Wildlife habitat destroyed by production and consumption of trainers, sofas and smartphones

• ABN AMRO recently investigated the loss of biodiversity caused by the global production of three popular consumer goods.

• The production of just one pair of trainers, one two-seater sofa and one smartphone results in an average loss of biodiversity of 2.7 m2, 173 m2 and 16.6 m2 respectively.

• Preserving biodiversity is essential to the economy and to human wellbeing: the adoption of renewable energy, the use of recycled materials and longer product life, together with reduced consumption, have the greatest combined impact.

The true price of consumer goods

The global production and consumption of trainers, sofas and smartphones has a huge impact on biodiversity, resulting in an annual loss of biodiversity over an area 28 times the size of the Veluwe region – almost two-thirds the size of the Netherlands. It is estimated that the global production of trainers destroys 324,000 hectares of wildlife habitat each year, an area 3.6 times the size of the Veluwe. The total cost of producing sofas is estimated at 298,000 ha per year (3.3 times the size of the Veluwe), with smartphones causing an even greater loss of 1,942,000 ha (21 times the size of the Veluwe). These are the conclusions of a report published today by ABN AMRO and Impact Institute. To offset the minimum estimated damage to biodiversity caused by these products, a pair of trainers would have to cost an extra € 1.50 on average, a sofa € 109 and a smartphone € 7.10 extra. This revenue would then need to be used to address the loss of biodiversity. The adoption of renewable energy in production, the use of recycled and sustainable materials, and longer product life – together with reduced consumption – will have the greatest overall positive impact.

Retailers to report on the impact of their products on biodiversity from 2025

Global biodiversity has declined by almost 70% in the last 50 years, causing irreparable damage and loss in many parts of the world. The Netherlands is no exception, and ABN AMRO believes that curbing this damage is of the utmost importance, not least for economic reasons. More than half the global economy depends on the benefits of ecosystem services, such as the pollination of crops by insects. The EU’s Corporate Sustainability Reporting Directive (CSRD) requires all large companies with a significant or material influence and a business model that is directly affected to report on biodiversity starting from 2025. This latest report identifies the factors putting the greatest pressure on biodiversity. By quantifying these individual factors – climate change, air and water pollution, and water and land use – we will gain a better understanding of the extent to which retail products contribute to biodiversity loss and how to mitigate the damage.

The truth is in the numbers: actionable options for retailers

Measuring impacts on biodiversity is a complex process requiring new skills and collaboration across the supply chain, as most retailers buy products directly from manufacturers and wholesalers.

“Retailers can analyse their value chain to determine how their products impact biodiversity. The next step is to formulate specific policies to make a positive impact and minimise risks to biodiversity, followed by a transition plan with science-based targets,” says Henk Hofstede, Retail Sector Banker at ABN AMRO. “A dashboard with solid data helps to track and report on progress. After all, more and more stakeholders now expect companies to reduce their impact on biodiversity in order to maintain their licence to operate.”

ABN AMRO is committed to using its influence as a lender, investment services provider, client adviser, asset manager, investor and employer to minimise negative, and maximise positive, impacts on the environment. To this end, it has endorsed the Kunming-Montreal Global Biodiversity Framework, which provides guidelines for halting and reversing the loss of biodiversity in the coming years. This statement offers general guidance with respect to ABN AMRO’s environmental initiatives.