The Productivity of Ecosystems

In 2019, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) highlighted a troubling trend: biodiversity is vanishing at an alarming rate. Over one million species are at risk of extinction. Less than a year later, the World Wildlife Fund reported a 68% decline in wildlife populations since 1970. Scientists agree that this loss of biodiversity signifies the sixth mass extinction event on Earth, with humans being the primary cause.

Ecosystem services: The World’s most valuable utility companies

The World Economic Forum estimates that more than half of global economic value depends on food, drinking water, or construction materials, which are all products of ecosystem services. Even in service-based economies like France, around 42% of financial institutions’ impacts are closely tied to these ecosystem services. This quantification underscores the societal impact of biodiversity loss, illustrating how employment and wealth are intricately linked to nature conservation.

The costs of biodiversity loss are estimated to range from $4 trillion to $20 trillion per year, according to the Organisation for Economic Co-operation and Development (OECD). These costs include not only direct expenses from failed crops but also indirect costs from the impaired functioning of ecosystems that provide crucial services like water purification and pollination.

Decline Among Natural Pollinators

The Dutch economy is also directly reliant on ecosystem services, for example in horticulture and fruit growing. Crops like apples, pears, and cherries depend on natural pollination for over 80% of their yield. A healthy, diverse ecosystem directly enhances the productivity of fields and orchards. The Dutch Central Bank (DNB) has estimated that around €510 billion in investments in the Netherlands depend on at least one ecosystem service, such as pollination. According to DNB, this represents 36% of the portfolio of over EUR 1,400 billion it examined.

Investing in Protection and Restoration

At COP15 in Montreal, the fifteenth meeting of the parties to the Convention on Biological Diversity (CBD), the Kunming-Montreal Global Biodiversity Framework (GBF) was approved. This ambitious agreement aims to protect 30% of areas on land and at sea, especially areas of particular importance for biodiversity, and restore 30% of degraded land by 2030. It also presents opportunities for businesses and financial institutions to invest in biodiversity-friendly economic activities, unlocking new markets and stimulating innovation.

Camille Maclet, Group biodiversity expert at BNP Paribas, emphasizes the importance of integrating the consideration of nature protection and restoration in economic sectors. The agriculture, forestry and fisheries sectors are particularly relevant, as well as extractives, but there are also opportunities in other sectors to consider solutions that generate positive impacts for nature – both in direct operations, and in their value chains, which are often ultimately related to agriculture and, or extractives.

Banks have various opportunities to support the green transition of their clients. Typically, they can develop financial solutions to support businesses that invest into biodiversity protection and restoration, innovate at the nature-climate and just transition nexus, and build leadership in support of a greener economy . Bringing about this transition requires collaboration across society including with government entities, academia, civil society,  local communities and, where relevant, indigenous people.

“We cannot ignore today´s global and rapid trend of nature loss, just like we can´t ignore climate change and the consequences of pollution. These are various sides of the same global ecological crisis, with vast consequences for the economy. Businesses and financial institutions should understand and manage their nature-related dependencies, risks, impacts and opportunities – thereby strengthening their own resilience and, collectively, the resilience of the economy as a whole. Through its financing policies and client engagement, BNP Paribas encourages its clients to understand and address the causes of nature loss in their business, and seek opportunities to generate positive outcomes for nature.

BNP Paribas refers to the five main drivers of nature loss defined by the Intergovernmental Policy Platform on Biodiversity and Ecosystem Services (IPBES) to focus its action on biodiversity. This includes, inter alia, specific focus on agricultural commodities, which are recognised as sectors with significant exposure to tropical deforestation. In this respect, BNP Paribas encourages its customers producing or buying beef or soy from the Amazon and the Cerrado in Brazil to become ‘zero deforestation’ by 2025. Additionally, in 2021, we committed to aim to reaching €4 billion of credit exposure and bond facilitation in projects that contribute to biodiversity restoration and protection by 2025.

Collaboration plays a key role. BNP Paribas participates in several initiatives including Act for Nature International, the Taskforce on Nature-related Financial Disclosures (TNFD) and the Partnership for Biodiversity Finance Accounting (PBAF). These provide platforms for financial institutions and companies to collaborate towards building leadership and awareness on the importance of protecting and restoring biodiversity, and developing market practice in support of the transition to a greener, more resilient economy.

Camille Maclet, Group biodiversity expert at
BNP Paribas