Survey Understanding changes in business strategies regarding biodiversity and ecosystem services Joël Houdet a, ⁎, Michel Trommetter b , Jacques Weber c a A@L Integrated Sustainability Services, 25 Melville Road, Hyde Park Ext. 2, Sandton, Johannesburg, South Africa, Association Synergiz, 69 rue de Rochechouart, 75009, Paris, France b INRA, UMR GAEL INRA — UPMF, BP 47, 38040, Grenoble Cedex 9, France. Department of Economics, Ecole Polytechnique, Palaiseau, France c CIRAD, Unité de recherche Ressources forestières et politiques publiques, 42 rue Scheffer, 75116 Paris, France abstract article info Article history: Received 2 September 2009 Received in revised form 15 September 2011 Accepted 12 October 2011 Available online 22 November 2011 Keywords: Biodiversity Ecosystem services Business Strategy Stakeholders Tools Impact mitigation Payments for ecosystem services Property rights Indicators Business activities play a major role in biodiversity loss so that firms are under increasing pressures from stakeholders to mitigate their negative impacts on ecosystems. As business attitudes, policies and behaviors regarding biodiversity and ecosystem services (BES) progressively change, a better understanding of how business strategies may be framed and implemented is required. In the first part of this paper, we discuss how biodiversity is usually understood as an external environmental constraint on business activities, and how this perception influences arbitrages. We then discuss how assessing BES interdependencies (impacts and dependencies) may bring about new business strategies and needs: we explore the opportunities and challenges of emerging mechanisms of payments for ecosystem services and expose the need for standard- ized sets of indicators at different scales for the effective management of their BES dependencies and impacts. © 2011 Elsevier B.V. All rights reserved. 1. Introduction During the past few decades, firms have been under increasing pres- sures from stakeholders to reduce their impacts on ecosystems so that environmental issues have progressively become key strategic variables for them (climate change, water, pollutions), notably in terms of disclo- sures (Cho and Patten, 2006; Cormier et al., 1993) now mandatory in many countries (e.g. New Economic Regulation law for France from 2001). Bellini (2003) argues that companies have progressively taken such issues into account under the impulsion of three types of arbitrage: legislative or normative, economic and technical. Because biodiversity was, up to recently, at best an emerging issue among others for most firms, the business community has been officially asked to contribute to the objectives of the Conven- tion on Biological Diversity (CBD) in March 2006 in Curitiba (CoP 8): decision VIII/17 emphasized the need for firms to adopt best practices for integrating biodiversity concerns into their strategies and decision- making processes. As business attitudes, policies, and behaviors progressively change worldwide (Houdet, 2008a,b; TEEB for business 2010), a better understanding of how corporate strategies pertaining to BES may be framed is needed. Our analysis of business strategies regarding biodiversity seeks to be complementary to mechanisms and measures for biodiversity conser- vation. In this paper, we do not discuss corporate responsibility towards nature 1 but seek to analyze how different business perceptions regard- ing biodiversity may influence strategies and behaviors. First, we discuss the implications of perceiving biodiversity as an external environmental constraint on business activities: this widespread way of understanding interactions between business and biodiversity, which falls within the traditional competitiveness versus environment debate (Section 2), typ- ically leads to business or project legitimization strategies through (a) negotiations with stakeholders throughout decision-making processes (Section 3.1), (b) BES valuation for cost–benefit analyses (Section 3.2) and (c) negotiated impact mitigation measures (Section 3.3). We then explore how assessing a firm's interdepen- dencies with biodiversity may bring about new business strategies and practices (Section 4.1), highlighting the opportunities and challenges linked to emerging markets for ecosystem services (Section 4.2) as well as the need for standardized measurement protocols so as to help Ecological Economics 73 (2012) 37–46 Abbreviations: BES, biodiversity and ecosystem services; ES, ecosystem services; CBA, cost–benefit analysis; CEA, cost–efficiency analysis. ⁎ Corresponding author. Tel.: + 27 73 446 2671. E-mail address: jhoudet@synergiz.fr (J. Houdet). 1 See Bazin (2009) for a recent analysis of associated theoretical paradigms. 0921-8009/$ – see front matter © 2011 Elsevier B.V. All rights reserved. doi:10.1016/j.ecolecon.2011.10.013 Contents lists available at SciVerse ScienceDirect Ecological Economics journal homepage: www.elsevier.com/locate/ecolecon