Why the crisis engulfing nature matters for business and the economy
The past 50 years have brought significant economic prosperity to much of humanity, with the global economy increasing four-fold and life expectancy surging everywhere. However, in achieving this growth we have eroded the natural systems that support our existence and sustained prosperity. Approximately 1 million species are facing extinction within decades. Ecosystems have declined in size and condition by an average of 47% globally compared to estimated natural baselines. We are crossing the planet’s boundaries and natural systems’ ability to cope, increasing the risk of large-scale, irreversible environmental and societal changes.
It is now becoming clear that the benefits of continuing with this current economic model are at risk of being outweighed by the costs of nature loss. Even as these traditionally have been largely absent from national accounts and corporate balance sheets, they are increasingly emerging as unanticipated business risks and systemic risks to economies and societies worldwide.
To explore this issue, PwC has collaborated with the World Economic Forum on the first New Nature Economy (NNE) report, a forthcoming series under the Forum’s Nature Action Agenda (NAA). This first report aims to make the case for why the nature crisis is material to business and the economy, including the scale and urgency of nature-related risks and the potential consequences for businesses and the economy.
2020 is a critical year for nature: world leaders have a unique opportunity at the UN Convention on Biological Diversity (CBD) in Kunming, China, to forge an international agreement to reverse nature loss, akin to the 2015 Paris Agreement on climate change. Business actors and other economic actors will have an important role to play to make this happen.
The report outlines the types of business and economic risks that can arise from nature loss, including key examples of where such risks have materialised, as well as a suggested approach for managing nature-related risk.