Biodiversity in the boardroom: The business case for embracing nature

For decades, nature and biodiversity have been discussed primarily within the domains of conservation, environmental NGOs or corporate social responsibility. However, in today’s rapidly evolving global economy, nature is emerging as a material factor in business performance, resilience and competitiveness.

Nature as a strategic business concern

The degradation of ecosystems is no longer an abstract environmental issue. It has real and measurable impacts on supply chains, asset values, regulatory exposure, consumer trust and access to capital. In fact, more than $58 trillion of global economic value - over half of global GDP - is moderately or highly dependent on nature and its services, according to the World Economic Forum. Yet biodiversity is declining at an unprecedented rate due to land-use and sea-use change, pollution, climate change, introduction of invasive species and overexploitation.

As a result, nature-related strategic, compliance, financial and operational risks are becoming more visible and pressing. Consumers, investors, regulators and supply chain partners are starting to demand transparency around how companies impact and depend on the natural world. This shift marks a structural change in how businesses must think about strategy, risk and value creation.

In this context, biodiversity and ecosystem services must move from the periphery of corporate sustainability programs into the core of commercial and boardroom decision-making. Below, we present eight commercially grounded reasons why businesses should integrate nature into strategy - focusing on quantifiable risks, regulatory foresight and tangible sources of competitive advantage.

1. Ecosystem degradation drives operational cost and disruption

Healthy ecosystems underpin business continuity. They provide essential services such as climate regulation, soil fertility, pollination and the supply of freshwater. When these systems degrade, operations become more expensive and less reliable.

For example, pollinator loss affects global agricultural outputs valued at $235–$577 billion per year. Soil degradation alone may reduce global crop yields by up to 50% by 2050, further exacerbating inflationary pressures. Similarly, water scarcity, intensified by land degradation, overconsumption and climate change has led to factory shutdowns in textile manufacturing and disrupted high-growth markets like data centres.

Companies can reduce this exposure by mapping where ecosystem dependencies exist across their value chain and conducting nature-related risk assessments. Integrating these insights into strategic planning helps identify cost-effective mitigation actions and supports continuity planning.

2. Regulatory shifts are rewriting the rules of business

Environmental regulation is entering a new phase, with biodiversity and land use at the centre. Global and local regulations are targeting environmental protection and restoration as society adjusts to systemic nature-related risks. The UK Government, for example, has introduced Biodiversity Net Gain whilst the EU has steadily scaled-up the designation of marine and terrestrial protected areas. Simultaneously, the EU Deforestation Regulation prohibits the import of products linked to deforestation without the ability to demonstrate stringent due diligence. The last decade has seen an exponential increase in the use of economic instruments (e.g. taxation, credits) and limits on the production, use and emission into the environment of substances deemed harmful, with some substances being phased out or banned entirely.

By anticipating these regulatory trends and analysing how changes to the regulatory environment may impact business activities, firms can more efficiently manage operational and procurement costs and avoid non-compliance.

This regulatory foresight is a tool, allowing businesses to position themselves to take advantage of a changing regulatory landscape and seize upon the opportunities this presents within the market.

3. Procurement standards are raising the bar for suppliers

Corporate buyers are embedding biodiversity performance into their sourcing frameworks. This reflects both risk management and brand positioning concerns - large firms are under pressure to eliminate deforestation, habitat destruction and unsustainable practices from their supply chains.

This creates new expectations for suppliers in sectors like food, forestry, textiles, mining and construction. Those who cannot demonstrate traceability or compliance with biodiversity regulation may face exclusion from key markets.

On the flip side, by showcasing a good understanding of interactions with nature and demonstrating good performance, a company can secure a competitive edge. This not only satisfies evolving customer and procurement requirements but also builds trust and loyalty, ultimately boosting demand and market share.

Embedding nature considerations into procurement strategy de-risks supply chains, builds resilience and secures access to future markets.

4. Capital markets are pricing in nature risk

Nature-related financial risks are increasingly influencing access to capital. The Taskforce on Nature-related Financial Disclosures (TNFD), backed by leading financial institutions and in collaboration with the IFRS, has established a framework to assess nature-related dependencies and impacts. Investors and insurers are already using it to evaluate corporate exposure to nature-related risks as well as their financed impacts on nature.

This shift carries tangible financial consequences. Companies that meet sustainability-linked loan criteria - such as reducing land-use impacts or safeguarding critical habitats - may benefit from preferential interest rates. In contrast, weak biodiversity governance is becoming a reason for higher risk premiums or capital exclusion.

Firms that proactively address nature risks and align with emerging disclosure expectations will be better positioned to secure capital on favourable terms.

5. Consumer expectations are shaping demand

With biodiversity loss now visibly linked to deforestation, agriculture, water pollution, and cosmetics sourcing, consumers are increasingly choosing products based on environmental performance. Brands seen as causing harm to the natural environment risk backlash, while those able to credibly demonstrate nature-positive practices can capture market share.

A robust and market-facing strategy to accommodate the natural world, commitments to strengthen this and engaging in industry initiatives will aid in communicating this intent with the market and in creating a competitive advantage. Embedding biodiversity into product design, packaging, marketing, and sourcing not only meets regulatory and investor demands - it connects with consumers in a way that builds loyalty and brand equity.

6. Innovation unlocks new nature-based revenue streams

Nature-based solutions are increasingly recognised as scalable, cost-effective approaches that address environmental challenges while creating new commercial opportunities. Nature integration also drives innovation in business models. For example, food producers adopting regenerative practices report improved soil health, reduced dependency on synthetic inputs, and higher crop yields - directly supporting margin improvement and supply chain resilience. Moreover, regenerative agriculture can introduce new revenue streams, such as agritourism and carbon creditsFrom nature-positive packaging and ecosystem services contracting to premium market segments based on verified biodiversity outcomes, new commercial pathways are emerging across multiple sectors.

Embedding nature into R&D, product development and service innovation enables firms to align with regulatory shifts, meet changing customer expectations and enter high-growth nature-aligned markets. This strategic pivot is more than risk mitigation - it positions businesses to lead in a rapidly expanding global transition toward a nature-positive economy.

7. Nature enhances asset value

Nature-related factors are material to asset performance and valuation. Assets, particularly those in proximity to natural areas, that proactively integrate ecological considerations such as landscape architecture and water-sensitive design, can enhance financial performance and lower maintenance costs.

Conversely, assets located in areas of high biodiversity risk or those dependent on degrading ecosystems may face declining value, insurability challenges, or become stranded due to shifting regulations and investor expectations.

Robust nature-focused due diligence is becoming essential. Leading firms are now incorporating ecosystem data into site selection, feasibility studies and capital allocation processes to identify and mitigate exposure to nature-related risks. This enables more accurate risk pricing and supports resilient, future-fit investment strategies.

Nature is no longer a peripheral consideration - it is a fundamental input into the due diligence process.

8. Biodiversity provides resilience in a changing world

Nature-related risks are systemic, interconnected, and escalating. Climate change, biodiversity loss and land-use change compound each other, creating cascading impacts across sectors such as infrastructure, agriculture, finance and public health.

Organisations that approach these risks in isolation risk being unprepared. Building strategic resilience requires embedding nature-related tipping points, resource constraints and ecosystem degradation into long-term planning and risk management.

Leading firms are already factoring ecological thresholds into scenario analysis and investment decisions. Integrating nature into strategic planning is no longer optional - it has become a defining trait of resilient, forward-looking leadership.

Moving forward – from environmental concern to value driver

The message is clear: nature is not an externality - it is a financial and strategic imperative. Biodiversity loss directly influences business performance, and the integration of nature into corporate strategy is quickly becoming a core expectation from investors, regulators and consumers.

Companies that ignore this shift risk eroding their value, facing legal and financial penalties and missing out on innovation and growth opportunities. On the other hand, nature-aligned business models and those that embed nature into decision making - across governance, finance, procurement and innovation - build their competitive advantage and improve their economic resilience.

In a world where biodiversity loss is increasingly seen as a systemic economic threat, the question is no longer should businesses care about nature - it’s how fast, how credibly and how strategically they will respond.

Boardrooms that bring biodiversity into focus today will be tomorrow’s market leaders.