Annual sneaker, sofa, smartphone production destroys 2.56 million hectares of nature

The global production of smartphones, sneakers and sofas accounts for the destruction of roughly 2,564,000 hectares every year, ABN Amro reported in a new study. It is about the size of the city of Amsterdam multiplied by 117, and is equivalent to 28 times the size of the Veluwe region in central Gelderland, known for its wildlife, biodiversity, estates, and heathland.

The Dutch bank's analysts chose these three products as examples to illustrate how retailers will soon have to report their impact on biodiversity under new European legislation. They argued that retailers should charge more for their products, and use that money to counteract the loss of biodiversity in their production chains.

This would raise the price of smartphones by 7.10 euros and sneakers by 1.50 euros. Two-person sofas sell in lower volumes but have a higher impact per unit, which means they should cost about 109 euros more, the analysts believe.

The Veluwe covers 91,200 hectares of land, or 91.2 square kilometers. That includes a variety of nature reserve areas totaling 19,000 hectares in regions marked by forests, hills, and plains.

But the production and sales of 1.17 billion smartphones in 2023 led to the equivalent loss of 1,942,000 hectares of nature, roughly 21 times the size of the entire Veluwe. That takes various factors into account, like carbon emissions, air pollution, water pollution, water usage and land use. This had a negative economic impact of 8.31 billion euros in 2023 alone.

Some 324,000 hectares of nature are lost annually due to the 1.2 billion sneakers produced and sold annually. That equates to about 3.6 times the size of the Veluwe. This has an impact valued at 1.8 billion euros.

Roughly 3.3 times the Veluwe is lost due the sales and production of 17.2 million two-seat sofas. However, the damage to biodiversity is far greater per sofa than per phone or sneaker. Hence, the economic damage caused by this loss was approximately 1.87 billion euros per year, the bank said citing the True Price methodology for calculating revenue.

Biodiversity has declined by 70 percent worldwide in the past 50 years, causing irreparable damage in countless areas. According to ABN Amro, it is important from an economic point of view to reduce the damage.

For their part, consumers should simply buy less stuff, the bank said. Retailers can also take other measures to reduce the negative impact of the production of the goods they sell by using recycled materials and sustainable energy. Extending the lifespan of products is also a good step.

New European regulations require all large companies to report their biodiversity impact from 2025. That will require new skills and cooperation throughout the production chain, especially for retailers who buy most of their products directly from manufacturers and wholesalers.

Retailers will have to analyze their value chain, map out the impact of their products on biodiversity, and then formulate concrete policies with their producers to limit biodiversity risks.

It will be a complicated, but necessary process, ABN Amro said. “In the transition to a more sustainable society, much attention is rightly paid to climate change; however, biodiversity loss is an equally crucial theme,” the bank said. “More than half of the global economy is directly or indirectly dependent on revenues from ecosystem services.”