Mr. Essl, the Education and Science Journalists Club awarded you the title of Scientist of the Year 2022. The main focus was to communicate knowledge to a broad public and specifically to bring the issue of biodiversity loss to the fore.
How would you describe the problem: what are the biggest risks/dangers we face as mankind if we do not stop this downward trend?
The rapid loss of species, which is taking place worldwide much like in Austria, is basically an early warning system. In Austria, 40% of breeding birds have disappeared in the last 20 years. According to estimates by the World Biodiversity Council, one million species are globally threatened by extinction. These figures prove that we are overexploiting nature. As we know from other areas of life, overexploitation only works for so long, and at some point, the bill comes due. In this case, the bill includes the loss of pollinators, a lack of protection from floods and avalanches, crop failures and much more; as well as ugly monotonous agricultural deserts or urban sprawl. These are bleak prospects.
Can you explain the concept of biodiversity in more detail? We talk about the loss of large parts of populations but also about the loss of genetic diversity within individual species or also the degradation of ecosystems.
What problems would you classify as particularly relevant here, and where do you see the most urgent need for taking action?
Biodiversity is a somewhat unwieldy term. Basically, it encompasses the diversity of life, from genetic diversity to the diversity of species to the diversity of different habitats. Given that these different aspects of natural diversity are closely interlinked, it is difficult to single out just one. That being said, I would think that the destruction of habitats such as flower meadows, moors, and semi-natural forests is perhaps the most serious factor, because, like dominoes, this destruction ultimately also leads to the disappearance of the species found there. It is therefore very important to preserve such habitats – in Austria, but especially also in regions such as the tropics, where they are being destroyed at a particularly rapid rate. Just look at Brazil or Indonesia.
Various regulatory frameworks at EU level also include the topic of biodiversity, such as the taxonomy for sustainable investments. From an ecological point of view, is it actually possible to report on the state of biodiversity or to express this state in key figures, e.g. in order to determine responsibility at the corporate level?
Yes, this is possible, sensible, and necessary. Possible, because, while it is not easy to evaluate the state of nature with numbers, there is now enough research that makes this task possible in an approximative way. Sensible, because decisions on the financial market can have massive effects on nature and the climate – both on the positive and on the negative side. Necessary, because it is urgently necessary to combat species extinction and climate change much more seriously than before – and of course the financial market is also required for this effort.
In the past, the issue of data quality and validity with regard to biodiversity has been discussed with an increasingly critical undertone.
While greenhouse gas emissions are a widely accepted indicator for addressing the climate crisis, the question remains unanswered to date whether there can be a similarly suitable indicator for the area of biodiversity?
It is true, a single indicator is hardly sufficient to assess the state of biodiversity. But it is now possible to deliver a well-founded assessment of how the type of land use – whether construction, agriculture, or forestry – affects biodiversity. Similar models can be established for ecosystem services that are important to us humans – such as groundwater recharge, flood protection, or carbon storage. All this is basically possible. Of course, with a degree of (justifiable) uncertainty, and depending on whether the necessary basic data is available, for example from companies.
The climate crisis and the biodiversity crisis are closely linked. As for the climate crisis, the general assumption is that we have to solve it at the global level.
Is this “problem” also the case for the biodiversity crisis or can local or regional solutions also work here?
Problems can only be solved globally if we act nationally and locally. Only if many of us act will it turn into the global solution we need. It is therefore clear that Austria must also make its contribution. And on this front, far too little is happening. All we need to do is implement what we have committed to, i.e. the Paris Agreement on Climate Change and the national biodiversity strategy, which has been in place since autumn 2022. There is no way around this, and the fact that these documents have so far remained largely empty resolutions is a political failure. I am also convinced that the majority of the business community would support such a sustainable policy.
As we know, there is little time to find and implement solutions for the climate crisis. Do you think the time horizon is similar for the biodiversity crisis?
The fact that time slips between our fingers due to our inactivity is a common denominator to both crises. They are closely linked, have similar causes, and can only be solved in combination.
How does Austria fare from a biodiversity perspective: is biodiversity still greater in Austria than in other countries? What would be necessary at the political level to address the issue more vigorously?
Austria is rich in species, simply because we have our share of very different landscapes: mountains, steppes, and in the south in Carinthia and Styria, we also have species from the northern Mediterranean region that just about reach Austria. But we are careless with this natural capital that has been given to us. Politically, I think leadership is important. In my opinion, a change to a sustainable environmental and climate policy, implemented in a socially balanced way, would have broad legitimacy among the population and the electorate, and would be rewarded. Of course, there is still resistance to be overcome, and people are still shying away from this at the moment.
More information, insights and expert opinions on the topic of biodiversity can be found in our new ESGenius Letter.
For a glossary of technical terms, please visit this link: Fund Glossary | Erste Asset Management
Prognoses are no reliable indicator for future performance.