As last year's news headlines have made all too clear, nature is in a state of emergency.

In May following the most comprehensive scientific investigation into the planet’s health, a report (PDF) by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) sounded the alarm that 1 million species face extinction due to human activity. As IPBES chair Sir Robert Watson noted: "We are eroding the very foundations of our economies, livelihoods, food security, health and quality of life worldwide."

The wake-up call on nature loss is highlighted in this year’s World Economic Forum Global Risks Report (GRR), where biodiversity loss is, for the first year, ranked as one of the top five global risks in terms of likelihood and impact in the next 10 years.

In boardrooms, investment and risk committees, however, nature loss still appears to be largely a hidden risk. This needs to change, and quickly.

Crossing the ecological limits of our planet will directly affect economic activities and businesses that depend on and have an impact on nature. Insufficient accounting for these risks could have unintended consequences, such as short- or long-term risk mispricing, inadequate capital buffers and, in extreme cases, the potential for stranded assets. For example, between $235 billion and $577 billion of global crop output is at risk annually from pollinator loss.

In recent years we have seen how governments, regulators, asset owners and managers, and — increasingly — businesses, have recognized that climate change poses a systemic financial risk. It is time for this recognition to be extended to the risk posed by nature loss.

Four key actions for a business response to nature risk

  1. Apply governance for nature-related risks and opportunities
  2. Incorporate nature-related risks and opportunities into the organization’s strategy and financial planning
  3. Identify, assess and manage nature-related risks as part of enterprise risk management processes
  4. Identify and track nature-related risk metrics and targets

Read the full article about nature loss by Celine Herweijer, Samra Mariam, and Will Evison at GreenBiz.