Biodiversity Loss in 2026: Why It's the Next Climate Crisis for Business

In October 2025, the world's leading ecologists published a paper in Science that described what they called the "insect apocalypse" in quantitative terms for the first time. Drawing on data from 166 long-term monitoring sites across 41 countries, they found that flying insect biomass had declined by 76% in protected areas over the preceding 27 years. In agricultural landscapes, the decline was 82%. The implications are staggering: insects pollinate 75% of the world's food crops, cycle nutrients through soil, control pest populations, and form the base of food chains that sustain birds, fish, reptiles, and mammals. The economic value of insect pollination alone is estimated at $577 billion annually. The insects are disappearing, and most of the economic system has not yet noticed.

Biodiversity loss has operated in climate change's shadow for two decades. While carbon emissions, temperature targets, and energy transitions have dominated business and policy discussions, the parallel crisis of collapsing ecosystems has received a fraction of the attention — despite posing risks of comparable magnitude. The numbers are stark. The IPBES Global Assessment estimates that 1 million plant and animal species are threatened with extinction, many within decades — a rate 100-1,000 times higher than the natural background extinction rate. The Living Planet Index, which tracks vertebrate populations globally, has declined 69% since 1970. The IUCN Red List Index — the most authoritative measure of aggregate extinction risk — continues to accelerate downward.

But 2026 marks an inflection point for biodiversity in the corporate world, driven by three converging forces. First, the Kunming-Montreal Global Biodiversity Framework (GBF), adopted in December 2022, established a binding international commitment to protect 30% of land and ocean by 2030 and to require businesses to assess and disclose their nature-related dependencies and impacts. Second, the Taskforce on Nature-related Financial Disclosures (TNFD) has been adopted by over 1,000 organizations and is being integrated into mandatory reporting requirements in the EU, UK, and Japan. Third, financial institutions are beginning to price biodiversity risk — with implications for lending, insurance, and investment decisions that will reach every sector of the economy. This guide examines the scale of the biodiversity crisis, its specific relevance to business operations and supply chains, the emerging regulatory landscape, and the practical steps companies should take now.

Related reading: The Biodiversity Business Case: Why SDG 15 Matters for Your Bottom Line | Global Water Bankruptcy: What the UN's 2026 Warning Means for Business | Ocean Plastic Crisis 2026: The $19 Billion Problem and What Businesses Can Do

The State of Global Biodiversity in 2026

The data on biodiversity loss is unambiguous. Every major indicator is moving in the wrong direction, though the rate of decline varies by ecosystem and region.

Species loss: The IUCN Red List has assessed over 157,000 species as of 2026, classifying 44,000+ as threatened with extinction. Among vertebrates, 41% of amphibians, 37% of sharks and rays, 33% of reef-building corals, 27% of mammals, and 13% of birds are threatened. Plant assessments are less complete but suggest 40% of plant species face extinction risk. Freshwater species have declined faster than any other group — freshwater vertebrate populations have fallen 83% since 1970, driven by habitat destruction, pollution, water extraction, and invasive species.

Environment degradation: Approximately 75% of the Earth's land surface has been significantly altered by human activity. Wetlands have declined by 85% since 1700. Coral reefs — which support 25% of all marine species — are experiencing unprecedented mass bleaching; the 2023-2025 bleaching event affected 77% of the world's reef areas. Tropical forests, which harbor more than half of all terrestrial species, continue to be lost at approximately 10 million hectares per year, despite pledges at COP26 to end deforestation by 2030. Soil degradation affects 40% of the world's land area, reducing agricultural productivity and releasing stored carbon.

Drivers: The five direct drivers of biodiversity loss, ranked by impact, are: land-use change (agriculture, urbanization, and infrastructure converting natural habitats), direct exploitation (overfishing, hunting, logging), climate change (shifting habitats, extreme events, ocean warming and acidification), pollution (nitrogen and phosphorus loading, pesticides, plastics), and invasive alien species (displacing native species across island and continental ecosystems). These drivers are not independent — they interact and compound each other. Climate change, for instance, intensifies the impact of habitat fragmentation by making it harder for species to migrate to suitable conditions.

Why Biodiversity Is a Material Financial Risk

The World Economic Forum's 2025 Global Risks Report ranked biodiversity loss as the third most severe risk over the next decade, behind only climate action failure and extreme weather events. The economic case is straightforward: $44 trillion of economic value generation — more than half of global GDP — is moderately or highly dependent on nature.

Physical risks: Biodiversity loss directly degrades system services that businesses rely on. Pollinator decline threatens $577 billion in annual crop production. Soil degradation reduces agricultural yields by an estimated $400 billion annually. Loss of mangroves and coral reefs removes natural coastal protection worth $65 billion per year. Declining fisheries threaten the livelihoods and food security of 3 billion people who depend on marine and coastal resources. These are not hypothetical scenarios — they are measurable economic impacts occurring now.

Transition risks: As governments implement the Kunming-Montreal framework and associated regulations, businesses face new compliance costs, restricted access to resources, and potential stranded assets. The EU Deforestation Regulation, which took full effect in 2025, requires companies to demonstrate that commodities (soy, palm oil, beef, coffee, cocoa, rubber, and wood) imported into the EU were not produced on land deforested after December 2020. Companies that cannot provide due diligence documentation face market access restrictions and fines of up to 4% of EU-wide turnover. Similar deforestation due diligence laws are being developed in the UK and under consideration in the US.

Litigation risks: Climate litigation has grown dramatically over the past decade, with over 2,500 climate-related cases filed worldwide. Biodiversity litigation is following the same trajectory but earlier in its development. Early cases include lawsuits against companies for deforestation in their supply chains, challenges to government permits that fail to adequately assess biodiversity impacts, and shareholder actions against boards for inadequate nature-related risk management.

The TNFD Framework: What It Requires

The Taskforce on Nature-related Financial Disclosures published its final recommendations in September 2023, providing a framework for organizations to identify, assess, manage, and disclose nature-related dependencies, impacts, risks, and opportunities. The framework is structured around four pillars that mirror the TCFD (climate disclosure) approach: governance (how the organization oversees nature-related issues), strategy (how nature-related issues affect the organization's business model), risk management (how the organization identifies and manages nature-related risks), and metrics and targets (what the organization measures and what targets it sets).

TNFD adoption is accelerating rapidly. Over 1,000 organizations committed to report against the framework by the end of 2025 — including major financial institutions (BNP Paribas, HSBC, AXA), consumer goods companies (Nestle, Unilever), and extractive industry firms (BHP, GSK). The EU's Corporate Sustainability Reporting Directive (CSRD) incorporates biodiversity and system reporting requirements aligned with TNFD. Japan has mandated TNFD-aligned disclosures for listed companies starting in 2026. The UK's Sustainability Disclosure Standards are expected to incorporate nature-related requirements.

The TNFD's LEAP approach — Locate (where your nature interfaces are), Evaluate (your dependencies and impacts), Assess (your nature-related risks and opportunities), and Prepare (to respond and report) — provides a practical methodology for companies to work through. The "Locate" step is critical and often overlooked: companies must identify the specific geographic locations where their operations and value chains interact with nature, because biodiversity risks are inherently location-specific. A palm oil supply chain in Borneo faces different biodiversity risks than one in West Africa, even though both involve deforestation pressure.

The Kunming-Montreal Global Biodiversity Framework

Adopted at COP15 in December 2022, the GBF sets 23 targets to be achieved by 2030. The most consequential for businesses are Target 15 (requiring large and transnational companies to assess and disclose their biodiversity dependencies and impacts), Target 3 (protecting 30% of land, freshwater, and ocean by 2030), Target 7 (reducing pollution risks from pesticides and highly hazardous chemicals by at least half), and Target 18 (eliminating or reforming $500 billion per year in subsidies that are harmful to biodiversity).

Implementation is underway but uneven. National Biodiversity Strategies and Action Plans (NBSAPs) — the mechanism through which countries translate GBF targets into domestic policy — were due by COP16 in October 2024. As of early 2026, approximately 80 countries have submitted updated NBSAPs, with wide variation in ambition and specificity. The EU Biodiversity Strategy for 2030, which predates the GBF, aligns closely with its targets and adds EU-specific requirements including legally binding nature restoration targets (the Nature Restoration Law adopted in 2024).

Supply Chain Biodiversity Risks: Sector by Sector

Food and agriculture: The most exposed sector. Agriculture is the single largest driver of biodiversity loss (responsible for 70% of terrestrial biodiversity decline) and simultaneously the most dependent on system services. Specific risks include pollinator-dependent crops (almonds, apples, berries, coffee, cocoa) facing reduced yields as pollinator populations decline, soil degradation reducing crop productivity on 33% of global farmland, water stress intensifying as watershed ecosystems degrade, and deforestation-linked commodity supply chains (soy, palm oil, beef, cocoa) facing regulatory and reputational risks.

Fashion and textiles: Cotton production (which uses 2.5% of global arable land and 6% of global pesticide use), leather supply chains linked to cattle ranching and deforestation, and synthetic fibers contributing to microplastic pollution all create biodiversity risks. The industry's water footprint is substantial — producing a single cotton t-shirt requires approximately 2,700 liters of water.

Pharmaceuticals: An estimated 50% of modern pharmaceuticals are derived from or inspired by natural compounds. Loss of biodiversity reduces the pool of potential drug discoveries — the ocean alone is estimated to harbor millions of undiscovered species with potential pharmaceutical applications. Additionally, antibiotic resistance (exacerbated by pharmaceutical pollution in waterways) and the emergence of zoonotic diseases (linked to habitat destruction and wildlife trade) create direct industry risks.

Financial services: Banks, insurers, and asset managers face nature-related risks through their lending and investment portfolios. The Dutch central bank (DNB) found that Dutch financial institutions had EUR 510 billion in exposure to companies highly dependent on system services — representing 36% of total assets. The Network for Greening the Financial System (NGFS) is developing nature-related scenarios for financial supervisors, following the model established for climate risk.

Construction and infrastructure: Land-use change for construction is a primary driver of habitat loss. The sector is also highly dependent on raw materials (sand, timber, metals, water) whose extraction causes biodiversity impacts. Regulatory requirements for biodiversity impact assessments, net gain requirements (the UK requires 10% biodiversity net gain on all new developments), and environmental permitting delays create project timeline and cost risks.

Regenerative Agriculture: The Business Opportunity

Regenerative agriculture — farming practices that actively restore soil health, increase biodiversity, and sequester carbon — represents one of the largest business opportunities at the intersection of food production and biodiversity conservation.

The regenerative agriculture market was valued at $15.8 billion in 2025 and is projected to reach $38 billion by 2030. Growth is driven by consumer demand for sustainably produced food, corporate supply chain commitments, carbon credit revenue from soil carbon sequestration, and the fundamental economic advantage of reduced input costs (regenerative systems use 40-70% less synthetic fertilizer and pesticide).

Major food companies are investing heavily. General Mills has committed to advancing regenerative practices on 1 million acres by 2030. PepsiCo has pledged to spread regenerative practices across 7 million acres. Danone's regenerative agriculture program covers 500,000 hectares across its dairy and crop supply chains. Nestle invested $1.2 billion in its regenerative agriculture program, providing premium payments to farmers who adopt certified practices.

For farmers, the transition to regenerative practices involves a 3-5 year period during which yields may temporarily decline as soil biology rebuilds. During this transition, premium prices from committed buyers, cover crop seed cost-sharing programs, and emerging soil carbon credit revenue help offset the economic risk. After the transition period, regenerative systems typically match conventional yields while producing at lower cost due to reduced input requirements.

Nature-Based Solutions: What Works at Scale

Nature-based solutions (NbS) — actions that protect, sustainably manage, or restore natural or modified ecosystems to address societal challenges — provide simultaneous benefits for biodiversity, climate, and human well-being.

Forest restoration: The Bonn Challenge, a global effort to restore 350 million hectares of degraded and deforested land by 2030, has commitments covering 210 million hectares. Restoration costs $1,500-4,000 per hectare and generates multiple revenue streams: timber, non-timber forest products, carbon credits ($5-50 per tonne of CO2), and biodiversity credits. China's Grain-for-Green Program has restored 28 million hectares since 1999. Ethiopia planted 350 million trees in a single day in 2019 as part of its Green Legacy Initiative.

Wetland restoration: Wetlands are the most productive ecosystems on Earth and among the most degraded. Restoration of coastal wetlands (mangroves, salt marshes) provides carbon sequestration at 3-5 times the rate of terrestrial forests ("blue carbon"), coastal storm protection valued at $65 billion annually, fisheries habitat, and water purification. The cost-benefit ratio of wetland restoration is among the highest of any conservation intervention.

Urban biodiversity: Cities are increasingly recognizing biodiversity as infrastructure. Singapore's City in Nature vision integrates green corridors, rooftop gardens, and vertical forests throughout the urban fabric. Melbourne's Urban Forest Strategy is planting 3,000 trees annually to counteract heat island effects. London's National Park City designation promotes biodiversity-friendly land management across the metropolitan area. For businesses, investing in biodiversity on corporate campuses (native plantings, pollinator habitats, green roofs) provides employee well-being benefits alongside ecological value.

A 12-Month Action Plan for Businesses

Months 1-3: Assess. Conduct a preliminary biodiversity risk screening using tools like the ENCORE database (Exploring Natural Capital Opportunities, Risks and Exposure), which maps the dependencies and impacts of business sectors on system services. Identify your highest-risk operations and supply chain touchpoints. Map the geographic locations where your value chain intersects with sensitive or degraded ecosystems.

Months 4-6: Measure. Begin quantifying your nature footprint using metrics aligned with the TNFD framework. Key metrics include land use and land-use change associated with your operations and supply chain, water consumption and pollution in water-stressed basins, dependency on pollination and soil system services, and exposure to deforestation-linked commodities. The Science Based Targets Network (SBTN) provides guidance on setting science-based targets for nature alongside climate targets.

Months 7-9: Act. Add priority actions identified through the assessment: eliminate deforestation from supply chains (using satellite monitoring and certification systems), transition agricultural supply chains toward regenerative practices, reduce pesticide and pollution loads, invest in system restoration at or near operational sites, and engage suppliers on biodiversity performance.

Months 10-12: Disclose. Prepare your first TNFD-aligned disclosure. Even voluntary early disclosure signals leadership to investors and regulators. Report your nature-related governance structures, the results of your LEAP assessment, the actions you have taken, and the metrics and targets you are tracking. Set targets for the following year with more ambitious commitments.

Biodiversity loss is not a distant environmental concern. It is a present financial risk that is becoming a regulatory requirement. The companies that assess their nature dependencies, measure their impacts, and act to reduce their biodiversity footprint now will be better positioned than those that wait for mandatory requirements to force their hand. The parallel with climate is instructive: companies that began measuring and reducing emissions in the 2010s are now years ahead of competitors scrambling to comply with disclosure mandates. On biodiversity, the window for proactive leadership is open but closing. The data is clear, the frameworks exist, and the regulatory direction is set. The question is whether your organization will lead or follow.