Nature loss could erode up to 17% of global GDP in next 15 years, PwC warns

Financial markets are exposed to ecosystem degradation risks.

Up to $11t in market value and 12% to 17% of global gross domestic product (GDP) face risk from nature loss within the next 15 years, according to analysis by PwC.

The report estimates that 11% to 14% of overseas investments and 12% to 18% of stock exchange market value are exposed to nature-related risks, linking these to ecosystem degradation that reduces returns, lowers market value, and weakens GDP.

PwC said nature loss affects financial institutions through its impact on economic activity and business value, with declining ecosystem services reducing returns and feeding into credit pricing, underwriting, and market risk decisions.

The analysis of Australia, Canada, New Zealand, and Singapore shows that at least four sectors in each country have more than 9% of economic activity at risk from the degradation of a single ecosystem service.

It says risk is concentrated in specific sectors and value chains rather than evenly distributed across economies.

PwC identified transmission channels through which nature loss affects financial portfolios, including reduced ecosystem services such as water provision, flood protection, soil stability, and air quality, which lead to higher input costs, production downtime, and asset damage.

These effects feed into lower corporate earnings, higher default risk, falling collateral values, asset repricing, and insurance losses.

Country results show different exposure patterns, with Singapore recording 55% of value at risk linked to international supply chains and 45% linked to domestic activity.

Australia’s mining sector accounts for 15% of GDP, with 22% of its value at risk, alongside exposure in agriculture to flooding, landslides, and wildfire-related air quality disruption.

PwC noted that whilst many financial institutions recognise nature as a risk factor, it is not yet fully integrated into credit and underwriting models.

It said institutions can identify portfolio hotspots, incorporate nature risk into stress testing, and map supply-chain exposures to improve pricing and risk management.

The report concludes that nature loss is already shaping financial risk and that existing stress-testing approaches can be adapted to quantify and manage portfolio exposure.