How Nature is Linked to Business and the Economy

Eva Zabey of the World Business Council for Sustainable Development sets forth valuing nature through the concept of ecosystem services as a way to put the economy on a more sustainable path. The forest provides us wood but also stores carbon and reduces erosion; "an ecosystem provides a service when someone benefits from it."

The resources of the planet significantly contribute to the world's economy; nature is much like an angel investor in the global economy. For example, the global pharmaceutical industry is worth about $640bn and 50% of this market is based on the genetic diversity of wild species.

According to a new World Economic Forum (WEF) study last Sunday, businesses are dependent on nature with an estimated exposure of 44 trillion USD or half the world GDP. They said about 25 percent of our assessed plant and animal species are threatened with human actions, with a million species facing extinction.

The intersection of business and natural resources goes far back in time, but the protection of nature is becoming a more central concept to business. Back then, businesses cared about the environment as a public relations platform but it is now part of actual business decisions, critical to central planning for a business.

A new report says over half of the world's GDP is exposed to risks from nature loss.

This juxtaposed a 12-month period which resulted in the hottest year on record for the world's oceans and the second-hottest year for global average temperatures and wildfires from the U.S., to the Amazon, to Australia.

They found that $44 trillion of economic value generation - more than half of the world's GDP - is moderately or highly dependent on nature and its services and is exposed to nature loss.

Political efforts to set out the protection of nature have fallen desperately flat as back in 2010, at a meeting of the Convention on Biological Diversity in Aichi, Japan, delegates set themselves a series of targets for conservation for 2020. Positive results have only been made on four of the 20 goals.

Also, studying the 163 industry sectors and their supply chains show that over half the world's GDP is moderately or highly dependent on nature.

According to Zabey, the concept of ecosystem services can be utilized to engage business because "services can be bought, sold or traded and therefore they have a value." Businesses depend on freshwater and pollination. Banks are now assessing ecosystem risks before lending. Mangroves in Thailand amount to about $1,000 per hectare if exploited for wood and if left intact, the value of these coastal forests for flood protection, carbon capture, and fish breeding grounds is more than $21,000 a hectare.

Natural capital comes in the form of nature's infrastructure - forests, river basins, wetlands, coral reefs and so on - which provides fundamental inputs to the production of all kinds of goods and services.

China, the EU, and the US have the highest absolute economic value in industries relying on nature.