land use?
Conserving biodiversity requires that suppliers who provide raw materials, goods and/or services
give consideration to biodiversity in the process of providing them. Companies need to encourage
suppliers to give consideration to biodiversity and request biodiversity-conscious land use. Whensuppliers undertake land development, construction or planting projects, it is important to request, at thedesign and construction stages, that they use designs and methods beneficial to ecosystem conservationsuch as those which use indigenous species and conserve habitats. The same consideration should be33requested at the management stage.
(No.33) Do you estimate economic values of biodiversity and ecosystem services?
One of the factors that keep biodiversity initiatives from progressing more rapidly is a fact that its
economic values have not been integrated into decision-making. Although presently a rational andwidely accepted method to calculate its economic values has not been established, the contingent
valuation method (CVM) and conjoint analysis have been applied to some cases. Companies are
expected to evaluate, compare and review biodiversity conservation or ecosystem services in economic
terms to use the results in decision-making.
(No.34)Do you prevent invasion of any of the specified foreign organisms defined by the government andother invasive alien species?
Invasion of an alien species can disrupt the ecosystem of the invaded area. Once an alien species has
invaded, its removal takes significant time and it is economically inefficient. Therefore taking a proactive
measure to prevent invasion of alien species is more effective to conserve biodiversity. Companies should
pay a special attention not just to the specified foreign organisms13) of which rearing, cultivation,transportation, release and planting are prohibited by the Invasive Alien Species Act, but also to the alien
species listed in the invasive alien species list specified by the Ministry of Environment13), "100 of theWorld's Worst Invasive Alien Species"14) specified by the Species Survival Commission (SSC) of theInternational Union for Conservation of Nature (IUCN) and "100 of Japan's Worst Invasive Alien
Species"15) specified by the Ecological Society of Japan. Companies are expected to prevent suchinvasions by developing plans and implementing them so that alien species will not be brought in the landdevelopment, construction, planting and management processes. There is also a possibility that domestic
alien species brought by humans from other regions in the country affects the ecosystems and biodiversityof the region. Even if the species occurs in the region, its gene may be disrupted by the entry ofgenetically different individuals occurring in other regions. Companies are expected to prevent invasion oforganisms from other regions and use local seeds and seedlings16) for greening.
3.10. Nature Conservation(1) Definition
Companies evaluate their guidelines and policies with respect to biodiversity conservation, distributionof information, environmental education and actual nature conservation activities.
Guidelines and policies about biodiversity conservation are important in that they show companies'
stances on biodiversity conservation and give guidance to their biodiversity conservation activities.
Companies can clarify their responsibilities in conserving biodiversity by articulating their guidelines andpolicies and announcing them within and outside their companies.
Companies distribute information about biodiversity conservation by disclosing information about theirstances on biodiversity conservation and the state of their conservation activities in reports including
environmental reports and CSR reports, and their websites. Disclosing information may have an influenceon society in promoting biodiversity conservation, allow their biodiversity conservation efforts to beevaluated objectively by the outside world, or lead to more advanced biodiversity conservation efforts.
Nature conservation initiatives evaluated here are corporate social responsibility (CSR), volunteer andother activities that are not directly related to business activities. Basically biodiversity conservation34

activities undertaken as part of business activities including alterations of land such as land development
are evaluated in the "land use" stage. However, some nature protection initiatives may be evaluated inboth stages because it is difficult to decide under which category they fall in some cases such as activities
conducted within companies' own factory premises. There are numerous possible activities companies canundertake to protect nature: biotopes, protection of endangered species and indigenous species, removal ofinvasive alien species, greening with native species and local species, planting fruiting plants which attract
butterflies and birds, bird-watching events during the Bird Week, setting nests for birds, natureobservation events, weeding to improve habitats, and other activities to help sustainable use and proper
management of greens, taking in to account the native organisms occurring in the area, and environmental
education with regard to biodiversity. Those that can be judged to be beneficial to biodiversity
conservation, whatever kinds of activities they are, are eligible for evaluation.
There are a number of possible ways for companies to cooperate with nature protection initiatives
undertaken by outside organizations such as providing human resources, funds and spaces. The type ofcooperation is not questioned as long as it is beneficial to biodiversity conservation.
Environmental education comprises two types of educational activities: those given to executives andemployees, and those conducted outside the company such as visiting lectures. Environmental educationencompasses a very large area, but here only those with contents regarding biodiversity conservation aretaken into account. However, it does not have to be the type of environmental education which
specifically targets biodiversity conservation. Although purchasing books and reference materials aboutbiodiversity and nature for libraries and other facilities contributes to environmental education, what istaken account here is not just purchasing books and reference materials but whether the company actively
engages in environmental education or supports environmental education given to the executive andemployees. Visiting lectures have a different significance from in-house environmental education in thatthey give companies opportunities to show their technologies and findings to society, they raise awarenessamong many people about biodiversity conservation, and they help develop human resources who willplay important roles to conserve biodiversity. For this reason, both types of environmental education
activities, those given to executives and employees and those conducted outside the company such as
visiting lectures are taken into account.
(2) Relationships with and impacts on biodiversity
The level of influence the nature protection stage has on biodiversity is evaluated based on thefollowing 5 points.
(No.35) Do you have guidelines and/or policies on conservation of biodiversity?
Establishing and showing guidelines and/or policies regarding company-wide stances and specificactivities with respect to biodiversity conservation, and announcing them to the outside world, turn
companies into a position where they have no choice but to implement those guidelines and/or policies.
They effectively make companies voluntarily take on a responsibility for biodiversity conservation andcommit themselves to those activities, which will promote biodiversity conservation. Moreover, they canbe seen as models of initiatives that other companies can imitate, and they have an impact to increasesocial demand of biodiversity conservation.
(No.36) Do you spread information about biodiversity conservation?
35

Distributing information regarding biodiversity conservation by disclosing information about theirconservation activities and qualitative and/or quantitative evaluations of the results in reports including
environmental reports and CSR reports, and their websites may enable companies to show a model toother companies, distribute and deploy their technologies and findings to society, and promotebiodiversity conservation. Meanwhile, it gives companies a chance to check whether their approaches are
not self-righteous.
(No.37) Do you voluntarily carry out nature conservation activities in factory premises,
company-owned woods including leased land, and surrounding areas?
Evaluations on nature protection activities are different from those direct ones conducted in businessprocesses because they target nature protection activities undertaken as CSR or volunteer activities thatare not directly associated with business activities. Extra biodiversity conservation activities in addition to
the activities conducted for biodiversity conservation in the previous stages are evaluated. This question is
not necessarily asked to check the impacts that their products and so forth have on biodiversity. Its
objective is to evaluate companies' stances on biodiversity; hence it is related to company climates orcompany cultures. It is also one of the axes of evaluation to project future impacts as it indicatesdirections of companies' approaches on biodiversity.
(No.38) Are you involved in nature conservation activities mainly through cooperation with externalorganizations such as NGOs/NPOs, community groups, local governments and research
institutions?
Each company is not solely responsible for adverse effects on biodiversity. Nonetheless, cooperation
with nature conservation programs undertaken by external organizations not only contributes directly tobiodiversity conservation but also has a significant educational influence by raising awareness in society
regarding nature protection and biodiversity conservation.
(No.39) Do you carry out internal and/or external environmental education activities on biodiversity?
Even if companies provide no environmental education, it may not have immediate and direct effects
on biodiversity. In many cases, environmental education probably does not affect at least the kind of
biodiversity that has relationships with products currently being produced. However, environmental
education provided to employees and other people is likely to have a strong influence on biodiversity
conservation in the future. In that sense, it is important because it indicates directions and policies
regarding companies' biodiversity conservation approaches in the future. Because environmental
education to external people or organization including visiting lectures may lead to distribution anddevelopment of companies' findings and technologies regarding biodiversity, which in turn may greatly
promote biodiversity conservation.
3.11. Business Opportunities(1) Definition
Companies evaluate whether their approaches related to biodiversity have been integrated into theirbusiness strategy, whether they try to communicate with society regarding their approaches, andwhether they engage in activities which contribute to ecosystem conservation and biodiversity throughactual products and/or services, business activities themselves or encouragement to other companies,
36and as a result, lead to creation of business opportunities or sales.
Companies evaluate in the other stages of this checklist whether they sell products procured andmanufactured in a biodiversity-conscious way. Here they evaluate whether their activities are
economically rational, and their activities are used in marketing.
(2) Relationships with and impacts on biodiversity
Companies can indirectly contribute to biodiversity by integrating biodiversity into business
management and marketing products and/or services associated with biodiversity, which is evaluated fromthe following 5 points.
(No.40) Do you have a governance structure and a system in place to make decisions on biodiversity?
Biodiversity conservation measures integrated into business activities may result in improvement ofbusiness values and sustainability of companies. Having such measures securely in place in business
management requires securing human and monetary resources for them. It also means that the measures
are likely to be continuous efforts instead of temporary ones.
(No.41) Do you communicate externally concerning policies and goals on biodiversity?
Disclosing policies and goals on biodiversity and their results plays an important role incommunications with external stakeholders. Communications with stakeholders help raise the level of themeasures, leading to improved company brands and investment values.
(No.42) Do you provide goods and/or services in an economically sustainable way? (i.e. are
biodiversity-conscious practices economically compatible with your business performance?)
This question is to evaluate whether companies provide goods and/or services that contribute tobiodiversity conservation in the procurement, manufacturing and use processes based on an economicallyrational way. It is important that they are not offered as "social actions" but that they make business sense.
Even if they incur a loss in the end, it does not matter as long as they are established as a business
opportunity.
(No.43) Do you develop and sell goods and/or services which indirectly contribute to biodiversity?
Companies can contribute to biodiversity conservation by providing goods and/or services whichindirectly contribute to biodiversity. The existence of such activities is evaluated here.
For example:
・ Marketing activities in which a proportion of the sale is donated to biodiversity conservation
activities
・ Financing arrangements that recognize biodiversity-conscious companies(No.44) Do you develop and sell goods and/or services that focus on biodiversity?
For example, the following businesses do not directly increase biodiversity, but contribute tobiodiversity through other companies and consumers.
・Consulting services focused on biodiversity for companies
・Tours focused on biodiversity
・Selling clean natural water produced in a biodiversity-rich land37

4.

Checklist Development Process and Test Results

4.1 Checklist Development Process
In the checklist development process, tests
were run twice by study group members andReviseRevisecontents and ease of use (Figure 4.1). The
final version, revised after Test 3 is attachedto this report.

Study Group
Members（11 companies）

Final Version

Test③
Test③

Revise

Test②
Test②

Prepare

Test①
Test①

once by COCN member companies. The
draft version was revised reflecting thecomments provided in these tests about the

Test Version

Draft version

COCN Members（23 companies）

Figure 4.1: Checklist development flow
4.2 Checklist Test Results (Test 3)
For the sake of convenience, the 23 COCN member companies which responded to our request for

running a test are classified into 5 industries as shown in Table 4.1.
Table 4.1 Industries of COCN member companies and number of responses
Industry

No. ofCategory of business

responses
Manufacturing (electrical)

9Electrical

Manufacturing5

Chemical, pharmaceutical

Manufacturing (other)5

Machinery, petroleum, transportation equipment,
textile, others

Construction

2

Construction

Services2Bank, real estate

Total

23

―

(chemical/pharmaceutical)

The scores of the test are shown in Figures 4.2 and 4.3, and Table 4.2. The average score was 3.3. Thereis room for improvement in the scores by implementing the PDCA cycle. Taking this into consideration,
we have judged our level setting is appropriate at the moment.
Looking at the scores by industry, we have found that the scores in each industry category are centeredaround 3.0. No large variations among industries have been found. The average score of the
manufacturing (electrical) industry is 3.5, which is high compared to the other industries. Table 4.2 showsthat its scores of the disposal and reuse stage and the nature protection stage are especially higher than thescores of the other industries. The other industries should be encouraged to improve their scores in thesestages, learning from the efforts in the manufacturing (electrical) industry.
Looking at the scores by stage, we have found that the scores in the manufacturing stage areparticularly high. The scores in this stage are high in the manufacturing (electrical), manufacturing(chemical/pharmaceutical) and manufacturing (other), suggesting that the manufacturing industry as awhole gives full consideration to biodiversity in the manufacturing stage. On the other hand, the scores in
the use and operation stage are low in every industry. This result suggests the current situation that
presently companies do not give much consideration to biodiversity in this stage because end users, notcompanies, are the ones who directly handle products in this stage.
38

Manufacturing(Electrical)
543Services2
1
0

DesignBusiness
opportunities

5

Procurement

4
3

Manufacturing
Nature(Chemical/
conservation
Pharma)2

Manufacturing

10Land use
Manufacturing(Other)Construction

Transportation

Disposal & reuse

Figure 4.2: Average score (by industry)Use & operation

Figure 4.3: Average score (by stage)

Table 4.2: Scores in Test 3
Manufacturing(Electrical)

Manufacturing(Chemical/
Pharma)Manufacturing(Other）

Construction

Services

Average(allstages)Design

3.2

2.2

2.5

3.5

3.0

2.9

Procurement

3.0

3.1

2.6

3.3

3.0

3.0

Manufacturing

4.4

4.5

4.5

3.6

3.5

4.3

Transportation

3.2

3.1

3.1

2.0

1.5

3.0

Use & Operation

2.8

2.3

2.0

2.9

3.0

2.6

Disposal & Reuse

4.1

2.1

3.3

2.3

3.0

3.4

Land Use

2.8

2.2

2.8

3.6

2.8

2.8

Nature Conservation

4.1

2.9

3.6

3.9

3.4

3.6

Business
Opportunities

3.8

2.5

3.3

3.3

3.7

3.4

Average (allstages)

3.5

2.9

3.2

3.3

3.1

3.3

Table 4.3 shows a summary of the results on NA ratios. An NA ratio is the proportion of "NotApplicable" responses in all questions. By industry, the service industry shows a high ratio, 28.4%. The
NA ratio in each of the procurement, manufacturing, transportation and disposal and reuse stages of theservice industry is higher than 50%. By stage, the NA ratio is high in the procurement and disposal andreuse stages. In the procurement stage, the proportion of NAs is particularly high for No.9, the question
about ABS, suggesting that resources to which ABS can be applied are not frequently used except in the
manufacturing (chemical/medical/pharmaceutical) industry. In the disposal and reuse stage, the results are
divided into 2 distinctive groups: the low-NA group comprising the manufacturing (electrical) andconstruction industries and the high-NA group comprising the rest. Even if a company belongs to the
manufacturing industry, it seems to be difficult to give consideration to biological diversity if thecompany is not a final supplier who offers products to end users, but a supplier who provides raw
materials.
As shown above, the evaluation items in this checklist increase or decrease depending on the industry
and products. Because the purpose of using this checklist is to allow self-improvement by continuously
rotating the PDCA cycle, we expect each evaluator will make appropriate changes to the contents of thischecklist in accordance with their specific conditions.

39

Table 4.3: Proportion of NA (%) in Test 3
Manufacturing(Electrical)

Manufacturing(Chemical/Pharma)

Manufacturing(Other)Construction

Services

Average(All stages)

Design

0.0

10.0

20.0

0.0

0.0

6.5

Procurement

26.7

4.0

28.0

20.0

80.0

26.1

Manufacturing

0.0

0.0

0.0

7.1

57.1

5.6

Transportation

3.7

13.3

0.0

0.0

66.7

10.1

Use & Operation

0.0

40.0

20.0

0.0

0.0

13.0

Disposal & Reuse

3.7

53.3

40.0

0.0

66.7

27.5

Land Use

0.0

5.1

0.0

0.0

0.0

1.1

Nature Conservation
Business
Opportunities

0.0

0.0

0.0

0.0

10.0

0.9

4.4

16.0

20.0

10.0

0.0

10.4

Average (all stages)

4.1

12.3

11.8

4.5

28.4

9.7

40

5.

Recommendations, Necessary Role-Sharing among Industry, Government andAcademy, and Possible Impacts Created by Implementing the Recommendations
・In 2010, the first year of this 2-year project, we identified factors that are already being addressed bysome companies in their value chains as well as factors that need to be addressed for the conservationof biodiversity. In 2011 we developed a biodiversity checklist that can be used by all industries basedon the factors identified in 2010. The Nagoya Chamber of Commerce & Industry created a guidebook
for their member companies, "Business and Biodiversity - how to understand their relationships andtake steps based on the Aichi Targets and Nagoya Protocol", in which they show the content of thischecklist.
In addition, we are collaborating with the ISO Working Group on Biodiversity Standards ofInternational Standard Innovation Technology Research Association (IS-INOTEK), which wasestablished in January 2011, to make a proposal for international standards. The ISO Working Groupon Biodiversity Standards has set a goal that Japan will propose international standards on biodiversity,
toward which they have continued discussion since October, 2011. We have requested the working
group to use our Business and Biodiversity Checklist as one of the KPIs used in the discussion. We are
currently working to see that the checklist will be adopted in the proposal.
We also plan to promote this checklist so that it will be used in projects planned by the World
Business Council for Sustainable Development (WBCSD) as a business performance evaluation tool
developed by Japanese companies.
We would like to request support from the Technical Regulations, Standards and Conformity
Assessment Policy Division, Industrial Science and Technology Policy and Environment Bureau,
Ministry of Economy, Trade and Industry to the activities of this working group to propose
international standards.

41

List of abbreviations

ABS：Access and Benefit Sharing

BBOP：Business and Biodiversity Offsets Programme

CASBEE ：Comprehensive Assessment System for Built Environment Efficiency
CBD：Convention on Biological Diversity

CBI：City Biodiversity Index

CEV：Corporate Ecosystem Valuation

COP：Conference of the Parties

CVM：Contingent Valuation Method

ESR：Ecosystem Services Review

IFC
ISO

：International Finance Corporation: International Organization for Standardization

JHEP：Japan Habitat Evaluation and Certification Program

LIME
MA

：Life-cycle Impact assessment Method based on Endpoint modeling：Millennium Eco-system Assessment

SEGES ：Social and Environmental Green Evaluation System
TEEB
UNEP

：The Economics of Ecosystems and Biodiversity Report for Business：United Nations Environment Programme

WBCSD ：World Business Council for Sustainable Development
3Rs：Reduce, Reuse and Recycle

42References

1) http://www.jisc.go.jp/international/isoiec.html
2) http://www.ecosys.or.jp/eco-japan/activity/JHEP/index.html
3) http://www.ibec.or.jp/CASBEE/4) http://seges.jp/
5) http://www.aist-riss.jp/old/lca/ci/activity/project/lime/index.html
6) Ricoh. Environmental Management Report, 2010, p.14 "Three Ps BalanceTM".
7) Nature Conservation Bureau, Ministry of the Environment. Guidelines for Private Sector Engagementin Biodiversity, 2009.
8) Japan Business Initiative for Biodiversity. Map of Relationships between Business and Biodiversity,
http://www.jbib.org/
9) Sustainable Management Forum of Japan. Sustainable Management 6-1 "Biodiversity and Business
Management", 2006, p.113.
10) Ministry of Land, Infrastructure and Transport. Efforts by Companies to Conserve and Create Greens
http://www.mlit.go.jp/toshi/park/s1/cases/js0068.html
11) Junko Edahiro and Riichiro Oda. Biodiversity Made Easy to Understand for Companies,
Gijutsu-hyoron-sha, 2009, p.215
12) Bishop, Joshua, et. al. TEEB – The Economics of Ecosystems and Biodiversity Report for Business Executive Summary 2010, p.2
13) Nature Conservation Bureau, Ministry of the Environment.

The Invasive Alien Species Act website

http://www.env.go.jp/nature/intro/index.html （accessed on 2012/2/2）
14) IUCN SSC Invasive Species Specialist Group: View 100 of the World's Worst Invasive Alien Species
http://www.issg.org/worst100_species.html （accessed on 2012/2/2）
15) Compiled by Ecological Society of Japan, edited by Okimasa Murakami and Izumi Washitani. Alien
Species Handbook, 2002, p.390
16) Editid by Akira Kameyama, compiled by Tatsuaki Kobatyashi and Noboru Kuramoto. Biodiversity
and Greening Handbook－Plans and Technologies for Conservation and Creation of the Rich
Environment and Ecosystems－, 2006, p.322

43

<Appendix 1> Test results (by industry)Business
opportunities

Natureconservation

Design543210Procurement

Manufacturing

Land use

Business
opportunities

Natureconservation

Transportation

Disposal & reuse

Design543210Procurement

Manufacturing

Transportation

Land use

Use & operation

Disposal & reuse

Use & operation

Appended figure 1-1: Manufacturing

Appended figure 1-2: Manufacturing(Electric)(Chemical/Pharma)

Design5
4
3
2
1
0

Design543
2
10Business
opportunities

Natureconservation

Procurement

Manufacturing

Land use

Natureconservation

Transportation

Disposal & reuseBusiness
opportunities

Natureconservation

Business
opportunities

Land use

Use & operation

Disposal & reuse

Use & operation

Appended figure 1-4:

Manufacturing (Other)

Construction

Procurement

Manufacturing

Transportation

Land use

Disposal & reuse

Use & operation

Appended figure 1-5: Services

44

Manufacturing

Transportation

Appended figure 1-3:

Design543210Procurement

<Appendix 2> Test results (by stage)
Manufacturing(Electrical)

5
4
3
2
1
0

Services

Construction

Manufacturing(Electrical)

5
4
3
2
1
0

Manufacturing
Services(Chemical/
Pharma)Manufacturing(Other)Construction

Appended figure 2-1: Design stage

Manufacturing(Other)Appended figure 2-2: Procurement stage

Manufacturing(Electrical)
5

Manufacturing(Electrical)
5
4

4
3
2

Services

1

3

Manufacturing
Services(Chemical/
Pharma)10Manufacturing(Other)Construction

Appended figure 2-3: Manufacturing stage

Manufacturing(Other)Appended figure 2-4: Transportation stage

Manufacturing(Electrical)
5

Manufacturing(Electrical)
5

4
3
2

Services

1

4
3

Manufacturing(Chemical/
Services
Pharma)2
1

0Construction

Manufacturing(Chemical/
Pharma)20Construction

Manufacturing(Chemical/
Pharma)Manufacturing(Chemical/
Pharma)0Construction

Manufacturing(Other)Appended figure 2-5: Use & operation stage

Manufacturing(Other)Appended figure 2-6: Disposal & reuse stage

45

Manufacturing(Electrical)

Manufacturing(Electrical)
5
4
3

Manufacturing(Chemical/ Services
Pharma)2Services

10Manufacturing(Other)Construction

Construction

Manufacturing(Electrical)
5
4
3
2
1

Manufacturing(Chemical/
Pharma)0Construction

Manufacturing(Chemical/
Pharma)Manufacturing(Other)Appended figure 2-8: Nature protection stage

Appended figure 2-7: Land use stage

Services

5
4
3
2
1
0

Manufacturing(Other)Appended figure 2-9: Business opportunities stage

46