Nature risk is now financial risk

The significant risks to the global economy from ongoing nature loss have been starkly highlighted in a recent report. In its assessment on Business and Biodiversity¹, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) warns how highly extractive and biodiversity-harmful activities are threatening critical ecosystem services such as pollination, water filtration and climate regulation.

As a result, sectors such as agriculture, construction and manufacturing face reduced access to raw materials, rising costs and operational disruptions.

Beyond safe operating limits

This assessment coincides with the UN Water Bankruptcy Report², which illustrates how we have moved beyond safe operating limits for life's most essential commodity. Many river basins and aquifers have passed points of no return, while corporate water consumption continues to exceed nature’s ability to replenish these sources. According to the report, deep systemic change is required to reverse the significant degradation of key water reserves.

The core problem is most companies do not measure these nature-based dependencies. Biodiversity is treated as a compliance issue rather than a strategic, material and direct risk to operations, supply chains and financial performance.

Imbalance between damage and conservation

Diving into the IPBES assessment, the findings highlight the stark imbalance between damage and conservation. In 2023, an estimated USD 7.3 trillion of capital flowed into biodiversity-damaging activities compared with USD 220 billion in conservation capital flows. Less than 1% of listed firms disclosed biodiversity impacts.

Rather than prescribing a single “best” way to measure nature impacts, the report’s real contribution is its emphasis on choosing the right method for the right situation. It shows that effective action comes from applying tools that are appropriate for the specific asset, sector or decision being made – and from being clear about what each method can and cannot reveal.

What does this mean for investors?

As nature-related disclosures continue to improve, investors now have the opportunity to pair this maturing data with tools that turn it into genuinely decision-useful insights across asset classes. The allocation of capital – matched with sustained dialogue and consistent stewardship efforts – can help close the nature protection gap. The methods and tools to manage biodiversity already exist; what’s needed is a more coordinated, forward‑looking use of them to realign incentives – moving the focus from short‑term performance to the long‑term resilience that healthy ecosystems ultimately support.

¹ IPBES Business and Biodiversity Assessment
² Global Water Bankruptcy Report 2026