From risk to strategy: Biodiversity as a material topic

evolito

03 September 2025

For decades, biodiversity was seen as a niche concern. Conservation was left to NGOs, scientists, or government agencies, while companies focused on emissions, energy, and waste. That is changing. Biodiversity is now emerging as a material topic for business and investors. The shift is not only about reputation or ethics. It reflects financial risk, regulatory demand, and the recognition that healthy ecosystems underpin stable markets and societies.

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From peripheral to core

The concept of materiality has long guided corporate reporting. Traditionally, it focused on issues that directly influence a company’s financial performance. With the rise of sustainability reporting, this lens has widened. The European Union’s Corporate Sustainability Reporting Directive (CSRD) requires companies to apply double materiality: assessing both how environmental and social issues affect the business, and how the business impacts people and nature.

Biodiversity sits at the heart of this dual perspective. On the inside-out side, companies depend on healthy ecosystems for raw materials, water, pollination, and climate regulation. On the outside-in side, corporate activities can drive deforestation, habitat loss, or species decline, creating risks that reverberate back through supply chains, regulatory exposure, and investor confidence.

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Why biodiversity is financially relevant

The economic value of ecosystem services is vast, estimated at more than $125 trillion per year globally. For companies, these services translate into concrete dependencies:

Food and agriculture: Crops rely on pollinators, healthy soils, and stable water cycles. Without them, yields drop and costs increase.
Renewable energy developers: Solar parks and wind farms need credible biodiversity data to secure permits, protect local ecosystems, and demonstrate net positive impact.
Forestry and nature restoration: Long-term resilience of forests and restoration projects depends on insects, soil biodiversity, and ecological monitoring to verify success.
Pharmaceuticals and health industries: Natural compounds found in diverse ecosystems form the basis for many modern medicines.

When biodiversity declines, these industries face risks ranging from supply chain instability to reputational damage. Investors and regulators increasingly see these risks as material, requiring transparent disclosure.

The regulatory push

Biodiversity has moved from voluntary reporting into the core of global sustainability frameworks. A range of initiatives now require companies to measure, disclose, and act:

CSRD (Corporate Sustainability Reporting Directive): Mandates biodiversity and ecosystem health disclosures for large companies operating in the EU.
Double materiality assessments: Legally required under CSRD, companies must evaluate both how nature affects their operations and how their operations impact nature.
TNFD (Taskforce on Nature-related Financial Disclosures): Provides a framework for identifying, assessing, and disclosing nature-related risks and dependencies.
SBTN (Science Based Targets for Nature): Offers science-based guidance on setting targets for biodiversity, land, and water use, aligned with planetary boundaries.

Together, these and other frameworks make biodiversity a core compliance and strategy issue. For companies in food, agriculture, forestry, and renewable energy, they also provide a roadmap to move from risk management toward measurable, nature-positive outcomes.

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Beyond compliance: opportunity and trust

While regulation drives action, companies that treat biodiversity as strategic gain more than compliance. Integrating biodiversity intelligence can:

Strengthen supply chain resilience.
Unlock access to green finance and impact investors.
Build trust with customers, communities, and regulators.
Demonstrate leadership in emerging biodiversity markets, including biodiversity credits.

By showing measurable outcomes, companies avoid accusations of greenwashing and align with growing stakeholder expectations for transparency.

Why now

Biodiversity is not only an environmental issue. It is a business issue, a financial issue, and a societal issue. More than one million species are at risk of extinction. The services they provide are irreplaceable. As reporting frameworks evolve and as ecosystems reach critical thresholds, biodiversity has become material in the truest sense: it shapes risks, opportunities, and the ability of companies to thrive in the long term.

For businesses, the question is no longer whether biodiversity matters. The question is how to measure, report, and act on it in a way that supports both corporate performance and a nature-positive future.

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