The global economy, now valued at hundreds of trillions of pounds, depends heavily on nature’s myriad services. According to the OECD Biodiversity Report, more than half of the world’s GDP—an estimated £125 to £140 trillion—relies on natural processes such as crop pollination, water purification, and climate regulation. These ecosystem services quietly underpin industries ranging from agriculture to pharmaceuticals, making the loss of biodiversity a clear economic threat. Alarm bells are ringing across financial and policy spheres, as highlighted by KPMG, because failing to protect these services could precipitate vast financial losses, supply chain disruptions, and global instability.
In essence, biodiversity isn’t just an environmental concern but a cornerstone of economic resilience. When we consider how pollinators help yield billions of pounds worth of crops each year, or how wetlands act as cost-effective flood defense systems, the true value of nature emerges. Studies presented by BNP Paribas emphasize that safeguarding these natural resources translates into tangible financial benefits for businesses and communities alike. However, unchecked deforestation, pollution, overfishing, and climate change are eroding the planet’s biodiversity, placing at risk trillions of pounds in wealth creation. This article will explore how biodiversity loss threatens the global economy, the scale of the £125 trillion figure, and what practical steps can be taken to protect these invaluable natural assets.
Nature, often viewed as an externality in traditional economics, is now recognized as a fundamental input for production and value creation. One of the clearest examples is agriculture: pollinators like bees and butterflies carry out a service estimated to be worth hundreds of billions of pounds per year. Without these pollinators, farmers would face reduced yields or be forced to adopt manual pollination methods—an extremely labor-intensive and expensive proposition. Water availability is another example. Forests and wetlands capture, filter, and store freshwater resources. Degraded ecosystems cannot perform these roles efficiently, leading to increased treatment costs, floods, and droughts. These disruptions in water regulation cascade into losses in agriculture, hydropower, and human health outcomes.
Such intricate interdependencies reveal the magnitude of the crisis. The exponential growth of human activity, from urban sprawl to industrial farming, places intense pressure on ecosystems. Overfishing not only endangers fish stocks but also jeopardizes coastal economies relying on consistent seafood supply. Companies in sectors like tourism, manufacturing, and even finance are gradually awakening to the fact that if the oceans become sterile or forests are razed, the flow of raw materials, consumer demand, and investor confidence can all suffer. The BCG underscores that biodiversity loss creates large-scale risks, including raw material shortages, social unrest, and escalating insurance claims after extreme weather events.
Quantifying nature’s services with a monetary value helps policymakers, businesses, and communities grasp how ecosystem degradation translates into real economic harm. The £125 trillion figure, drawn from research including the OECD Biodiversity Report, encompasses essential services such as water regulation, soil formation, climate stabilization, and pollination. These ecosystem services allow industries to flourish without incurring massive additional costs for artificially replicating nature’s processes. While critics argue that placing a price tag on nature risks commodifying it, many experts see it as a pragmatic approach to integrate environmental considerations into economic decision-making.
By measuring the economic value of biodiversity, nations can develop more robust policies. For instance, imposing stricter regulations on deforestation in critical habitats might seem costly at first, but when weighed against the long-term value of preserved water resources and carbon sequestration, the net benefit becomes clear. This valuation also resonates with companies, encouraging them to account for potential resource constraints in their supply chains. Investors, too, are better equipped to evaluate risks, demanding transparency from businesses with high environmental footprints. In short, these estimates function as a powerful call to action, urging stakeholders to recognize that when nature suffers, the economy soon follows.
Roughly 75% of the world’s crops rely on animal pollination, illustrating nature’s role in global food production. Without pollinators, farms would produce diminished harvests and countries would grapple with soaring food prices. This is why strategies to combat pollinator decline—ranging from banning certain pesticides to promoting wildflower corridors—directly bolster economic resilience.
Clean water is essential for industries as diverse as beverage manufacturing, textiles, and electronics. Forested watersheds and wetlands naturally filter out pollutants, regulate water flows, and maintain groundwater levels. Where natural water filtration breaks down, municipalities and corporations have no choice but to invest in expensive treatment facilities. Soil biodiversity, from earthworms to bacteria, is equally crucial. Healthy soils enable better nutrient cycling, reduce erosion, and support robust agricultural yields.
Forests, grasslands, and oceans absorb and store vast amounts of carbon dioxide, acting as sinks that slow global warming. By contributing to temperature regulation, these habitats help maintain stable agricultural conditions and mitigate weather extremes. In regions where forests have been massively cleared, local climates grow more erratic, resulting in crop failures and infrastructure damage. Over time, these changes can destabilize entire economies.
Rampant deforestation, wetland drainage, and coral reef damage lead the way in biodiversity loss. When landscapes are cleared or fragmented, species lose their habitats and can no longer carry out roles critical to ecosystem health. Large mammals often require expansive areas to forage and breed, while smaller species may be highly specialized in their habitat needs. As habitats shrink, so does the functionality of nature’s services.
Rising temperatures, erratic rainfall patterns, and more intense storms wreak havoc on biodiversity. Warmer oceans cause coral bleaching, while shifting precipitation patterns can turn once-fertile farmland into drought-stricken areas. The reverberations of climate change also threaten freshwater supplies, intensifying conflicts over resources.
Overuse of chemical pesticides and fertilizers degrades soil and water quality, killing beneficial insects and aquatic life. Pollution from plastics, heavy metals, and other industrial waste streams has reached nearly every corner of the planet, from remote mountain lakes to ocean trenches. Meanwhile, overexploitation—overfishing, illegal wildlife trade, and unsustainable logging—pushes many species to the brink of extinction, further weakening ecological networks.
Efforts to protect biodiversity often meet resistance from those who see it as anti-development or too expensive. However, various studies, including those cited in National Geographic, highlight that investing in protected areas can yield economic returns several times greater than the implementation costs. For example, safeguarding a forest not only secures habitats for wildlife but also sustains reliable water resources, boosts ecotourism, and preserves timber for future harvests.
On a macroeconomic scale, stable ecosystems buffer nations against volatile commodity prices and resource shortages. Fisheries, for instance, thrive when marine protected areas allow fish stocks to recover, ensuring steady catches and greater profitability over the long run. Coastal habitats like mangroves protect shorelines from storm surges and erosion, saving billions of pounds in disaster repairs. By preventing biodiversity loss, societies can avoid sudden price spikes in commodities, reduce healthcare costs associated with pollution, and maintain consistent energy flows from hydropower and other sources.
Governments wield considerable power through policies like the establishment of protected areas, subsidies for sustainable farming, and stricter emissions regulations. Effective legislation can rein in deforestation, incentivize corporate transparency, and enforce the responsible use of pesticides or fishing practices. Taxes or fees on activities that degrade natural capital—such as carbon pricing—also encourage industries to adopt greener approaches. By shifting the cost of environmental damage from the public to the polluters, governments foster innovation and more eco-conscious investments.
The private sector has a massive role to play, given that many corporations depend directly on natural resources. In response, a growing number of businesses are integrating biodiversity assessments into their operational and investment decisions. This shift is driven by consumer demand for ethical products, investor pressure on environmental responsibility, and new regulations that require disclosures on nature-related risks. Initiatives like the Taskforce on Nature-related Financial Disclosures (TNFD) guide firms to evaluate and report their environmental impact. Transparent communication of such risks helps align market incentives with ecological stewardship.
Satellite imagery, artificial intelligence, and blockchain-based traceability tools allow more precise monitoring of ecosystems, resource consumption, and supply chain impacts. Farmers now use precision agriculture to minimize water and pesticide use, while drone-based surveys monitor forest health or mangrove restoration projects. Meanwhile, biodegradable materials and circular economy principles offer alternatives to wasteful production systems. These innovations, widely covered in resources like refinq’s blog, can tip the scale in favor of preserving biodiversity when adopted at scale.
Addressing biodiversity loss requires an integrated strategy that coordinates efforts across all levels of society, from local communities to multinational corporations. Indigenous peoples, for instance, often have deep-rooted knowledge about sustainable land management passed down through generations. By involving them in conservation initiatives, governments and NGOs can tap into practices that have nurtured ecosystems for centuries. In urban environments, green infrastructure—such as parks, urban forests, and rooftop gardens—helps sustain pollinators while cooling city microclimates. Meanwhile, global financial institutions are now exploring “green bonds” or “blue bonds” to fund projects that protect marine ecosystems. These examples underscore the importance of a multi-stakeholder approach, ensuring everyone has a seat at the table when shaping biodiversity strategies.
Many investors and policymakers learned tough lessons from the global financial crisis, realizing that ignoring systemic risks can lead to catastrophic outcomes. Biodiversity loss poses a similar threat. When vital pollinators disappear or coral reefs vanish, the ripple effects span multiple industries. Reduced agricultural output affects food security, increasing the likelihood of social unrest. Collapsing fish stocks can devastate coastal economies, adding pressure to social welfare systems. Furthermore, resource scarcity drives up commodity prices, contributing to inflationary pressures and job losses in vulnerable regions.
Insurance firms also stand on the front lines. As natural buffers like wetlands and reefs degrade, properties and infrastructure become more vulnerable to floods, hurricanes, and other catastrophes. Higher claim payouts inevitably lead to rising insurance premiums, or in some cases, the withdrawal of coverage from high-risk zones. Banks that finance businesses reliant on natural resources or regions prone to environmental disaster can face higher rates of default. These interconnected financial shocks emphasize that biodiversity risk isn’t hypothetical; it can shake the foundations of global markets if left unaddressed.
While multinational corporations attract the spotlight, local communities and small businesses also experience profound consequences from biodiversity decline. Farmers in biodiversity-rich areas might see lower yields if pollinator populations crash. Fishing cooperatives can struggle with collapsing fish stocks, often resorting to illegal practices for survival. In turn, entire communities risk losing cultural traditions tied to local landscapes. Economic diversity suffers, pushing families into poverty and sometimes forcing them to migrate.
Yet, local communities often offer some of the most innovative solutions. Agroforestry, which blends trees and crops, simultaneously improves soil fertility, preserves habitats for wildlife, and stabilizes local microclimates. Community-led ecotourism initiatives focus on the careful stewardship of wildlife, turning biodiversity into a revenue stream that incentivizes preservation rather than exploitation. These bottom-up approaches not only sustain biodiversity but also enhance community well-being, making them integral to any comprehensive solution.
Mainstream finance is waking up to biodiversity risks. For years, environmental considerations were relegated to corporate social responsibility (CSR) sections in annual reports. Now, global banks and asset managers increasingly view nature-related risks as financially material. Some institutions tie interest rates on loans to sustainability metrics, rewarding businesses that adopt sustainable practices. Others invest in biodiversity-themed bonds, funneling capital toward conservation projects.
Major indices and rating agencies also incorporate environmental indicators when evaluating a company’s overall performance. This paradigm shift means that firms ignoring biodiversity loss may face steeper borrowing costs, investor divestment, or lower stock valuations. Platforms like refinq and specialized consulting groups focus on providing data-rich analyses, enabling companies and financiers to make informed decisions that integrate nature into their risk calculations.
Despite the dire stakes, the business case for proactive biodiversity protection is powerful. Companies benefit in various ways:
As businesses, investors, and policymakers become increasingly concerned about the financial repercussions of biodiversity loss, platforms like refinq are emerging to bridge the knowledge gap. refinq is a pioneering SaaS platform that helps enterprises manage environmental risks with advanced climate and biodiversity risk assessments. By processing over 2.5 billion data points—from earth observation imagery to climate projections—refinq generates in-depth insights on how changing environmental factors may affect physical assets around the world. It translates complex analytics into clear, actionable intelligence, empowering organizations to identify high-risk areas, craft mitigation strategies, and adhere to international disclosure frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD) and the Corporate Sustainability Reporting Standard (CSRD).
refinq’s utility becomes particularly evident in sectors reliant on natural resources, from agriculture and fisheries to financial services. The platform can forecast the implications of multiple climate scenarios up to the year 2100, enabling companies to plan decades ahead rather than merely react to immediate threats. Through real-time risk evaluations and scenario planning, refinq supports due diligence efforts for investors, improves portfolio impact assessments, and aids in calculating ecological footprints. This level of detail—zooming down to 25-meter granularity—offers unprecedented clarity for pinpointing vulnerabilities and prioritizing effective, nature-positive actions. Ultimately, this data-driven approach enables businesses to align financial viability with ecological integrity, reducing exposure to nature-related risks while fostering sustainable growth.
The world stands on the brink of a global economic dilemma, where losing biodiversity could jeopardize an estimated £125 trillion of value. Ecosystems are the living infrastructure that sustains markets and societies, from the pollinators fertilizing our crops to the forests regulating our water supplies. Eroding this natural capital intensifies resource conflicts, disrupts supply chains, and escalates costs for both businesses and communities. Yet, the crisis also sparks a unique opportunity to rethink how we value and protect natural resources. Through stronger policies, technological innovations, local empowerment, and responsible corporate engagement, we can safeguard these irreplaceable services. When financial institutions and industry leaders recognize biodiversity as integral to their risk management strategies and long-term profitability, transformative change becomes possible. The solutions are complex and multifaceted, but the cost of inaction dwarfs the price of implementing them. The time to act is now, ensuring that the global economy, estimated at tens of trillions of pounds, remains robust by preserving the intricate tapestry of life upon which it rests.