The financial risks posed by the loss of species and ecosystems have risen sharply and are becoming a greater concern for businesses than international terrorism, according to a United Nations report released today.
From over-depletion of fish stocks and soil degradation caused by agricultural chemicals to water shortages and mining pollution, the paper – commissioned by the UN Environment Programme and partners – said the likelihood has climbed sharply that declines in biodiversity would have a "severe" $10bn (£6bn) to $50bn impact on business.
With the European Union and other regions increasingly holding companies liable for impacts on ecosystem services, it suggests banks, investors and insurance companies are starting to calculate the losses that could arise from diminishing supplies, tightened conservation controls and the reputational damage caused by involvement in an unsound project.
Achim Steiner, UN under-secretary general and Unep executive director, said: "The kinds of emerging concerns and rising perception of risks underlines a fundamental sea change in the way some financial institutions, alongside natural resource-dependent companies, are now starting to glimpse and to factor in the economic importance of biodiversity and ecosystems".
The briefing paper cites the 55% crash of BP's share price and the decline of its credit rating in the wake of the Gulf of Mexico oil spill as an extreme example of the potential impact of inadequate environmental controls.
Richard Burrett, who co-chairs the Unep Finance Initiative and authored the report, said such cases highlighted the need for a new form of risk assessment that takes the value of ecological services into account. Water systems and forests are currently considered Read more here
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