Biodiversity: From blind spot to strategic priority
- By Fabien Chene
- 05 Dec 2025
- 6 min read
“While climate has dominated corporate sustainability strategies, nature is now demanding attention, and the path from risk awareness to strategic action requires fundamental shifts in how we assess and value nature.”
- Fabien Chene, Head of SE Advisory Services Europe
Biodiversity is a cornerstone of global economic activity, underpinning everything from food production and water supply to climate regulation and disease control.
Yet, the alarming rate of biodiversity decline – with species extinctions now occurring 10 to 100 times faster than the natural baseline according to IPBES. Seven of the nine ‘planetary boundaries’, that define Earth’s safe operating space for humanity, have already been breached. Driven by land-use change, climate change, and overexploitation, this loss presents significant risks to business operations and financial systems.
Awareness of these risks is growing among companies and financial institutions, yet the degradation of ecosystem services continues. Businesses must move from understanding risks to actively integrating biodiversity into strategy, addressing dependencies and impacts while uncovering opportunities for long-term value creation.
The consequences of biodiversity degradation are tangible and directly impact operations across sectors such as agriculture, forestry, pharmaceuticals, insurance, real estate, manufacturing, and tourism. Supply chain disruptions, asset devaluation, and operational vulnerabilities are no longer distant threats: they are realities businesses face today.
Moreover, the interconnection between biodiversity loss and climate change exacerbates risks. Degraded ecosystems sequester less carbon, fueling climate instability and amplifying extreme weather events. This dynamic compounds economic disruptions and erodes financial assets. To protect resilience, businesses must act decisively to mitigate these interconnected challenges.
Over half of global GDP – approximately US$44 trillion – depends directly on nature, making biodiversity vital to global economic stability. The erosion of natural capital represents systemic risks for the economy and financial markets. For example, ecosystem degradation increases insurance claims linked to natural disasters, diminishes agricultural productivity, and reduces real estate value in vulnerable areas.
The World Bank estimates that annual global GDP losses tied to biodiversity decline could reach US$2.7 trillion by 2030. Simultaneously, the biodiversity financing gap has widened to US$942 billion, with current financial flows falling significantly short of the US$1.15 trillion needed to halt ecosystem collapse and restore biodiversity by 2030.
Private sector investments for nature have grown, increasing elevenfold between 2020 and 2024. Yet this still represents only 17% of total biodiversity-related financial flows, with public sources continuing to carry most of the weight through mechanisms like overseas development assistance and debt-for-nature swaps. Both public and private funding must scale further to address the gap and enable a nature-positive transition that secures global financial stability.
Integrating biodiversity considerations into investment decisions allows businesses and financial institutions to not only mitigate risks but also capitalize on growth opportunities. Sectors such as regenerative agriculture, sustainable tourism, and the bioeconomy are opening new avenues for investment. Meanwhile, companies are increasingly turning to nature-based solutions within voluntary carbon markets to deliver climate and biodiversity benefits simultaneously.
Businesses have access to evolving financial tools tailored to biodiversity outcomes, including:
- Biodiversity-linked loans offering preferential terms based on ecosystem performance metrics.
- Nature-positive bonds channeling capital toward restoration and conservation projects.
- Nature-based solution credits integrating biodiversity and community co-benefits beyond carbon, offering premium pricing for verified ecosystem outcomes.
- Standalone biodiversity credits representing a distinct asset class for direct conservation investment independent of carbon metrics.
These tools represent a growing investment market that supports businesses in achieving sustainability goals while accessing competitive advantages.
Despite promising developments, several structural challenges hinder progress.
Biodiversity finance is often perceived as yielding lower financial returns and higher uncertainties compared to other asset classes. Short-term priorities in financial systems conflict with the long-term planning required for biodiversity restoration. Additionally, small-scale, localized biodiversity projects make it challenging for large-scale financiers to achieve aggregation and scalability.
Harmful subsidies, totaling US$500 billion annually, continue to channel resources toward ecosystem degradation, eclipsing conservation funding and stalling progress.
And the lack of standardized data, metrics, and measurement further complicates investment decision-making. Without reliable indicators, it is difficult to ensure investments deliver meaningful ecological benefits.
Just as "net zero by 2050" provides a clear target for climate finance, biodiversity needs an equally compelling framework to guide capital allocation.
To drive biodiversity finance forward, policymakers and institutions must collaborate to establish compelling frameworks that align incentives, provide measurement tools, and harmonize efforts at local and global levels.
We call on policymakers to prioritize actions that strengthen biodiversity’s role in economic decision-making. These include:
Mandating biodiversity disclosure in alignment with global frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD).
Reforming harmful subsidies and redirecting US$500 billion annually toward nature-positive incentives.
Establishing standardized data frameworks for biodiversity measurement to facilitate reliable investment assessments.
Aligning national policies with the Kunming-Montreal Global Biodiversity Framework (GBF) targets to drive global coherence.
Financial institutions must also take the lead in integrating biodiversity into investment and risk management strategies. Key steps include:
Mapping biodiversity dependencies, impacts, and risks across portfolios.
Setting science-based targets such as no net loss by 2030, net gain thereafter, and full recovery by 2050.
Designing innovative financial products such as sustainability-linked loans tied to biodiversity KPIs, green bonds focused on ecosystem restoration, and blended finance solutions to drive scalable impact.
Collaborating with portfolio companies, especially in high-impact sectors like agriculture, forestry, and extractives, to align business operations with biodiversity outcomes.
Incorporating local stakeholder input into biodiversity initiatives, an essential to ensure equitable and effective outcomes.
As businesses transition toward nature-positive strategies, those that act swiftly to integrate biodiversity considerations across operations will gain a competitive edge. This approach not only mitigates risks but fosters innovation, opens new investment markets, and ensures long-term resilience.
To succeed in this new landscape, now is the time to move beyond risk awareness and take immediate steps to integrate biodiversity into corporate strategies. By doing so, we can collectively address the challenges of biodiversity loss and create shared value for the economy, society, and nature.
The report “Financing and Investment Horizons in Biodiversity 2025”, developed by Spainsif and SE Advisory Services, offers actionable insights and financial tools to help businesses build strategies that protect natural capital while capturing significant investment opportunities. It offers a deep dive into key financial instruments for biodiversity, shares a multi-stakeholder perspective on how to scale biodiversity finance, and draws from our case study with a leading manufacturing company to develop a custom biodiversity indicator for industrial site monitoring.
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