Chris Iggo

Macroscope | Why, more than ever, nature is a sound investment

As companies develop ways to improve how we farm, breed fish for food, package food and drink, and so on, they will need the backing of investors

If the world is to reduce carbon emissions and their impact on the planet and the global economy, billions more needs to be invested in nature-based solutions

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Members of the Freshwater Biological Association release juvenile freshwater mussels that have been reared in captivity into the River Irt in the Lake District, in the UK, on September 6. As biodiversity deteriorates around the world, affecting the economy in complex ways, investors need to think green. Photo: AFP

Chris Iggo

Published: 10:30pm, 20 Sep 2023Updated: 12:11am, 21 Sep 2023

Biodiversity is deteriorating at an alarming rate and its loss is causing damage not only to the natural world but to society, the planet and the global economy.

The World Economic Forum estimates that more than half of global gross domestic product – around US$44 trillion – depends on high-functioning ecosystems. Understanding how biodiversity risks might impact the economy and investments is crucial. Investors should also consider ways to contribute positively to good social and environmental outcomes.

There are several areas that require more public awareness if the planet is to address the biodiversity challenge.

Biodiversity must be a priority, alongside climate change. Land and marine ecosystems absorb more than half of man-made carbon emissions, while some 25 per cent of greenhouse gas emissions come from land clearing, crop production and fertilisation, with animal-based food contributing 75 per cent of that. In turn, climate change is becoming an increasingly significant driver of biodiversity loss.

As climate change and biodiversity loss are interconnected, this means the issues must be tackled together.

While climate change focuses on a single metric – carbon emissions – biodiversity is multifaceted. Damaging a complex system like the natural world has innumerable economic consequences.