The escalating loss of biodiversity poses a systemic threat to the global economy, potentially undermining financial stability and impacting businesses across all sectors, according to a new report released on Wednesday, . The assessment, from the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), emphasizes that companies are both dependent on and have an impact on the natural world, making proactive engagement with biodiversity conservation a business imperative, not merely an environmental concern.
The report, presented in Manchester, underscores that the degradation of ecosystems carries significant economic risks, including increased raw material costs, supply chain disruptions, and potential consumer backlash. “Companies and other key actors can either pave the way to a more sustainable global economy or ultimately risk extinction – both of species in nature and potentially their own,” stated Matt Jones, a co-chair of the IPBES “Business and Biodiversity” assessment, from the United Kingdom.
A Business Imperative, Not an Option
Ximena Rueda, another co-chair from Colombia, reinforced this message, stating that “better stewardship of nature is not an option for businesses, but a necessity.” She highlighted the link between biodiversity and both profitability and long-term corporate viability, as well as a more equitable and sustainable future. A central recommendation of the report is increased transparency, urging companies to publicly disclose their impacts on and dependencies on biodiversity.
Currently, less than 1% of publicly listed companies report on their biodiversity impacts, according to IPBES. The new assessment aims to provide the appropriate methodologies, metrics, and policy instruments tailored to specific business sectors. Stephen Polasky, the third co-chair from the United States, explained that the goal is to “shift the discussion from voluntary sustainability pledges to a science-based roadmap for systemic change.”
Early Action Mitigates Widespread Consequences
The report stresses that proactive measures to address biodiversity loss can help avoid escalating costs, such as rising food prices, increased insurance premiums, and broader economic instability. Experts warn that delaying action will exacerbate these risks. “We need to move away from the false notion that governments and decision-makers must be either for the environment or for the economy,” Polasky asserted.
Representatives from over 150 member governments approved the report during the IPBES Plenary session in Manchester. The assessment emphasizes that nature remains a profoundly undervalued foundation of the global economy, with companies often finding it more profitable to destroy biodiversity than to protect it.
A “Critical and Pervasive Risk”
“The growth of the global economy has come at the expense of immense biodiversity loss, which now represents a critical and pervasive systemic risk to the economy, financial stability, and human well-being,” the IPBES report concludes. This risk is compounded by ongoing financial flows that incentivize environmentally damaging activities. In , global public and private financial flows with negative impacts on nature totaled an estimated $7.3 trillion, dwarfing the $0.22 trillion invested in conservation and restoration efforts.
The report, based on thousands of sources and years of research involving 79 leading experts from 35 countries, highlights the central role businesses play in halting and reversing biodiversity loss. However, companies currently bear limited or no financial responsibility for their negative impacts.
The report outlines a range of concrete actions, including improving efficiency, reducing waste and emissions, and adapting policy, legal, and regulatory frameworks. A key message is that businesses cannot achieve these changes in isolation, requiring systemic adjustments to economic and financial systems, social norms, and data collection technologies.
An Often-Underappreciated Dependency
Qu Dongyu, Director-General of the Food and Agriculture Organization of the United Nations (FAO), emphasized the fundamental importance of biodiversity, stating that it underpins all economies and societies. “Biodiversity creates jobs and income, regulates climate, and secures the supply of food, water, and health systems.”
The report points out that the perceived self-evidence of biodiversity often obscures the extent of our dependence on it. “All too often, biodiversity is an invisible and dispensable asset on the balance sheet.” While awareness of the risks associated with biodiversity failure is growing, this shift in thinking is not optional. “It is essential for our common future.”
Khaled El-Enany, Director-General of UNESCO, stated that “Biodiversity is never a peripheral issue.” He emphasized its core role in determining business success or failure, specifically the resilience of value chains.
Silke Düwel-Rieth, Head of Economy & Markets at WWF Germany, drew a parallel between the biodiversity crisis and the climate crisis, noting that the former is less visible but equally dangerous. She cautioned that many companies underestimate the threat that the loss of species and ecosystems poses to their business models, impacting access to essential resources like clean water, fertile soils, stable supply chains, and natural raw materials. This is, she stated, fundamentally an economic question.
