Major Nordic companies are underestimating the risks of biodiversity loss that threaten their operations, according to a Danske Bank report.

In December, Danske Bank revealed that it had assessed how the 99 largest companies in the region report on biodiversity and set goals to mitigate the physical and transition risks posed by biodiversity loss.

The assessment revealed that 71% of companies are exposed to significant biodiversity risk because they are dependent on biodiversity or have an impact on it. However, fewer than 15% of companies have set targets to reduce their impact on biodiversity or to restore nature.

“While Nordic companies are highly exposed to biodiversity risk, they are not setting biodiversity targets or reporting on their actions or impact,” the report states. “Nordic companies do acknowledge to some extent that they have an impact on or dependency on biodiversity, as a third of the companies report or describe activities in the field of biodiversity, but these are often very vague.”

Mads Steinmüller (Mads Steinmüller), Head of Active Ownership at Danske Bank and Danica Pension, believes that the report “makes it crystal clear” that many companies are overlooking not only the risks of biodiversity loss but also the opportunities it presents.

“Companies that use natural resources in one way or another must set goals for how to integrate biodiversity into their approach. This will not only future-proof the company, but also help reduce biodiversity risks,” he noted in a press release.

Danske Bank specifically examined the risks associated with biodiversity loss in forests and oceans.

Its assessment found that while 36% of companies operate in sectors potentially linked to deforestation, only a few of them have set targets or report on deforestation. Likewise, 65% of companies operate in sectors that can potentially impact the oceans, such as the food, mining, and oil and gas sectors, yet only seven percent of them have set a target to reduce their impact on seas and oceans or to restore them.

Nordic companies can impact the oceans in various ways, including through underwater noise that disturbs species dependent on acoustics, physical pollutants such as oil spills, agricultural runoff, and human waste.

Danske Bank investigated this issue because biodiversity-related risks affect the risk profile of companies and, consequently, of investors.

“The biodiversity crisis and the transition to an economy that preserves and restores biodiversity can affect a company’s value, business model, and growth potential,” Steinmüller stated. “We only have one Mother Nature, and for many companies, she is the most important supplier, so we all have a vital role to play in preserving biodiversity and must ensure that both companies and investors contribute to increasing biodiversity.”