Jakarta – The world’s leading scientific authority on biodiversity has delivered its starkest message yet to corporate leaders and investors: transform business models or risk economic decline driven by accelerating nature loss.
The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), often described as the “IPCC for nature,” released its landmark Business and Biodiversity Assessment in Manchester on Monday, February 9, warning that biodiversity loss caused by economic activity poses “a critical and pervasive systemic risk” to every business, economic growth and human wellbeing.
The report, based on three years of research and representing a consensus of more than 150 member governments, scientists, Indigenous Peoples and local communities, was commissioned to support Target 15 of the Kunming–Montreal Global Biodiversity Framework on corporate disclosure and action for nature.
International body on the state of global biodiversity
Established in 2012, IPBES is an intergovernmental body that assesses the state of global biodiversity, ecosystems and the benefits nature provides to people. Its assessments synthesise the best available science alongside Indigenous and local knowledge to inform policymaking worldwide.
Much like the Intergovernmental Panel on Climate Change (IPCC) provides authoritative assessments on climate science, IPBES evaluates the drivers and impacts of biodiversity loss, offering governments and stakeholders a scientific basis for action.
This latest assessment marks the first comprehensive global review of how business practices interact with biodiversity — and how economic systems both depend on and undermine nature.
A system at risk
The IPBES assessment concludes that current business conditions are incompatible with a sustainable future. Finance continues to flow heavily toward industries driving environmental degradation.
According to the report, USD 2.4 trillion is spent annually on business activities that drive nature’s destruction through subsidies. Global public and private finance flows with directly negative impacts on nature reached an estimated USD 7.3 trillion in 2023, with private finance accounting for USD 4.9 trillion.
Meanwhile, only USD 135 billion to USD 156 billion per year is directed toward biodiversity conservation and restoration globally — a fraction of what is needed.
The assessment also highlights that while human-produced capital has roughly doubled per capita over the past two centuries, natural capital stocks have declined by nearly 40 per cent. “Finance is flowing to industries driving the destructive cycle, undermining business goals,” the report states
Less than 1 per cent of companies currently report their biodiversity impacts, despite the growing adoption of disclosure frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD).
Indigenous lands under pressure
The assessment underscores the role of Indigenous Peoples and local communities in safeguarding biodiversity. Sixty per cent of Indigenous lands globally are threatened by industrial development, and 25% of Indigenous territories face high pressure from resource exploitation.
At the same time, IPBES emphasises that Indigenous knowledge systems hold critical insights for sustainable resource management — knowledge that businesses can learn from.
A separate brief from research group Zero Carbon Analytics, released alongside the report, identifies sectors and companies most exposed to biodiversity loss.
Mining and power generation sectors could lose up to 25 per cent of profits within five years due to nature loss, the brief finds. Electric vehicle maker Tesla incurred USD 5.7 billion in additional costs and saw a 3.1 per cent share price drop following protests and regulatory restrictions on water use affecting its German factory. Toyota filed for USD 387 million in damages in 2022 due to flooding in South Africa.
The Florida tourism industry suffered USD 317 million in sales losses linked to red tide blooms. Major global corporations, including Unilever, Tyson Foods, Roche, Procter & Gamble, Anglo American and Holcim Group, are identified as highly vulnerable to nature-related risks.
Barriers and solutions
The IPBES report acknowledges that businesses face challenges in measuring and managing nature-related impacts, with no single method suitable for all sectors. Still, the report insists that action cannot wait.
Business leaders have largely welcomed the assessment. Eva Zabey, CEO of Business for Nature, described it as “a scientific reality check,” while investors emphasised the need for a clearer understanding of nature-related risks to guide capital allocation.
Former Unilever CEO Paul Polman said nature’s absence from corporate balance sheets represents “one of the defining economic risks of our time,” arguing that markets fail when forests are worth more logged than standing.
IPBES warns that biodiversity loss is no longer a peripheral environmental issue but a systemic financial risk that could destabilise supply chains, undermine economic growth and erode human wellbeing.
“The evidence is clear,” the report states: every business, including financial institutions, must act immediately and publish credible strategies to avoid greenwashing and contribute to global biodiversity and climate goals. (nsh)
Banner photo: Image generated by OpenAI’s DALL·E via ChatGPT (2024)
