Many businesses take nature for granted, but their operations depend heavily on it. Healthy ecosystems act like a natural infrastructure network—they clean water, keep soil fertile, and protect buildings from floods and extreme weather. When companies damage these natural systems, they risk disrupting their own supply chains, causing raw material shortages, and driving up operating costs.

This article explains biodiversity (the variety of life on Earth)—and shows how it directly connects to corporate risk management. We will look at how natural systems keep themselves stable and why that stability matters to the business world.

What you will learn in this article

• ✅International frameworks & definitions for biodiversity

• ✅ The three levels of biodiversity and how they work together to keep nature stable.

• ✅ How nature protects itself from systemic collapse by having multiple species perform the same vital jobs, like pollination or water filtration.

• ✅ The 5 direct drivers of nature loss and how commercial activities intersect with the core threats to global ecosystems.

• ✅ How to view biodiversity as a form of natural capital

By the end of this article, you will understand how nature supports business, helping you better see, measure, and manage environmental risks in your own industry.

2. What is biodiversity?

Biological diversity—or biodiversity—refers to the entire variety of life on Earth, from individual genetic sequences and species variety up to complex ecosystem structures. It provides the functional infrastructure that allows natural systems to deliver essential contributions, maintain regional climate stability, and support global supply chains.

To evaluate these systems accurately, ecology organizes nature into different scales of observation:

Understanding these building blocks is important because corporate operations and supply chains rarely interact with a single species in isolation. They rely on and impact entire ecological communities and ecosystems.

3. International frameworks and standard definitions

To build a grounded strategy around nature, decision-makers must understand how biodiversity is defined globally. The foundational legal definition was established under the United Nations Convention on Biological Diversity (CBD) during the 1992 Earth Summit.

The CBD defines biological diversity as the variability among living organisms from all sources—including terrestrial, marine, and freshwater ecosystems, as well as the ecological complexes of which they are a part. This definition explicitly spans three interconnected levels:

Historically, international policy focused on isolated targets, such as single endangered species or specific wetlands. The CBD shifted this approach toward managing nature as a connected whole through three core objectives:

1. Conservation of biological diversity.

2. Sustainable use of its components.

3. Fair and equitable sharing of benefits arising from genetic resources.

To achieve these goals, managers divide practices into in-situ conservation (protecting species within their natural habitats) and ex-situ conservation (preserving components in places like seed banks or zoos).

These policies are reinforced globally by modern initiatives:

• Kunming–Montreal Global Biodiversity Framework: Sets global goals to halt and reverse nature loss by 2030.
  

• IPBES (Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services): Provides scientific assessments outlining how corporate activity and human development drive nature loss, while showing how businesses depend directly on multi-tiered biological systems.

4. The three levels of biological diversity

Biological variation is analyzed across three distinct structural levels. These levels do not exist in isolation. They interact continuously through feedback loops.

Genetic diversity

Genetic diversity forms the foundational layer. It represents the heritable variation in DNA sequences within and between populations of a species. This variation provides the raw material for natural selection, enabling species to adapt to changing temperatures, emerging diseases, or shifting rainfall patterns. High genetic diversity acts as a buffer against population decline, whereas severe losses in genetic variation reduce resilience.

Species diversity

Species diversity reflects the variety of distinct species within a given region. It serves as the primary currency used in conservation planning. Crucially, species diversity accounts for both species richness (the total number of species present) and species evenness (the relative abundance and numerical balance of those species). Beyond basic counts, this scale includes phylogenetic diversity, which measures the total evolutionary history and unique branches represented within an ecological community.

Ecosystem diversity

Ecosystem diversity encompasses the structural variety of physical habitats and biomes—from local wetlands and temperate forests to tropical reefs. It captures how plant, animal, and microbial communities interact with their non-living physical environment as a functional unit.

Cross-scale feedbacks

When human actions disrupt one scale, the effects cascade through the others. For example, fragmenting a forest (ecosystem scale) restricts animal movement, leading to isolated populations. This reduces genetic mixing (genetic scale), which weakens population resilience and can trigger local extinctions (species scale).

5. How ecological mechanics support systemic stability

Natural ecosystems depend on biological diversity—the variety of life across all levels—to maintain productivity, health, and stability against environmental disruptions. This resilience is driven by three foundational ecological mechanisms.

1. Niche differentiation: optimizing resource use

Within any habitat, different species develop distinct strategies for acquiring nutrients, water, and sunlight to minimize direct competition. This behavior is known as niche differentiation.

Instead of competing for the same resources at the same time, species partition their environment:

• In practice: In a diverse forest or grassland, one plant species may have shallow roots to absorb surface rainfall, while an adjacent species develops deep taproots to access groundwater. Similarly, different animals may hunt or forage at different times of day or at different canopy heights.

Because the species utilize different parts of the environment, the community as a whole processes available light, water, and nutrients far more efficiently than a single-species monoculture could alone.

2. Functional redundancy and the insurance hypothesis

Ecosystems rely on critical processes to remain viable, including plant pollination, water filtration, and nutrient cycling in soil. Functional redundancy occurs when multiple distinct species perform similar ecological roles within the same system.

This overlap forms the basis of the insurance hypothesis, which views biodiversity as a safeguard against environmental volatility:

• In practice: If a habitat relies on only one insect species for pollination, a targeted disease or extreme weather event could wipe out that insect and collapse the plant population. However, if the ecosystem features several distinct pollinator species, those with higher tolerance levels will survive and maintain the pollination process.

This redundancy ensures that the loss of a single species does not result in a systemic failure of the entire ecosystem.

3. Trophic cascades and food web regulation

Ecosystems are structurally bound by food webs that dictate how energy moves upward from primary producers (plants) to apex predators (animals at the top of the food chain). A trophic cascade is a powerful chain reaction triggered by the addition or removal of these top predators, which alters the balance of the entire system.

When top predators are removed, the lack of population control creates a downward ripple effect through the food web:

• In practice: In North Pacific marine environments, sea otters prey on sea urchins, which feed on kelp (underwater algae forests). When sea otters are present, they keep the urchin population in check, allowing kelp forests to thrive and provide habitats for hundreds of other species. If sea otters are removed, the urchin population expands rapidly, overgrazing the kelp and reducing a rich ecosystem to a barren underwater desert.

Maintaining top-down regulation is therefore essential to preventing population explosions at lower levels that can degrade foundational habitats.

Example
When functional redundancy is low or absent, losing a key biological group leads to functional extinction. This is a state where a population becomes so severely depleted that it can no longer fulfill its critical ecological role within the ecosystem.

The scavenger collapse: The severe real-world consequences of functional extinction and top-down trophic disruption were observed when widespread veterinary drug use caused a drastic collapse in vulture populations across the Indian subcontinent.

Because vultures functioned as nature’s highly efficient primary scavengers, their absence left an enormous ecological role unfulfilled. Rotting livestock carcasses accumulated in the open, triggering a severe environmental sanitation shock. This abundance of carrion fueled a rapid population explosion of feral dogs. The resulting surge in dog-human interactions led to a massive spike in rabies transmission and severely compromised local water safety due to pathogen runoff.

This functional extinction ultimately triggered devastating public health crises and massive economic costs. Proving that losing a single ecological functional group can cause cascading disruptions that compromise broad human and enterprise systems.

6. Global status and drivers of nature loss

Synthesized global data highlights rapid, ongoing changes across natural systems. According to IPBES findings, approximately 1 million species face extinction within the coming decades under current trends, while key natural contributions continue to decline.

Corporate supply chains and economic activities intersect with the five direct drivers of nature loss defined by IPBES:

• Land-Use Change: Transforming natural areas for agriculture, real estate, and infrastructure remains the leading driver of land degradation.

• Overexploitation: Harvesting biological resources faster than they can naturally regenerate weakens marine fisheries and timber stocks.

• Pollution: Industrial waste, agricultural fertilizer runoff, and plastic accumulation create dead zones and degrade water resources.

• Climate Change: Thermal stress, shifting weather patterns, and ocean acidification compound existing pressures.

• Invasive Species: Global transport networks inadvertently spread non-native organisms that outcompete local flora and fauna, causing significant economic and environmental harm.

7. Enterprise risk and management implications

For forward-thinking organizations, nature loss is a material business risk. Ecosystem degradation creates real-world operational disruptions, supply chain volatility, regulatory pressures under frameworks like the CSRD, and physical threats to infrastructure.

To navigate these challenges, companies are deploying structured approaches to assess and address their impacts:

By addressing the core drivers of nature loss, companies can protect vital natural capital, build long-term operational resilience, and secure their license to operate.

8. Bottom line: Managing nature like a financial asset

To fully integrate biodiversity into corporate strategy, business leaders must look beyond immediate operational risks and understand how nature creates value. The multiple uses and values of biological diversity can be broken down into several categories.

1. Consumptive use value

This value comes from biological products that are harvested and consumed directly, such as food, fuel, clothing fibers, and medicines. For instance, the world’s population relies directly on plants or plant extracts for medicine.

Famous examples include:

• Penicillin: A world-changing antibiotic derived from the Penicillium fungus.

• Tetracycline: A widely used antibiotic sourced from a bacterium.

• Quinine: A historical cure for malaria obtained from the bark of the Cinchona tree.

• Cancer treatments: Vital anti-cancer drugs like vinblastine and vincristine derived from the Catharanthus plant.

Additionally, our global energy baselines rely on fossilized biodiversity; coal, petroleum, and natural gas are all the products of ancient, fossilized life forms.

2. Productive use value

Productive use refers to biological products that are harvested commercially and traded in global markets. Entire commercial sectors are completely dependent on these productive values. Examples include silk from silkworms, wool from sheep, and lac from lac insects. Major industries—such as paper and pulp, plywood, textiles, leather, and commercial pearl production—rely entirely on these natural outputs to create marketable goods.

3. Aesthetic value

Nature holds immense visual and recreational value. People regularly spend significant amounts of time and money to visit wilderness areas, national parks, and oceans just to experience the beauty of undisturbed wildlife. This aesthetic value fuels a massive global eco-tourism industry, providing major economic returns for hospitality, travel, and regional economies.

4. Ecosystem service value

This category covers the “invisible” work that ecosystems do to maintain themselves and keep the planet habitable. These non-consumptive services include:

• Preventing soil erosion and catastrophic floods.

• Maintaining soil fertility and cycling vital nutrients like nitrogen.

• Absorbing environmental pollutants and regulating water cycles.

• Reducing the threat of global warming by storing carbon

Biodiversity is a foundational asset class that directly protects a company’s financial balance sheet. By viewing genetic variety, species backups, and healthy ecosystems as forms of natural capital, business leaders can measure their true operational risks. Protecting nature is simply good business. It is a practical strategy designed to secure your raw materials, protect your buildings, and keep your business running smoothly.

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Relevant Sources

Indicators for Monitoring Biodiversity: A Hierarchical Approach

Biodiversity: Its Different Levels and Values

Biodiversity: Concepts, Patterns, Trends, and Perspectives | Annual Reviews

Biotic impoverishmentBiotic impoverishment | Elementa: Science of the Anthropocene | University of California Press

Eco‐Evolutionary Dynamics of Generalist and Specialist Pollinators Facing Plant Diversity Changes - PMC

The Functions of Biological Diversity in an Age of Extinction

What is Biodiversity? - Perspectives on Biodiversity - NCBI Bookshelf

Biodiversity: An Introduction - Kevin J. Gaston, John I. Spicer - Google Boeken

5 key drivers of the nature crisis

The global assessment report on BIODIVERSITY AND ECOSYSTEM SERVICES SUMMARY FOR POLICYMAKER

The Social Costs of Keystone Species Collapse: Evidence from the Decline of Vultures in India

Biodiversity loss is no longer an abstract environmental concern. For companies across all sectors, it presents tangible risks and strategic implications. Ecosystem degradation can disrupt supply chains, devalue assets, increase regulatory burdens, and erode public trust. As global policy and investor pressure rise, businesses are expected not only to avoid harming biodiversity—but to actively help restore it.

Managing biodiversity strategically requires clarity, data, and structure. That’s where emerging frameworks and tools come in. These systems help companies locate where they interact with nature, evaluate risks and impacts, set measurable targets, and report transparently on progress. They transform biodiversity from a vague sustainability topic into a manageable part of enterprise decision-making.

This topic intersects directly with global frameworks such as:

• The Corporate Sustainability Reporting Directive (CSRD), which mandates biodiversity disclosures (ESRS E4)

• The Kunming–Montreal Global Biodiversity Framework, which sets a global goal to halt and reverse biodiversity loss by 2030.

By reading this article, you will learn:
✅ How four key biodiversity tools (TNFD, SBTN, ENCORE, IBAT) help companies operationalize nature goals
✅ Which sectors use each tool and why
✅ The practical challenges and limitations to expect
✅ Additional tools that fill niche roles in a biodiversity strategy

This article will help you understand how to incorporate biodiversity tools into your company’s sustainability journey, regardless of your industry or current level of maturity.

2. What biodiversity tools are designed to do

Biodiversity tools can be grouped into three practical categories. This makes it easier to understand how they work together.

1. Risk and impact identification tools

These tools help you locate where your business interacts with nature, through operations, supply chains, or financing. They highlight where you depend on ecosystem services (like water and soil) and where your activities may put pressure on ecosystems.

2. Target-setting tools

These translate important pressures and dependencies into measurable, science-aligned goals.

3. Disclosure and governance frameworks

These guide how companies report nature-related risks, opportunities, and governance to investors and regulators.

The four most widely used tools — TNFD, SBTN, ENCORE, and IBAT — span these categories. In practice, companies often use them together. Let’s explore each one.

3. TNFD: framing biodiversity as financial risk

Purpose

The Taskforce on Nature-related Financial Disclosures (TNFD) helps companies and financial institutions identify, assess, manage, and disclose nature-related risks and opportunities. It aims to bring biodiversity into core business and financial decision-making.

Structure

TNFD uses four pillars that mirror the well-known TCFD climate framework*:

1. Governance

2. Strategy

3. Risk and impact management

4. Metrics and targets

This makes TNFD familiar territory for teams already working on climate disclosures.

*Read about the TCFD here:

The LEAP process

TNFD is operationalised through the LEAP approach, a four-step sequence:

1. Locate where your company interacts with nature (sites, sourcing regions, portfolio exposure).

2. Evaluate your dependencies and impacts at those locations.

3. Assess which issues create material risks or opportunities.

4. Prepare by integrating findings into governance, strategy, processes, and disclosures.

Typical use cases

• Manufacturers and extractive companies use TNFD to map where their operations touch high-risk nature areas.

• Banks and investors apply LEAP across portfolios to spot nature-related financial risk.

• Companies use TNFD to turn fragmented data into a consistent governance and reporting structure.

Challenges

• Requires detailed spatial and supply chain information.

• Boundaries for biodiversity assessments are more complex than for greenhouse gas emissions.

• TNFD is a framework — not a dataset — so companies must combine it with other tools.

Check it out here: The Taskforce on Nature-related Financial Disclosures

4. SBTN: turning ambition into science-based targets for nature

Purpose

The Science Based Targets Network (SBTN) helps companies set measurable, science-aligned targets for nature. It extends the idea of science-based targets from climate into broader environmental domains.

Focus areas

SBTN covers several realms, with land and freshwater being the most advanced:

• Freshwater

• Land and ecosystem conversion

• Pollution

• Climate (through SBTi)

• Biodiversity and ocean (guidance expanding in phases)

The target-setting process

SBTN follows a clear, stepwise method:

1. Assess—map pressures and dependencies across your value chain.

2. Interpret and prioritise—identify where the most significant issues lie.

3. Measure, set, and disclose—create baselines and define science-aligned targets.

4. Act—implement actions across operations and suppliers.

5. Track—monitor progress and adjust when needed.

Typical use cases

• Food and beverage companies use SBTN to set no-conversion and regenerative sourcing commitments.

• Consumer goods companies apply SBTN guidance to manage freshwater risks in high-stress basins.

• Companies integrate SBTN targets into procurement policies and supplier requirements.

Challenges

• Biodiversity-specific methods are still expanding.

• Requires strong internal data on sourcing locations.

• Needs alignment with other commitments (e.g. deforestation, climate, water stewardship).

Check it out here: Step Up For Nature – Science Based Targets Network

5. ENCORE: understanding nature dependencies across sectors

Purpose

ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) helps organisations understand how economic activities depend on and impact ecosystem services.

What ENCORE provides

• A sector-to-ecosystem-service matrix that shows which ecosystem services are most critical to each activity.

• Materiality ratings (e.g., high, medium, low) indicating dependency strength.

• Insights into how degradation of ecosystem services could disrupt activities.

Typical outputs

ENCORE produces clear visual results, such as:

• A matrix showing how an industry depends on pollination, soil formation, water flow, or other ecosystem functions.

• Portfolio-level overviews for financial institutions, showing which sectors carry the highest nature-exposure risk.

Use cases

• Banks use ENCORE to screen portfolios for sectors with high nature exposure.

• Corporate sustainability teams use it as a first step in double materiality assessments.

• Companies use ENCORE to prioritise where deeper analysis is needed.

Challenges

• ENCORE provides sector-level insights, not site-specific data.

• It highlights dependencies strongly; understanding full impacts usually requires additional tools.

• It identifies risk, but does not quantify financial outcomes.

Check it out here: ENCORE

6. IBAT: mapping biodiversity risk on the ground

Purpose

The Integrated Biodiversity Assessment Tool (IBAT) provides detailed, site-level information about biodiversity sensitivity.

Key data layers

IBAT combines several globally recognised datasets:

• Protected areas (WDPA)

• Key Biodiversity Areas (KBAs)

• IUCN Red List species ranges

• Ecosystem types

What IBAT produces

• Site screening reports showing overlaps with protected areas, threatened species ranges, and high-value ecosystems.

• Maps and summaries useful in due diligence, land-use planning, and sourcing decisions.

Use cases

• Mining, energy, and infrastructure companies use IBAT to screen potential project sites.

• Procurement teams use IBAT to avoid sourcing from high-biodiversity-sensitivity areas.

• Companies use IBAT to focus environmental assessments where the risks are highest.

Challenges

• Data coverage varies across regions.

• IBAT identifies sensitivity, not full ecosystem service loss.

• Additional assessments are usually required for detailed planning.

Check it out here: IBAT | Services

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7. How these tools work together: a typical biodiversity workflow

Companies that work seriously with biodiversity rarely use these tools alone. A practical sequence looks like this:

8. Other useful tools that support biodiversity integration

Beyond the main four tools, several additional resources play complementary roles:

WWF Biodiversity Risk Filter (BRF)

Type: Global risk-screening platform
Best for: Early-stage biodiversity and nature risk assessments across operations and supply chains

BRF is a map-based dashboard that screens locations around the world for biodiversity-related risks. It evaluates both ecosystem condition and human pressures, making it useful for companies seeking a quick understanding of nature-related exposure.

When to use it

• When you need a first screening to see which regions carry high nature-related risks

• When you do not yet have detailed site-level data

• When evaluating many supplier locations at once

WWF Biodiversity Risk Filter, for the maps see this page: WWF Biodiversity Risk Filter - Explore Maps

Global Biodiversity Score (GBS)

Type: Corporate biodiversity footprint method
Best for: Measuring total biodiversity pressure across a company’s value chain

GBS provides a single numerical score representing a company’s biodiversity pressure. It converts complex environmental impacts into a common biodiversity metric, helping companies compare business units, sourcing regions, or scenarios.

When to use it

• When preparing for science-based target validation

• When reporting company-wide impacts

• When needing to compare biodiversity pressure between different product categories or geographies

Global Biodiversity Score (GBS) | Measure & Act on your Biodiversity Footprint

GLOBIO

Type: Global biodiversity scenario modelling framework
Best for: Strategic foresight, long-term risk assessment, and scenario analysis

GLOBIO is a modelling system that shows how biodiversity intactness may change over time under different development pathways. It is used by governments, NGOs, and companies to understand long-term biodiversity trajectories.

When to use it

• When developing long-term nature strategies

• When performing scenario analysis for TNFD or CSRD

• When assessing exposure to future land-use or climate risks

What is GLOBIO? | GLOBIO - Global biodiversity model for policy support - homepage

BFFI (Biodiversity Footprint for Financial Institutions)

Type: Footprint model for financial portfolios
Best for: Banks, asset managers, insurers, and any organisation with investments

BFFI helps financial institutions estimate biodiversity impacts across their entire investment portfolio, from equity to loans and bonds.

When to use it

• When preparing TNFD-aligned portfolio reporting

• When identifying high-impact companies in lending or investing

• When setting portfolio-wide biodiversity strategies

Biodiversity Footprinting for Financials - Biodiversity Metrics

LandScope (regional platforms)

Type: Regional spatial planning and conservation mapping tools
Best for: Real estate, infrastructure developers, land-intensive industries

LandScope tools (e.g., LandScope America and other regional variants) integrate local biodiversity data, land-use maps, and conservation priorities. They help decision-makers quickly evaluate the ecological importance of land parcels.

When to use it

• When evaluating new project sites

• When making real estate or land acquisition decisions

• When needing high-resolution local data that ENCORE/IBAT cannot provide

LandScope | Professional Terrain Analysis. No Barriers.

9. Takeaway

Companies have a toolbox for biodiversity at their disposal consisting of:

• TNFD structures risk and disclosure

• SBTN provides science-based nature targets

• ENCORE identifies key dependencies and exposures

• IBAT screens site-level biodiversity sensitivity

• Tools like BRF, GBS, GLOBIO, and BFFI add depth where needed

Relevant Sources

The Taskforce on Nature-related Financial Disclosures

Step Up For Nature – Science Based Targets Network

ENCORE

IBAT | Services

WWF Biodiversity Risk Filter

WWF Biodiversity Risk Filter - Explore Maps

Global Biodiversity Score (GBS) | Measure & Act on your Biodiversity Footprint

What is GLOBIO? | GLOBIO - Global biodiversity model for policy support - homepage

Biodiversity Footprinting for Financials - Biodiversity Metrics

LandScope | Professional Terrain Analysis. No Barriers.

Relevant Standards

ESRS E4 July 2025

Biodiversity loss is often framed as an environmental issue, but is also a profound economic and business risk. Nature provides essential material, regulating, and non-material contributions that underpin global well-being and economic activity. Yet 14 of the 18 categories of nature’s contributions to people are declining, especially those that regulate climate, water, and ecological stability. As these systems deteriorate, companies face rising operational, financial, and strategic exposure.

Biodiversity is not a distant concept: it affects supply chains, infrastructure, raw materials, workforce stability, insurance, finance, and social license to operate. And companies, in turn, play a direct role in driving biodiversity loss through land conversion, overexploitation, pollution, climate emissions, and global transport networks that spread invasive species — all recognized by IPBES as the five direct drivers.

Understanding this two-way relationship is increasingly important for regulations such as the Corporate Sustainability Reporting Directive (CSRD) and emerging disclosure frameworks like TNFD, which expect companies to understand and report their dependencies and impacts on nature.

By reading this article, you will learn:
✅ How companies drive biodiversity loss across the five IPBES direct drivers
✅ How indirect economic drivers (subsidies, consumption, trade) amplify those pressures
✅ How biodiversity decline translates into operational, market, financial, regulatory, and reputational risks
✅ Real-world sector examples from agriculture, fisheries, forestry, construction, and mining
✅ Why feedback loops between business and ecosystems create long-term vulnerabilities

By the end, you will understand why nature is a core business issue — and why proactive companies are moving from awareness to action.

2. The business–biodiversity connection explained

Biodiversity underpins economic activity across sectors. Over half of global GDP—about $44 trillion—is moderately or highly dependent on nature (Biodiversity | OECD). Agriculture, fisheries, forestry, water-intensive manufacturing, and tourism are obvious examples. But even financial services and consumer goods are exposed through their value chains.

According to the IPBES Global Assessment (2019), nature supports human life and economies by providing:

• Material contributions, such as food, raw materials, and energy.

• Regulating contributions, such as pollination, water purification, coastal protection, and climate regulation.

• Non-material contributions, such as cultural, recreational, and spiritual benefits.

IPBES reports that most of these contributions are declining, particularly the regulating ones. These declines weaken the ecological infrastructure on which companies depend — from healthy soils and stable climates to predictable water flows and resilient coastlines.

This sets the stage for a double challenge:

1. Companies affect biodiversity, and

2. Biodiversity loss affects companies.

Key takeaway: Biodiversity loss affects every business sector—directly through resource dependency, and indirectly through disrupted supply chains, stakeholder pressure, and systemic risk. Companies that understand and manage these dependencies are better positioned for long-term success.

3. How companies drive biodiversity loss

IPBES identifies five direct drivers of biodiversity loss — all linked to human economic activity. Each one connects directly to corporate value chains.

1. Land-use change and habitat conversion

Transforming natural land and sea areas for human use is the largest driver of biodiversity loss. Companies influence this through agriculture, construction, mining, transport infrastructure, and real estate development.

Key findings from the assessment show the scale of this change:

• Over one-third of Earth’s land surface is now used for crops or livestock.

• 32 million hectares of primary or recovering tropical forests were lost between 2010 and 2015.

• Urban areas doubled in size since 1992.

• Although mining occupies <1% of global land area, it has “significant negative impacts on biodiversity” due to land clearance and toxic pollution.

Corporate sectors implicated include:

• Agriculture and livestock

• Real estate and urban development

• Road builders, ports, pipelines, railways

• Extractives and mining

The result: fragmented habitats, disappearing wetlands, and shrinking forests.

2. Overexploitation of natural resources

Extracting biological resources faster than ecosystems can regenerate them is the second-largest driver on land and freshwater, and the dominant driver in marine ecosystems.

Key findings include:

• ~33% of marine fish stocks are overfished; another ~60% are at maximum sustainable levels.

• Industrial fishing now spans at least 55% of the ocean.

• 290 million hectares of native forests were cut down between 1990 and 2015.

Companies in seafood, timber, fashion, agriculture, cosmetics, paper, and water-intensive industries contribute to this pressure.

3. Pollution

Waste and chemical pollution remain major threats to biodiversity — on land, in freshwater, and across oceans.

• Over 80% of global wastewater is discharged untreated.

• 300–400 million tons of industrial waste enter waterways annually.

• Fertilizer runoff has created 400+ coastal dead zones, totaling over 245,000 km².

• Marine plastic pollution has increased tenfold since 1980.

• At least 267 species — including turtles, seabirds, and marine mammals — are harmed by plastic ingestion or entanglement.

Pollution originates from many corporate activities: manufacturing, agriculture, waste handling, chemical production, mining operations, and consumer goods supply chains. Its impacts accumulate across ecosystems and often travel far from their source.

4. Climate change

Climate change is rapidly increasing its pressure on biodiversity and may soon exceed all other drivers.

Key findings:

• Global mean temperatures have already risen 0.7°C since 1980.

• Climate change is affecting species from genes to ecosystems.

• Coral bleaching, melting ice habitats, and extreme weather events signal rapid ecosystem disruption.

Corporate emissions from energy use, transportation, industrial processes, and land-use change are the primary sources feeding into this driver. As climate impacts intensify, biodiversity loss accelerates.

If you want to do something about climate change, I advise you to read this guide:

5. Invasive alien species

Global movement of goods and people — including a 3× increase in air travel — have dramatically increased the spread of invasive species.

These can:

• Prey on native species

• Spread disease

• Out-compete local flora and fauna

• Transform ecosystems permanently

Many industries contribute inadvertently through globalized supply chains, shipping, horticulture, and tourism.

The indirect drivers: economics, policy, and consumption

Behind the direct pressures are deeper structural forces that shape how societies use nature:

• World population doubled from 3.7 to 7.6 billion (1970–2018).

• Per capita consumption has risen sharply, with large inequalities.

• OECD countries subsidize ~$100 billion per year in environmentally harmful agriculture subsidies.
  (OECD countrie are members of the Organization for Economic Co-operation and Development (OECD), a group of 38 countries committed to democracy and market economies that collaborate on economic and social policy)

• Fossil fuel subsidies (~$345 billion per year) generate trillions in environmental externalities.

These indirect drivers create economic incentives that accelerate the direct drivers.

4. How biodiversity loss affects companies

Healthy ecosystems support business operations in countless ways — from soil fertility and water supply to stable coastlines, predictable weather, and reliable raw materials. When these systems decline, companies face real and growing risks across their value chains. The following sections summarize the main business risks linked to biodiversity loss, based on findings from the 2019 Global Assessment.

1. Operational and supply chain risks

The decline of key ecosystem services creates immediate challenges for companies that depend on natural inputs or stable production conditions. For example:

• Pollinator decline puts $235–577 billion in annual crop output at risk.

• Land degradation has reduced agricultural productivity on 23% of global land.

• Overfished oceans increase supply volatility and raise operational costs.

• Soil degradation forces farmers and suppliers to use more fertilizers and irrigation.

• Water scarcity grows when upstream forests and wetlands are damaged.

The result is increased volatility in commodities such as food ingredients, timber, fishmeal, natural fibers, and botanical materials — all of which many industries rely on.

2. Physical risks to assets and infrastructure

Ecosystems provide natural protection against storms, flooding, landslides, and extreme heat. When these systems deteriorate, physical risks rise:

• The loss of coastal habitats increases storm and flood risk for 100–300 million people and the infrastructure in those areas.

• More than 85% of wetlands have been lost, weakening natural flood control.

• Deforestation increases landslide danger and makes wildfires more severe.

• Loss of forest cover worsens droughts and heatwaves.

Businesses in vulnerable regions may face rising insurance premiums, higher repair costs, and more frequent operational disruptions.

3. Market and resource availability risks

As wild species and ecosystems decline, the availability of key natural resources becomes less predictable:

• Fish stocks shrink and risk collapse.

• Timber supply tightens as forests are cleared or degraded.

• Crop yields become more erratic as pollination and soil health decline.

• Genetic diversity in crops and livestock continues to fall — 559 domesticated mammal breeds have already gone extinct — reducing resilience to pests, diseases, and climate stress.

These changes affect commodity pricing, supply stability, and long-term business planning.

4. Financial risks

Ecosystem decline also affects financial performance and asset values. Examples include:

• Higher insurance payouts after ecosystem-related disasters.

• Lower asset values when natural buffers such as mangroves or reefs disappear.

• “Stranded asset” risk in sectors tied to destructive practices, where regulations or ecosystem collapse make operations unviable.

• Increased economic exposure when carbon sinks like forests and peatlands are lost.

One estimate referenced in the assessment shows how large the financial implications can be: fossil fuel subsidies of $345 billion per year have been linked to $5 trillion in global environmental costs.

5. Regulatory and compliance risks

Governments are responding to biodiversity decline by tightening policy and disclosure demands. This includes:

• New reporting rules such as CSRD and the TNFD framework.

• Due diligence requirements on deforestation and nature-related impacts.

• Rising permit and compliance costs in land-use–intensive sectors.

• Expansion of protected areas, limiting where companies can operate.

Companies that do not adapt may face penalties, import restrictions, or legal challenges.

6. Reputation and social license risks

As awareness grows, companies linked to ecological harm face increasing scrutiny. Social conflict is a major concern:

• There are more than 2,500 conflicts over fossil fuels, water, food, and land.

• Over 1,000 environmental defenders were killed between 2002 and 2013.

NGOs, communities, investors, and consumers now expect companies to demonstrate responsible stewardship of land, water, forests, and wildlife. Failing to do so can lead to project delays, loss of trust, and brand damage.

Key takeaway: Biodiversity risk cuts across operational, financial, legal, and strategic domains. Companies that fail to act face compounding liabilities; those that lead can access new markets and capital.

5. Feedback loops: how impacts become risks

When companies degrade ecosystems, they often undermine the very conditions that support long-term operations. Several reinforcing loops are already visible:

Many of nature’s contributions — such as pollination, pest control, and water regulation — cannot be replaced once lost. This means biodiversity decline can lock companies into long-term vulnerability unless underlying pressures change.

6. Takeaway

The assessment makes clear: biodiversity loss is s a systemic business risk. It touches every part of corporate activity, from raw materials and operations to finance, compliance, and community relations.

Forward-looking companies are responding by:

• Eliminating deforestation and other destructive practices from supply chains

• Investing in ecosystem restoration and nature-based solutions

• Integrating biodiversity considerations into risk management and governance

• Preparing for CSRD, TNFD, and other emerging regulations

• Supporting policy reforms that align economic incentives with healthy ecosystems

Biodiversity is the foundation of long-term business resilience. Companies that act now will be better positioned to navigate a future shaped by ecological limits — and to help build an economy that works with nature, not against it.

Relevant Sources

Our global food system is the primary driver of biodiversity loss

Corporate giants fall short on forest protection commitments, report

Biodiversity | OECD

Deforestation and Forest Loss - Our World in Data

Deforestation and Forest Degradation | World Wildlife Fund

Six charts that show the state of global biodiversity loss | World Economic Forum

The Biodiversity Crisis Is a Business Crisis

IPBES global assessment report summary for policymakers

Relevant Standards

ESRS E4 July 2025

Biodiversity-sensitive areas are places that hold particular importance for ecosystems and species. They are either legally protected by governments or scientifically recognized as vital for biodiversity. For corporate leaders, understanding where operations intersect with these areas is critical to avoiding regulatory risks, reputational damage, and supply chain disruption.

This issue is now embedded in policy frameworks such as the EU’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS), which explicitly require disclosure of company sites in or near biodiversity-sensitive areas.

By reading this article, you will learn:
✅ The definition of biodiversity-sensitive areas according to the CSRD
✅ Why biodiversity-sensitive areas matter for business
✅ Tools and data sources that help companies comply

2. The definition of biodiversity-sensitive areas according to the CSRD

Biodiversity-sensitive areas are broadly defined under two categories in ESRS E4:

1. Legally protected areas:
   These include:

   • Natura 2000 sites in the EU

   • UNESCO World Heritage natural sites

   • Ramsar wetlands (wetlands of international importance)

   • Other areas protected under national or regional legislation

   These are formally designated areas subject to legal restrictions, where corporate activity may be prohibited or tightly controlled.

2. Scientifically recognized areas of high biodiversity importance:
   These include:

   • Key Biodiversity Areas (KBAs)

   • Ecologically or Biologically Significant Marine Areas (EBSAs)

   • Ecosystems classified as threatened on the IUCN Red List of Ecosystems

   • Habitats of species listed on the IUCN Red List of Threatened Species

   These designations highlight places essential for the persistence of biodiversity, even if not formally protected by law.

Together, these categories ensure companies must consider both legally restricted zones and ecologically critical habitats when assessing impacts and disclosures.

3. Why biodiversity-sensitive areas matter for business

Biodiversity loss has become one of the most urgent global risks facing society and business. The World Economic Forum ranks biodiversity loss and ecosystem collapse among the top three most severe risks humanity will face in the next decade, with over half of global GDP (about $44 trillion) dependent on nature and its services. For companies, this means that protecting ecosystems is a core aspect of risk management and long-term value creation.

Companies face multiple types of exposure:

• Regulatory and legal risk: Many sensitive areas are protected by law, restricting industrial or commercial activity. For example, EU law requires any project near a Natura 2000 site to undergo an Appropriate Assessment, with potential blocking of projects if impacts cannot be mitigated .

• Reputation risk: Operations near iconic biodiversity sites (such as World Heritage Sites) can trigger significant public backlash and stakeholder opposition, harming brand value.

• Operational and supply chain risk: Ecosystem degradation can disrupt natural services such as water availability, soil fertility, or fisheries productivity. Companies operating near sensitive ecosystems may also face operational restrictions or costly compliance requirements.

• Financial and investor risk: Under the EU Sustainable Finance Disclosure Regulation (SFDR), investors must report on portfolio exposure to operations affecting biodiversity-sensitive areas . Companies with unmanaged impacts may face reduced access to capital or investor exclusion.

• Dependency risk: Many sectors depend directly on ecosystem services safeguarded by sensitive areas, such as clean water, pollination, or genetic resources for pharmaceuticals.

4. Tools and data sources that help companies comply

Complying with these requirements requires reliable geospatial analysis. Several global tools and databases support companies in identifying biodiversity-sensitive areas:

• Integrated Biodiversity Assessment Tool (IBAT): Provides authoritative data on protected areas (WDPA), KBAs, and IUCN Red List species. It can generate Disclosure Preparation Reports highlighting which company sites overlap or are near sensitive areas, and includes STAR metrics on species risk.

• World Database on Protected Areas (WDPA): The official global dataset of legally protected areas, accessible through Protected Planet.

• Key Biodiversity Areas database: Maintains global information on KBAs and the species or ecosystems that justify their designation.

• EBSA repository: Hosted by the Convention on Biological Diversity, with maps of significant marine areas.
  IUCN Red Lists: Cover both threatened species and ecosystems, highlighting sensitive habitats.

You can also draw on national databases or specialized consultancy services for local context.

Relevant Sources

Biodiversity loss poses a fundamental risk to the global economy | World Economic Forum

The Natura 2000 protected areas network — European Environment Agency

Mapping the planet’s critical areas for biodiversity and nature’s contributions to people | Nature Communications

Identify priority protected areas for biodiversity conservation adapting to future climate and land cover changes - ScienceDirect

Biodiversity measurement approaches_A-practitioners-guide-for-financial-institutions

Relevant Standards

ESRS E4 July 2025

ACRONYMS AND GLOSSARY OF TERM July 2025

Biodiversity loss is moving quickly, undermining food security and supply-chain resilience.

The Kunming-Montreal Global Biodiversity Framework (GBF), adopted at CBD-COP 15 in December 2022, is the new global roadmap to halt and reverse nature loss through 2050.

The EU’s Corporate Sustainability Reporting Directive (CSRD) embeds the GBF in its biodiversity standard (ESRS E4), requiring firms to show how their strategies “align with the vision of the Kunming-Montreal Global Biodiversity Framework and its relevant goals and targets”.

Reading preview, you will learn:
✅ The GBF’s 2050 vision and 2030 mission
✅ The four long-term “Kunming-Montreal Global Goals”
✅ The structure of the 23 targets, including the flagship 30 × 30 commitment
✅ How ESRS E4 links corporate transition plans to the GBF
✅ Practical benefits and hurdles for companies as they operationalise the Framework

By the end, you will know why and how the GBF has become a reference point for ESG reporting and what your company can do with this framework.

2. Kunming-Montreal in a nutshell

2050 vision & 2030 mission
The Framework’s vision is “a world living in harmony with nature where by 2050 biodiversity is valued, conserved, restored and wisely used”. Its mission to 2030 is to “take urgent action to halt and reverse biodiversity loss to put nature on a path to recovery”.

Four global goals for 2050:

Twenty-three action targets for 2030
The Kunming-Montreal Global Biodiversity Framework includes 23 urgent targets that must be started now and finished by 2030 to help reach long-term biodiversity goals by 2050. These actions should align with global agreements and be adapted to each country’s needs and situation. The targets fall under three thematic pillars:

1. Reducing threats to biodiversity (Targets 1-8) – including Target 3 to conserve at least 30 % of land, inland waters and seas by 2030 (“30 × 30”).

2. Meeting people’s needs through sustainable use & benefit-sharing (Targets 9-13) – e.g., sustainable agriculture & forestry (Target 10).

3. Tools & solutions for implementation & mainstreaming (Targets 14-23) – notably Target 15 on mandatory biodiversity disclosure for large companies and financial institutions, and Target 18 to redirect US $500 bn per year in harmful subsidies.

For all 23 targets check out section H of the Kunming-Montreal Global Biodiversity Framework

3. What the GBF means for corporate sustainability reporting

Read more