This report is co-authored with the World Economic Forum. 

The message to chief executives and financial institutions is clear: Our natural capital is being systematically depleted and destroyed. And investment moving forward must focus on projects that not only preserve it but help to reverse losses to date.

The global economy is intricately intertwined with nature. More than half of the global economy is moderately to highly dependent on nature and its natural capital — from the key role played by pollinators in agriculture to the need for fresh water by the beverage, chemicals, apparel, and steel industries. And the current squandering of Earth’s bounty will eventually undermine its growth.

Here, we have prepared a briefing paper for the world’s top financial institutions and executives that outlines economic imperatives for the next quarter-century if business and banking are to reverse the damage to nature and prevent this kind of disruption.

The intersection of climate and nature

While cutting global greenhouse gas emissions is crucial to prevent the world’s average temperature from rising much more than 1.5 degrees above preindustrial levels, the new recognition is that climate change and nature loss need to be tackled together if either effort is to be successful. In 2022, 196 nations agreed to halt and reverse nature loss with the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF). But just as it is with emissions reduction, not enough is happening to prevent further deterioration.

Biodiversity loss is seen as the third biggest global economic risk over the next 10 years. Wildlife populations have shrunk 69% on average over the past 50 years, and three-quarters of the land surface on earth has been severely altered by the impacts of human activity.

The effort to save nature goes beyond risk management. It also represents great opportunity for business and finance. World Economic Forum research indicates that the global economy could realize more than US$10 trillion per year worth of new business opportunities and create 395 million new jobs by 2030 with an annual investment of US$2.7 trillion in 15 systemic transitions.

This is a call to action to financial institutions and top executives to recognize the mounting risk from nature loss and take advantage of the potential for sustainable growth offered by a climate- and nature-positive transformation of business as usual. There is literally no time to lose.

Next steps — prioritizing a nature-positive transition for 2024 and beyond

More jurisdictions are recognizing the need for regulation to protect nature. But none of the efforts is happening fast enough, and none is substantial enough to reverse the damage.

In our engagement with major financial institutions on the state of nature, we identified three key barriers blocking more aggressive actions to protect nature. They are the lack of data availability on corporate disclosures, the limited pool of resources, skills, and expertise, and the difficulty making a clear business case for investment in nature. Even so, financial institutions are already embedding nature-related questions into climate risk assessment procedures and requesting nature-related data from corporate customers to assess their nature performance against standardized data disclosed through CDP questionnaires.

For 2024 and 2025, the World Economic Forum has identified two immediate priority areas. These are the development of a nature transition plan assessment framework for financial institutions and collaboration between public finance and industry to create new financing mechanisms to support nature-positive business models.

Over the next year, our aim, along with the World Economic Forum, is to develop a nature transition assessment framework for financial institutions to provide a pathway to a nature-positive transition.