Biodiversity opportunities valued at $10t annually by 2030: World Economic Forum

Companies and investors should seize the opportunity to address this critical issue.

For more than 60 years, biodiversity loss has been accelerating rapidly across the globe, Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) Biodiversity Intactness Index (BII) revealed.

Agricultural productivity has also decreased by 23% due to land degradation, whilst $235b to $577b of global crop output is at risk annually due to decline in pollinators, according to a study by Amundi.

These losses are associated with human activities, especially companies’ heavy use of natural resources beyond the rates at which they can be replenished. Several activities also lead to the destruction of natural habitats and emissions that add to pollution and climate change.

Despite these losses, the earth’s natural resources continue to help industries globally through products like food and minerals, and services like climate regulation, air purification, and pollination.

Specifically, mangroves provide protection against floods during strong typhoons and tropical cyclones. However, over 35% of mangroves’ original cover is already lost. If this phenomenon continues and mangroves were to fully disappear, a 39% increase in floods is estimated, which might lead to annual property damages of $82b.

Given the increasing rate of biodiversity loss, corporates should see addressing this as an opportunity, which is believed by the World Economic Forum to have a value of approximately $10t by 2030.

To start, companies should be able to present appropriate and necessary ESG-related information to investors. This move will help investors allocate their capital and financial resources to companies that already have plans to address biodiversity loss, in contrast to businesses that lag behind in terms of biodiversity-related initiatives.

Investors, on the other hand, should also put more effort into understanding how companies depend on biodiversity, and how their activities can affect it. Amidst difficulties in the availability of data and clearer global guidelines, investors should still push companies to adopt best practices in terms of transparent ESG reporting through continuous engagement.

There is no denying the importance of biodiversity both to the society and the economy. And the efforts to preserve it must be greater given the rate at which biodiversity loss is accelerating. Both companies and investors must kickstart efforts in preserving nature, together with the materials and services it continuously provides.