Businesses face an existential threat from the accelerating loss of biodiversity, according to a landmark report released today, . The assessment, prepared by 79 experts from 35 countries under the auspices of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), warns that current economic models are fundamentally incompatible with a sustainable future.
The report, titled ‘The Impact and Dependence of Business on Biodiversity and Nature’s Contributions to People,’ highlights the significant risks posed to the economy, financial stability, and individual companies by the degradation of natural ecosystems. This isn’t merely an environmental concern; it’s a core business risk, according to Professor Stephen Polasky of the University of Minnesota, co-chair of the assessment. “The loss of biodiversity is among the most serious threats to business,” he stated.
The findings come at a time when global economic growth has demonstrably come at the expense of nature. The IPBES assessment, described as the “biodiversity equivalent of the UN’s climate panel, the IPCC,” underscores a troubling paradox: it is often more profitable for businesses to degrade biodiversity than to protect it. This short-term profitability, however, is creating systemic risks that could ultimately undermine long-term economic viability.
Beatrice Crona, a researcher at the Stockholm Resilience Centre and co-author of one of the report’s chapters, emphasized the urgency for companies to reassess their relationship with the natural world. “As companies, what you need to do now is to consider nature as something real, both in your impact and in your risks,” she said. “Because at some point, degraded ecosystems will become such a risk that certain things will become uninsurable.” This suggests a potential future where businesses heavily reliant on ecosystem services – from agriculture to manufacturing – could face escalating insurance costs or even be unable to obtain coverage.
The report’s release coincides with a growing awareness of the “evidence emergency” in biodiversity conservation, as highlighted by the UK-based Wildlife Trusts and discussed at the annual IPBES conference in Manchester this week. Despite numerous conservation initiatives, many lack robust scientific backing, leading to questions about their effectiveness. Scientists are now focused on building “evidence banks” to inform policymaking and ensure that conservation efforts are grounded in research.
The implications for businesses are far-reaching. The report doesn’t offer a prescriptive list of actions, but implicitly demands a fundamental shift in how companies assess and manage risk. Traditional financial risk models often fail to adequately account for the value of ecosystem services and the potential costs of biodiversity loss. Companies will need to integrate natural capital accounting into their financial reporting and strategic planning.
This shift is already beginning to manifest in innovative business models. A case study of 3Bee, an Italian start-up focused on biodiversity regeneration, published today, , illustrates how businesses can simultaneously pursue profit and ecological restoration. The study, published in the International Entrepreneurship and Management Journal, highlights the importance of stakeholder engagement and digital technologies in scaling sustainable business models.
The 3Bee example suggests that successful nature-positive businesses require a dynamic approach, adapting through phases of innovation, validation, pivoting, and scaling. This requires not only technological innovation but also a willingness to collaborate with diverse stakeholders, including local communities and regulatory bodies.
The IPBES report serves as a stark warning. The current trajectory of economic growth is unsustainable, and businesses that fail to adapt will face increasing risks. The message is clear: integrating biodiversity considerations into core business strategy is no longer a matter of corporate social responsibility, but a matter of survival. The report’s findings are likely to fuel increased scrutiny from investors, regulators, and consumers, further accelerating the demand for sustainable business practices.
The rate of species extinction is currently estimated to be between 100 and 1,000 times the pre-human, or ‘background’ rate, a statistic that underscores the severity of the crisis. Addressing this requires a systemic overhaul of economic incentives and a fundamental re-evaluation of the relationship between business and nature.
