Do Multinational Corporations Care About Biodiversity?

"You have probably heard about voluntary carbon offset-if not from elsewhere, from buying plane tickets, where, after you have paid for the ticket, the tax, the seats, maybe the luggage fee, and the priority boarding, you have an option to also pay to offset your carbon footprint. Companies get to do this, too, and, unlike you, they get to brag about it."

"The question is: Does it make a difference to the investors? And here, there was an interesting change in investor behavior as a result of an article in the U.K.-based newspaper The Guardian in 2023. That piece was extremely skeptical about just how much difference such a voluntary carbon offset makes. The result of this article was not, or not primarily, an overall negative reaction to the very idea of voluntary carbon offset."

"Some of this is straightforward and predictable: Official certification of various carbon offset schemes became more important. But some others are more complex, less predictable, and have a lot to do with human psychology. The most important of this is that, according to the new study, investors are more and more interested in carbon offset schemes that increase biodiversity. Why biodiversity, one might ask? And the answer appears to be that biodiversity is a relatively simple concept. And it is also relatively easy to measure."

Multinational corporations prioritize profits while increasingly paying attention to biodiversity outcomes. Voluntary carbon offsets are commonly offered to compensate emissions for individuals and companies, but public skepticism about their effectiveness has grown. That skepticism led investors to scrutinize offset schemes more closely and to place higher value on official certification. Investors show growing preference for offsets that demonstrably increase biodiversity, because biodiversity is conceptually simple and relatively easy to measure. Cognitive preferences for simplicity shape investor responses, making biodiversity-framed environmental actions more attractive than opaque carbon-accounting approaches.

Read at Psychology Today