Executive Summary
Climate goals are unattainable without a healthy planet. Yet natural capital and ecosystem services are deteriorating at an alarming pace. The Living Planet Index shows a -73% decline in wildlife populations over the past five decades. Without rapid action to halt and reverse biodiversity loss, the ecosystems that support food, water, climate stability and economic growth will continue to erode.
Nature underpins more than half of global GDP. Continued biodiversity loss could slash global GDP by -2.3% by 2030, relative to a baseline in which biodiversity remains at 2020 levels, with far deeper impacts on developing economies (-7% to -10%). Drivers include deforestation, pollution, intensive agriculture and climate change. These risks flow through two channels: physical risks, as ecosystem services like pollination and water regulation fail, and transition risks, as policy, market and consumer shifts raise compliance costs, strand assets and reshape competitiveness. Ecological decline is now a direct macro-financial threat.
The Half-Earth scenario, which proposes to protect 50% of land on the planet, offers a bold pathway to restore critical ecosystems. Large scale Protection of land would restore biodiversity to 2010 levels. Such a transition pathway brings adjustment costs: by 2050, global cropland could shrink -11%, raising food prices by +15% and global CPI by +24%, with developing economies seeing sharper GDP impacts (up to -19%) than advanced markets (around -4%). Our findings highlight that while biodiversity protection is vital, it must be accompanied by inclusive economic transition strategies to avoid widening global inequality. But these costs are far lower than losses from unchecked nature decline. For example, the loss of just one ecosystem service such as pollination would inflict greater damages than large-scale conservation in major economies, such as Europe, the UK and the US.
Expanding protected areas alone cannot deliver recovery. On the supply side, sustainable intensification through regenerative agriculture, precision farming, soil restoration and crop diversification can raise yields without expanding farmland. Global trade in certified sustainable commodities can reduce pressure on biodiversity hotspots while maintaining market access for developing producers. On the demand side, dietary shifts toward plant-rich diets and reduced meat consumption, alongside food waste reduction, are crucial to free land for restoration and cut emissions. Simulation models show that isolated actions achieve limited gains, but when conservation, sustainable production and responsible consumption advance together, the Living Planet Index more than doubles by 2100, restoring biodiversity to levels above those of 1970.
Closing the USD700bn annual biodiversity finance gap is essential. Current flows total just USD143bn, though private investment has grown rapidly, from USD9.4bn in 2020 to over USD100bn in 2024, driven by new nature-focused funds, credit instruments and green bonds. The Kunming-Montreal Global Biodiversity Framework targets international financial flows of USD20bn per year by 2025 and USD30bn by 2030 but achieving this will require a major scale-up of blended finance, stronger policy incentives and standardized biodiversity taxonomies to guide capital.
Finance will determine whether biodiversity recovery succeeds, and insurers are on the front line. They can underwrite restoration projects, offer ecosystem-based coverage and create transition products that reward sustainable practices. By valuing and protecting natural assets, insurers also shield themselves from the rising physical and liability risks of ecological decline, such as flood losses from wetland degradation or stranded assets as regulation tightens. Investors, too, are stepping up. Biodiversity-themed funds now exceed USD1.6bn, while portfolio managers increasingly use tools like the Global Biodiversity Score to align investments with nature goals. Public programs are amplifying these efforts: the EU’s InvestEU aims to mobilise EUR10bn for natural capital, and France’s SNCRR initiative is building biodiversity credit markets. To meet the Kunming–Montreal targets, including USD200bn a year in biodiversity finance by 2030, financial institutions must expand capital flows, strengthen safeguards and make biodiversity impact reporting as standard as carbon disclosure.