Scientists agree: Biodiversity loss is now a business risk

Loss of nature is no longer just an environmental and social problem but has risen now to the level of a systemic economic risk. This is a key conclusion of a business and biodiversity assessment report from the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES). IPBES is the biodiversity equivalent of the UN’s Intergovernmental Panel on Climate Change (IPCC). 

The growth of the global economy has come at the cost of a massive loss of biodiversity, with a million species of plants and animals at risk of extinction. At the same time, all businesses are, in one way or another, dependent on the richness of the living world. Therefore, biodiversity degradation and nature loss can no longer be treated as ‘side issues’ in the business world. Instead, the IPBES report identifies nature loss as a systemic risk – with consequences for both the economy and human well-being. 

We can no longer say that we don’t know enough. The real challenge lies in decision-making, implementation and action. 

Dr. David Obura, Chair of IPBES

“All businesses depend on nature to some degree, sometimes indirectly, many very directly, and all businesses also have impacts on biodiversity,” says Dr. David Obura, marine ecologist and IPBES Chair. “What we’re now seeing is that supply chains themselves are at risk due to climate change, pollution, water loss and more. We are at planetary limits now, so understanding the systemic risks – and also the systemic opportunities that nature provides for businesses – is essential.” 

The report was published in February and has been accepted by representatives of the more than 150 governments that are members of IPBES, representing three quarters of all countries worldwide. This support from governments is a vital step, says Obura:

“Awareness of nature’s foundational role in our economies has accelerated over the past decades. The continued pressure and engagement from businesses and consumers will be decisive in translating this awareness into action.”

More than a hundred ways to mitigate the problems

79 experts from 35 countries worked on this report for three years, compiling and assessing existing documented knowledge, publications and data sets.  

In addition to its conclusions, the report also explores more than one hundred options for actions by businesses to address their impacts and dependencies, and for governments, financial institutions, consumers and others to facilitate this transformation. 

“We can no longer say that we don’t know enough. The real challenge lies in decision-making, implementation and action. Everyone has a role to play: governments in ensuring regulation and fairness, businesses as agents of change, financial institutions in channelling resources and consumers who decide what to buy and what pressure to bring to bear. Until now, our business models have not placed sufficient value on safeguarding nature. That is changing, and this report helps. But until our value systems and decisions truly reflect nature’s importance, degradation of biodiversity will continue,” Obura says.

Negative consequences of spendings

There is a long way to go to achieve a planet in balance. The report shows that for every dollar spent in nature-positive ways, more than 30 dollars are spent in ways that have negative effects on biodiversity. In 2023 alone, nature-negative spending amounted to 7.3 billion dollars. A third of this sum, 2.4 billion dollars, came from public spending on environmentally harmful subsidies, including for fossil fuels.

Helle Herk Hansen, Head of Environment, Vattenfall

Helle Herk-Hansen, Head of Environment at Vattenfall, sees several clear lessons to be learnt.

“The gap between investments with negative and positive impacts on nature is worrying. It highlights the important role companies play in addressing this issue, but it also points to the need to spread awareness of the situation and how it can be remedied,” says Herk-Hansen.

The report also highlights that less than one per cent of publicly listed companies report on their impact on biodiversity. Vattenfall belongs to this minority and has been working for the past two years in accordance with a new sustainability reporting standard that also covers biodiversity. For example, a Biodiversity Transition Plan for 2030 has been drawn up, setting out the work in the biodiversity area with targets, governance and strategic focus areas. 

“Our goal is for the energy transition to be nature inclusive. We achieve this by including nature considerations in the planning, design and operation of our assets.  We also use new technology to monitor, track impacts and mitigate our influence, for example by using AI, drones and satellites. A significant part of our biodiversity work is linked to our research projects that provides the foundation to ensure that the decisions we make regarding measures are based on science. Fundamentally, delivering on our goal of becoming fossil-free goes hand in hand with our efforts in the biodiversity area since biodiversity and climate change are interlinked.”