How fungi and lizards help the economy

Biodiversity is a huge and vital asset for our economy. More than half of the world’s total gross domestic product is moderately or highly dependent on nature and its services.¹ Some business activities relying on natural resources do not have adequate management practices in place, causing habitat loss and degradation that threaten our future prosperity.  

Countries have gathered at the landmark UN Biodiversity Conference (COP15) in Montreal, Canada, this month to set goals to halt and reverse nature loss (this is the Post-2020 Global Biodiversity Framework, or GBF). In this insight, we explore why biodiversity matters so much for business, showing how many established products – from medicines to food and clothing – are derived from nature.

A thriving natural world holds the key to other potential discoveries, and new products and services that could disrupt the status quo. Examples might include better painkillers and treatments, or even ways to regrow tissues and organs.²

What is biodiversity?

Biodiversity refers to the variety of living organisms on Earth. These include plants, animals, fungi and microorganisms on land and in water. When these organisms and their environment function together as a unit, they form an ecosystem. Biodiversity encompasses the genetic diversity within species, as well as the variety of ecosystems.

Species diversity makes ecosystems more resilient and better able to provide services such as pollination, climate regulation, flood mitigation and soil fertility.

Why does it matter to business?                     

Some economic advantages of healthy ecosystems are obvious: agriculture needs soils and a water supply; forestry needs trees. But weakened ecosystem services can reduce the quality and availability of natural resources used by a variety of industries, leading to higher raw material costs and other harmful outcomes.

Many products were also derived from or inspired by nature. Here are just some examples:

sources:

CONCLUSION

As these examples help to show, the conservation and restoration of biodiversity can provide significant business opportunities, including long-term viability of business models; cost savings and efficiency gains; and new products and services.

At Lombard Odier, our Natural Capital strategy taps into the growth opportunities from preserving and harnessing the regenerative power of nature. Biodiversity investment themes include biomaterials, performance materials, water solutions, sustainable packing and eco design.

The enhanced focus on biodiversity at COP15 will underscore the need to invest in building more sustainable business models. In short, a healthy, well-functioning natural world will preserve the very foundations of industry and the pathways to future economic growth.

Sources

[1] World Economic Forum

[2] Biodiversity loss – it will make you sick | IUCN

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