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Half of global GDP at risk: WEF

Lachlan Maddock
— 1 minute read

More than half of global GDP is under threat from biodiversity loss, with extinctions and ecosystem collapse set to impact supply chains and disrupt markets.

According to a joint report from the World Economic Forum (WEF) and PwC, up to $44 trillion of economic value generation – half of global GDP – is threatened by loss of diversity and nature, with the construction and agriculture industries at greatest risk. 

“Nature loss is a fat-tail risk like the 2008 asset-price bubble: it cannot be seen with a linear world view, but once triggered can have far greater than average implications,” said Dominic Waughray, managing director of WEF board. 

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“This has significant ramifications for businesses both in the short and long term and requires a reset of how businesses perceive, assess and mitigate nature risks.”

Six industries – chemicals and materials; aviation, travel and tourism; real estate; mining and metals; supply chain and transport; retail, consumer goods and lifestyle – have “hidden dependencies” on nature throughout their supply chains, with 50 per cent of their gross value added exposed to loss of biodiversity and nature.

Businesses need to have a better understanding of the material and business risks posed by biodiversity loss, improve governance in order to deal with them, and focus on transitioning away from at risk areas. 

The report identifies annual business opportunities of $4.5 trillion by 2030 if businesses transition towards a nature-positive economy that includes activities like forest restoration, sustainable aquaculture, plant-based meat, and regenerative agriculture. 

“By investing in a more nature-positive way of doing business, we can mitigate significant economic and societal shocks in the coming future,” Mr Waughray said. 

“To this end, there is a need for new mechanisms of public-private collaboration and non-traditional flows of finance to reverse nature loss and secure a net-zero emissions world by 2050.”

 

Half of global GDP at risk: WEF
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