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Failing to Protect Nature’s Capital Could Cost Businesses Trillions

January 28, 2015 |

Forests and other natural infrastructures provided up to $72tn a year of support to the global economy. 

Inger Andersen, director general at the International Union for Conservation of Nature, writes for the Guardian about the connection between healthy natural systems, and sustainable grown in business. 

“Nature is like an angel investor in the global economy: financially significant, yet widely unknown. The global pharmaceuticals industry, for example, is worth some $640bn. But few know that up to 50% of this market is based on the genetic diversity of wild species. Mangroves in Thailand are worth about $1,000 per hectare if exploited for wood. If left intact, the value of these coastal forests for flood protection, carbon capture and fish breeding grounds is more than $21,000 a hectare.

Often referred to as natural capital, nature’s infrastructure – forests, river basins, wetlands, coral reefs and so on – provides fundamental inputs to the production of all kinds of goods and services. A 2012 study by The Nature Conservancy and the Corporate EcoForum estimated that the environment provides some $72tn a year of “free” support to the global economy. That’s more than four times the size of the US economy.

Meanwhile, Unep reports that the use of these natural resources is generating environmental and social costs to the tune of $6.6tn a year (pdf) – costs that could climb to $28tn a year by 2050 if we fail to take action. So while we reap the benefits of nature, we are undermining its valuable inputs.

Two-thirds of the planet’s terrestrial and aquatic ecosystems are now significantly degraded due to human activity. Fishing, logging, mining and agriculture are all pushing more and more species to the brink. The fishing industry, for example, is likewise threatening the survival of many species of fish, including its latest victims: the Pacific bluefin tuna and the Chinese pufferfish.

Failing to account for natural capital is the quickest route to depleting the planet’s resources. And because so many businesses depend on nature, short-term stripping of its assets is accumulating a big backlog of risk for investors…” values and conserves the nature we depend on be just the thing to help us thrive in this new and challenging context?…

Read on at: The Guardian

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