Financing nature's destruction — and a way to flip the logic

$7.3 trillion.

That is the scale of global financial flows linked to direct negative impacts on nature – including $2.4 trillion in public subsidies.

By comparison, $220 billion was directed toward conservation and restoration.

The message from last week’s IPBES Business and Biodiversity Assessment is clear: we are actively financing nature’s destruction.

For the financial sector, shifting these capital flows is a prudential necessity.

Clean water, pollination, raw materials, weather regulation… These are the invisible scaffolding of our economy. Ecosystem collapse will challenge food security, disrupt supply chains, and undermine the predictability that financial markets depend on.

But as long as it remains more profitable to destroy ecosystems than to preserve them, short-termist "economic rationality" will continue to obstruct corrective action. The failure lies in our regulatory and financial frameworks.

Climate change and biodiversity loss are compounding systemic risks. Because all businesses contribute to this disruption, all businesses must be part of the solution. The incentives must change.

WWF Switzerland furthered this point from the insurance side: climate change and nature loss are undermining insurability and widening the protection gap.

Climate change acts as a threat multiplier, while nature loss strips away our capacity for adaptation. In a vicious circle, every catastrophe pushes ecosystems closer to the brink.

Storms, droughts, floods, and wildfires cost EU countries over €208 billion between 2021 and 2024. Floods alone accounted for nearly half of that. Meanwhile, land artificialization increases by 1,500 sq. km each year and only 6% of EU wetlands are in good condition (European Environment Agency).

The insurance sector has unique leverage. It can demand better data and shift capital toward resilient, regenerative models. This point is gaining traction; it should now evolve into systemic action.

The fundemental aim must be to redirecting capital away from nature-negative activities and phase out finance for fossil-fuel expansion. Otherwise, we are quite literally funding the risk we are trying to insure against.

With the IPBES assessment, our toolbox has grown. The authors lay out more than 100 concrete actions to create an enabling environment and align economic decision-making with environmental reality.

As Maarten van Aalst recently noted: "Adaptation is a daunting task, but at the same time quite a doable task. It’s not rocket science."

It boils down to political choices. True "simplification" should involve creating frameworks that help businesses manage complexity. Not masking that complexity in the hope it goes away.

Let’s transform our businesses before the foundations they stand on are washed away.