Nature underpins every business, and ignoring biodiversity risks threatens supply chains, financial stability and long-term growth
As global economies continue to expand, businesses face mounting risks from biodiversity loss, according to an assessment by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), which finds that every business depends on nature and that failure to measure, disclose and manage impacts and dependencies on biodiversity could undermine financial stability, supply chains and long-term economic resilience, while coordinated action by businesses, governments and financial institutions can still halt and reverse nature’s decline.
The assessment, released on Monday, highlights that even businesses that appear far removed from nature rely directly or indirectly on ecosystem services such as water supply, flood regulation, climate moderation, food systems, tourism and cultural values. However, most businesses currently bear little or no financial cost for damaging biodiversity and often lack mechanisms to generate value from positive impacts on nature.
Matt Jones
“This report draws on thousands of sources, bringing together years of research and practice into a single integrated framework that shows both the risks of nature loss to business and the opportunities for business to help reverse this. This is a pivotal moment for businesses and financial institutions as well as governments and civil society, to cut through the confusion of countless methods and metrics, and to use the clarity and coherence offered by the report to take meaningful steps towards transformative change. Businesses and other key actors can either lead the way towards a more sustainable global economy or ultimately risk extinction both of species in nature, but potentially also their own,” says Matt Jones, Co-chair of the Assessment.
According to the assessment, global public and private finance flows with directly negative impacts on nature were estimated at USD 7.3 trillion in 2023, including USD 4.9 trillion in private finance and around USD 2.4 trillion in public spending on environmentally harmful subsidies.
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These flows are often supported by lobbying from businesses and trade associations, disseminating practices that drive biodiversity loss. In contrast, just USD 220 billion or around three pc of total public funds and incentives was directed towards activities contributing to the conservation and restoration of biodiversity.
Prof Stephen Polasky
“The loss of biodiversity is among the most serious threats to business, yet the twisted reality is that it often seems more profitable to businesses to degrade biodiversity than to protect it. Business as usual may once have seemed profitable in the short term, but impacts across multiple businesses can have cumulative effects, aggregating to global impacts, which can cross ecological tipping points,” says Prof Stephen Polasky, Co-chair of the Assessment.
Measuring impacts and dependencies
The assessment finds that a wide range of methods, data sources and knowledge systems already exist to measure business impacts and dependencies on biodiversity and can inform decision-making today. However, far more progress has been made in assessing impacts than in measuring dependencies and uptake remains low and uneven across sectors and regions. Less than 1 pc of publicly reporting companies currently mention biodiversity impacts in their disclosures.
A recent survey of financial institutions representing 30 pc of global market capitalisation identified three main barriers to greater uptake of nature-related risk assessment: Access to reliable data, access to robust models and access to credible scenarios.
The authors reveals that no single method is suitable for all decisions. Instead, the choice of tools must reflect context and purpose, with multiple methods often required. The report proposes three overarching characteristics to guide method selection that is coverage, referring to geographic scope and breadth of impacts and dependencies, accuracy, describing how well results reflect reality and responsiveness or the ability to detect changes attributable to business actions.
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The report says that operational decisions require site-specific, bottom-up approaches such as local observations, participatory monitoring, mapping and spatial analysis. In contrast, portfolio, corporate and value-chain decisions are better supported by top-down methods, including life-cycle assessments and macro-scale environmental-economic models that operate at broader geographic scales.
Another key finding is that businesses can significantly improve the measurement and management of biodiversity impacts through stronger engagement with science and indigenous and local knowledge.
Ximena Rueda
“Data and knowledge are often siloed. Scientific literature is not written for businesses and a lack of translation and attention to the needs of business has slowed uptake of scientific findings. Among business there is also often limited understanding and recognition of Indigenous Peoples and local communities as stewards of biodiversity and, therefore, holders of knowledge on its conservation, restoration and sustainable use,” says Prof Ximena Rueda, Co-chair of the Assessment.
Industrial development threatens around 60 pc of indigenous lands globally, with a quarter of indigenous territories under high pressure from resource exploitation, yet Indigenous knowledge remains inadequately represented in business research and decision-making.
Priorities and options for business action
The report makes clear that all businesses, including financial institutions, have a responsibility to address their impacts and dependencies on nature and can take immediate action when supported by an enabling environment. While some trade-offs constrain transformative change, many actions such as improving efficiency and reducing waste and emissions can benefit both biodiversity and business performance today.
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“Better engagement with nature is not optional for business, it is a necessity. This is vital for their bottom line, long-term prosperity and the transformative change needed for a more just and sustainable future. To avoid greenwashing though, it is essential that businesses have transparent and credible strategies, which clearly demonstrate their actions and how they contribute to biodiversity outcomes and that they publicly disclose their impacts and dependencies as well as their lobbying activities,” says Rueda.
The assessment explores both direct actions businesses can take and signalling actions that can influence wider systems, across four decision-making levels include corporate, operations, value chain and portfolio. It also identifies knowledge gaps relating to business relevant data, accessibility and transparency, completeness of evidence and the applicability and adoption of existing methods.
Enabling environment and global goals
A central message of the assessment is that businesses cannot deliver the scale of change required on their own. Collaboration across governments, financial actors, civil society, indigenous peoples, local communities and consumers is essential.
The report identifies five core components of an enabling environment which are policy and regulation, economic and financial systems, social values and norms, technology and data, and capacity and knowledge.
“Better stewardship of biodiversity is central to managing risk across the whole of the economy and throughout societies, it is not some distant environmental issue but a core challenge now in every boardroom and cabinet-room. We need to move beyond the fallacy of a binary choice between governments and decision-makers being either pro-environment or pro-business. All business depends on nature, so actions that conserve and sustainably use nature can also be those that help businesses thrive in the long-term,” adds Polasky.
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David Obura
“This first-ever fast-track IPBES Assessment Report was delivered with urgency as we begin the second half of this decade, at the request of our Governments, as a vital contribution to efforts by businesses, governments, financial actors and the whole of society to meet the goals and targets of the Global Biodiversity Framework, the Sustainable Development Goals and the Paris Agreement on climate change. It relates very directly to Target 15 of the Global Biodiversity Framework, which focusses on businesses, but ultimately to all our shared global goals because businesses are at the centre of how our economies and large parts of our society, depend on and impact nature,” says David Obura, Chair, IPBES.
Luthando Dziba
“We thank the Co-chairs and all the authors of this Assessment. This Report builds very directly on the insights and evidence of many earlier IPBES Assessments particularly the 2019 Global Assessment, the 2022 Values Assessment and the 2024 Nexus and Transformative Change Assessments, offering much-needed clarity and coherence to guide actions by business and all decision-makers. Nature is everybody’s business and the conservation, restoration and sustainable use of biodiversity is central to business sustainability and success,” says Luthando Dziba, Executive Secretary, IPBES.