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Nature's Collapse Costs Billions: Are You Prepared?
21 Apr
Summary
- Ecosystem destruction poses a material financial risk costing $430 billion yearly.
- Fewer than 10% of companies assess their dependence on nature.
- Non-forest areas converted for crops grew nearly four times faster than forests.
The rapid decline of natural ecosystems presents a significant financial risk to global supply chains, costing industries an estimated $430 billion per year. Despite this, most companies remain unaware, with fewer than 10% assessing their dependence on nature.
The conversion of non-forest ecosystems like grasslands, savannas, and wetlands for crops and livestock pasture has significantly accelerated. Between 2005 and 2020, this conversion occurred at a rate nearly four times that of forest loss for similar purposes.
Such ecosystem degradation releases carbon, exacerbates climate change, and disrupts agricultural supply chains, threatening food security. These natural systems also provide essential services like pollination and water filtration.
Companies can mitigate these risks by integrating ecosystem conversion into their assessments, engaging with suppliers to adopt sustainable practices, and collaborating with governments and local stakeholders on alternative land-use strategies.
Actions like the Responsible Commodities Facility, offering loans to soy farmers who commit to avoiding Cerrado deforestation, demonstrate a path forward. Ultimately, investing in ecosystem protection now is far less costly than facing the consequences of their loss.
