Introduction

National and global economic stability, human security, and resilience depend on the health of the Earth’s natural systems. While all ecosystems are important, scientific evidence suggests that a subset are so foundational to economic growth and wellbeing that their degradation could materially impact food, water, and energy prices, as well as financial markets. This report introduces the concept of Global Systemically Important Natural Systems (G-SINS), drawing an analogy to Global Systemically Important Banks (G-SIBs). Just as certain banks are deemed ‘too big to fail’, some natural assets are sufficiently important to system stability that their degradation warrants enhanced monitoring, governance, and risk management.

Critical natural systems as macro-critical infrastructure

Critical natural systems, such as tropical forests, major river basins, and coral reefs, act as essential infrastructure. They provide ecosystem services that underpin economic activity and buffer against shocks. Research indicates that the global economy depends heavily on these services, with an estimated US$44–58 trillion of global GDP being moderately or highly dependent on nature. At the national level, environmental degradation can cost economies significantly; for example, it is estimated to cost the UK economy between 6% and 12% of GDP.

New evidence highlights the scale of these dependencies. Over US$1 trillion of annual GDP in China, Europe, and the USA depends on forest-linked rainfall, known as ‘green water’. Across more than 130 countries, direct economic dependencies on ‘green water’ exceed US$5 trillion, with upstream supply-chain dependencies of almost US$3 trillion. In Brazil, hydropower provides over 80% of electricity, which is directly linked to the moisture recycling services provided by the Amazon rainforest.

Shortfalls in current protection and restoration efforts and barriers to mobilising private investment

Despite progress in global policy, many critical natural systems continue to deteriorate. There is a persistent misallocation of capital, with US$7.3 trillion per year flowing into environmentally harmful activities, while only US$220 billion is invested in nature-based solutions. This 30:1 ratio reflects structural market failures, including unpriced externalities and information failures. Fewer than 1% of publicly reporting companies mention biodiversity impacts in their reports, and many corporate governance structures prioritise short-term returns over long-term systemic risks.

Closing the gaps in national and global risk governance through designation of systemically important natural systems

The SINS framework aims to identify ecosystems whose degradation poses systemic risks due to their size, interconnectedness, and non-substitutability. At the national level, Armenia’s Lake Sevan serves as a case study, generating US$400 million in direct economic value annually, equivalent to 1.5% of the country’s GDP. Formally designating such assets as SINS could help embed nature-related risks into existing governance frameworks.

The report suggests several levers for implementation. Ministries of Finance could integrate SINS into debt sustainability frameworks and Article IV surveillance, as nature loss is already driving sovereign risk and reducing fiscal space. For financial institutions, SINS designation could clarify fiduciary duties and inform capital adequacy requirements. Corporates could use standardised data on SINS to meet disclosure requirements under the EU Deforestation Regulation (EUDR) and the Corporate Sustainability Reporting Directive (CSRD). Deforestation in West Africa, for instance, has been linked to a 280% increase in global cocoa prices, demonstrating the inflation and monetary policy implications of nature loss.

Governance and distributional considerations for SINS

The governance of SINS must reinforce national sovereignty and ensure equitable benefit sharing. Indigenous Peoples and local communities (IP and LCs) are essential stewards, as their lands overlap with approximately 40% of the world’s protected areas. Outcomes for conservation are typically stronger where these communities exercise meaningful governance. Any SINS framework must embed free, prior, and informed consent (FPIC) requirements and ensure that financial benefits flow directly to local stewards who bear the local costs of conservation.

Conclusion

The report concludes that the current moment, marked by supply chain shocks and accelerating erosion of natural systems, requires a systemic response. SINS designation provides a shared, evidence-based reference point to coordinate interventions. By using existing levers—such as the International Monetary Fund’s Article IV surveillance, the Financial Stability Board’s crisis preparedness reviews, and the Tropical Forest Forever Facility—policymakers can begin to price in the risks that have previously been invisible before the costs of inaction become irreversible.