Biodiversity loss isn’t just an environmental issue, it’s a financial risk that investors should integrate into their decision-making, writes Robert-Alexandre Poujade,ESG Analyst and Biodiversity Lead.
Investors should think about their investments in the context of the Earth system as awareness among governments and businesses of the potential economic implications of biodiversity loss grows. The issues include forest dieback – with the Amazon as a textbook example – savanna and dryland degradation, lake eutrophication, die-off of coral reefs, mangroves and seagrass meadows, and fishery collapse.
As a point in case, a recent World Bank study found that, in a worst-case scenario of partial ecosystem collapse, Malaysia could experience a 6% annual loss on economic growth by 2030 compared to a baseline scenario. Indeed, the effects on climate change are likely to be widespread: we know, for example, that changing rain patterns affect the availability of water for humans, agriculture and hydroelectricity.
