Biodiversity and the Economy
Birds of a Feather

Our dependence on nature is dangerously invisible. While 50% of global GDP and 72% of European businesses depend directly on biodiversity, the consequences of its erosion are still widely unknown and persistently underestimated.

Given the alarming acceleration in the loss of natural resources, a collective awareness by businesses, public authorities and citizens is essential to enable a paradigm shift. The challenge is all the more critical in that biodiversity, often overshadowed by the climate crisis, is perceived as a constraint, whereas in fact it represents an opportunity for strategic development. The implementation of the European CSRD directive represents a first step forward, requiring companies to better integrate biodiversity-related risks and opportunities into their value chain. Despite the efforts and real progress made, it remains insufficient. Public and private entities wishing to take action are often found at a loss when faced with the multiplicity of factors they need to address and the actions they can undertake. The key is to channel the various approaches available to actors at different levels. A legislative framework, combined with a collective governance, must be the driving force behind a transformation towards more sustainable and resilient economic models.

In that respect, Institut Montaigne has carried out an in-depth analysis of the co-dependence between biodiversity and the economy. With over a 100 hearings with economic, public and civil society players, this report aims to identify the concrete limits of measures already in place. It also provides six recommendations to encourage the integration of biodiversity into economic and societal models on a local, national and international level.

One million species are threatened with extinction in the coming decades. 85% of the surface area of wetlands has disappeared, even though they are the most productive environments on the planet in terms of biological diversity, and vital for the survival of humanity.

Today, five major pressures exerted by human activities are endangering biodiversity: changes in land use, overexploitation of resources, pollution, climate change and invasive alien species. These pressures interact and aggravate the situation, creating a real urgency to act to preserve biodiversity.

All too often relegated to second place behind the climate crisis, biodiversity nevertheless plays a crucial role in the fight against climate change by contributing directly to ecosystem resilience, facilitating carbon storage, and supporting ecosystem services.

Biodiversity is essential to the functioning of many economic activities and is crucial to ensure a sustainable and competitive development. On a global scale, its ecosystem services are valued at between 125,000 and 140,000 billion dollars. In France, these ecosystems support key economic sectors —agriculture, livestock farming, the timber industry, fishing, shellfish farming, ecotourism, fishing gear and hunting equipment— representing over 80 billion euros in revenue and 1.5 million jobs. However, reducing biodiversity to a simple monetary value is problematic, as ecosystems are dynamic and interconnected, with an ethical dimension that must be taken into account.

Understanding the stakes of biodiversity is an essential prerequisite for action, but companies are finding it difficult to fully grasp them, notably due to the absence of a single indicator, similar to the CO2-equivalent metrics for the climate. According to the FRB, 72% of companies believe it is necessary to define such indicators to steer their actions in favor of biodiversity. This involves mapping out issues, dependencies and risks to incorporate into their decisions. To achieve this, 3 challenges need to be tackled:

- Measuring the biodiversity footprint: it is essential to take into account the impacts of activities throughout the company's value chain. This assessment must reflect both local and global issues, as biodiversity is influenced by dynamics specific to each region.

- Overcoming the complexity of international trade: modeling biodiversity impacts is complicated by the increase in international trade and the import of resources derived from environmental degradation. For example, imported deforestation accounts for between 20% and 40% of wood entering the European market. This phenomenon is closely linked to environmental crime, which has been growing by 5% to 7% a year since 2016.

- Choosing the right tools: many tools exist for assessing impacts on biodiversity, and the challenge for companies is to identify the one that best suits their activities. However, the absence of a single indicator, such as the CO2-equivalent metric for climate, should not dissuade them from carrying out an in-depth analysis of their dependencies and pressures on biodiversity.

When it comes to governments, biodiversity issues have been taken into account tardily. The lack of synergy between climate actions and those dedicated to biodiversity sometimes leads to counterproductive decisions, revealing a blind spot in environmental policies. This fragmented approach, shared by private entities, should give way to a more holistic vision. It is up to the government to create a framework favorable to innovation and experimentation, while demonstrating the political courage necessary to adopt a long-term perspective.

Environmental issues go beyond the scope of management and corporate activities, and require an integrated, collective and massive response that must be overseen by the government. Through ambitious economic diplomacy and more coherent environmental management, we need to reinvent our development models to make the preservation of biodiversity a strategic priority.

To this end, the Institut Montaigne has put forward 6 recommendations designed to meet 3 major objectives:

Recommendation 1: Establish scientifically based definitions of key biodiversity concepts, to build a common European framework and promote its adoption at an international level.

Recommendation 2: Coordinate the distribution of responsibilities between the public and private sectors on an ecological territories level

Recommandation 3: Shift the value paradigm by introducing biodiversity as an economic driver of prosperity and by focusing on innovation.

Recommandation 4: Assign financial value to commitments favoring biodiversity.

Recommandation 5: Promote fairness in biodiversity conservation measures to ensure their acceptability.

Recommandation 6: Raise awareness and mobilize stakeholders to preserve biodiversity.

A French version of the report and a summary in Spanish available below:

▶ Biodiversité et économie : les inséparables

▶ Biodiversidad y economía : los inseparables