Biodiversity loss – sustainability and ESG trends for 2025

This article is an excerpt from our report ‘Navigating the future of sustainability and ESG’ which is available to download directly.

Biodiversity impacts are set to become firmly embedded in corporate sustainability strategies in 2025, with many companies having already made significant commitments to reduce biodiversity loss. The World Economic Forum has stated that as of January 2024, 60% of global GDP is dependent on nature’s diverse services, from clean water supplies to pollination services.

Consequently, experts have calculated that one in five companies could face significant operational risks due to collapsing ecosystems, in terms of financial performance and loss, litigation and reputational damage.

As recognised by the United Nations (UN), nature loss has far-reaching consequences. Damaged ecosystems exacerbate climate change, undermine food security and put people and communities at risk. Those impacts will likely intensify in the absence of meaningful nature restoration efforts. We may also see mass migration of displaced communities and workers seeking opportunities elsewhere.

Our report delves deeper in to the nexus between climate change and biodiversity loss, biodiversity initiatives and the global drive to regulate.

Practical considerations for businesses and insurers

Increasing regulatory focus on climate and biodiversity disclosures will require companies to adopt a more integrated and strategic approach to ESG and sustainability compliance generally.

Consideration should also be given to developing a co-ordinated global sustainability strategy to ensure consistency in climate disclosures across different jurisdictions.

Regulator audits and reviews of corporate governance strategies will enable interested stakeholders to have transparency over a company’s climate and biodiversity information and mitigate against future risks of greenwashing. A proactive approach to ESG governance will also enhance company reputation and investor confidence.

For insurers, regular corporate governance reviews with policyholders will ensure the continuance of building relevant questions into their placement process to mitigate claims and litigation risk.

Read more about the nexus between climate change and biodiversity loss, biodiversity initiatives and the global drive to regulate in our report.