Nurturing Nature: Why Investors Should Care About Biodiversity

Investors face an urgent challenge in understanding, analyzing and managing biodiversity risks.

From South Africa’s endangered black rhinoceros to the shrinking Amazon rainforest, threats to the variability of life on Earth are mounting. Protecting biodiversity—animals, plants and other living organisms, and the ecosystems they are part of—is vital to maintaining the health of our planet and the products, services and economic activity that sustain our daily life. Yet until recently, biodiversity hasn’t ranked highly among investors’ priorities.

This may seem surprising, given biodiversity’s importance as the living component of the natural world. Together with abiotic resources—the nonliving components of the natural world, such as land, water, air and minerals—biodiversity comprises natural capital, the world’s stock of natural assets.

Natural capital provides the building blocks that enable ecosystem services—the positive benefits that societies and economies derive from nature—to sustain life and create wealth. That’s why biodiversity loss alone could cost the global economy trillions of dollars in the coming years, in addition to trillions more related to climate change.

Biodiversity is, quite simply, the world’s life support system, the foundation from which nearly all goods and services are produced.