Introduction

The report highlights that biodiversity and ecosystem services provide $125–145 trillion annually in value, yet biodiversity loss remains largely overlooked in corporate strategies. Drivers such as deforestation, climate change, and pollution must be urgently addressed. Companies are urged to adopt net-positive biodiversity impacts across operations and supply chains, aligning with international frameworks like the Convention on Biological Diversity.

The value of biodiversity

Biodiversity, which supports species resilience and ecosystem functionality, is critical for sustaining economies and societies. Biodiversity hotspots, covering just 2.4% of the Earth’s surface, are home to over half of endemic species and require prioritised protection. Indigenous communities are key stewards of biodiversity, and companies must engage with them to secure sustainable sourcing practices.

The business case for protecting biodiversity

Biodiversity loss creates risks across four areas:

• Supply capacity: Over 50% of global GDP depends on nature, and industries like agriculture face significant risks from pollinator loss, degraded soils, and disrupted ecosystem services.
• Consumer preferences: Sustainability drives purchasing decisions, with 75% of US millennials considering environmental factors and paying more for sustainable products.
• Market opportunities: Nature-positive solutions could unlock $10 trillion and 400 million jobs by 2030. Technological innovations, including precision agriculture and land-use monitoring, are essential for these solutions.
• Policy and legal risks: Governments are introducing regulations such as the EU’s biodiversity strategy, targeting 30% land and sea protection by 2030. Non-compliance could lead to severe financial and reputational impacts, as seen in the $65 billion Deepwater Horizon litigation costs.

Engagement priorities and governance

Companies must assess and disclose dependencies on biodiversity, implement deforestation-free supply chains, and adopt regenerative agriculture and nature-based solutions. Governance structures should integrate biodiversity risks, applying the mitigation hierarchy: avoid, minimise, rehabilitate, and offset. Boards must ensure supply chains are sustainable and advocate for strong biodiversity policies. Examples like Kering and BP demonstrate leadership in committing to net-positive biodiversity impacts.

Measurement and strategy

Understanding biodiversity dependencies is crucial, with tools like the Task Force on Nature-related Financial Disclosures (TNFD) aiding measurement. Companies should assess impacts across their value chains and implement targeted strategies to mitigate risks. Key pillars include:

• Deforestation elimination: Companies must eliminate deforestation from supply chains for commodities like soy and palm oil. Deforestation rates, exacerbated during COVID-19, contribute to climate change and biodiversity loss.
• Regenerative agriculture: Transitioning to sustainable practices restores soil health, reduces chemical inputs, and integrates forestry. These measures improve resilience and address food security challenges.
• Nature-based solutions (NbS): NbS like mangrove restoration and green roofs address climate and biodiversity challenges simultaneously while ensuring net biodiversity gains.

Spotlight issues

• Deforestation: Forests are critical for carbon storage and climate regulation, but tropical deforestation continues at alarming rates. Companies must adopt traceable strategies to eliminate deforestation and improve sourcing practices.
• Regenerative agriculture: Agriculture accounts for half of habitable land use, with unsustainable practices depleting soil and ecosystems. Supporting regenerative practices ensures food security for a growing population while addressing climate impacts.
• Nature-based solutions (NbS): NbS, such as wetland restoration, offer cost-effective ways to mitigate climate risks while enhancing biodiversity. Companies should align NbS with sustainability goals to maximise their impact.

Conclusion

Reversing biodiversity loss is critical for economic resilience. Companies must integrate biodiversity into governance and operations, aiming for net-positive impacts. Financial institutions and investors play a key role in advocating for stronger commitments. Innovation, partnerships, and supply chain engagement are essential for achieving these goals while addressing interconnected challenges like climate change and biodiversity loss.