UN warns biodiversity loss poses greater business risk than climate change

The threat to businesses arising from unchecked biodiversity loss is larger and more immediate than that presented by climate change.

That is the stark conclusion of a long-anticipated UN-backed report to be launched in London later today, which warns that the vast majority of firms are ignoring risks associated with biodiversity loss and environmental degradation, despite the fact that they pose a serious and growing threat to their operations.

The two year study from the UN Environment Programmme, The Economics of Ecosystems and Biodiversity (TEEB), will show that the annual economic impact of biodiversity loss stands at between $2 trillion (£1.3 trillion) and $4.5 trillion, equating to up to 7.5 per cent of global gross domestic product.

It argues that contamination of water supplies, the loss of productive land through soil erosion and drought, and disruption to supply chains caused by deforestation and overfishing all result in multibillion-dollar costs that are largely ignored by the current global economic system.

A section of the report, contributed by consultancy giant PricewaterhouseCoopers (PwC), also says that fewer than one in five firms see biodiversity as an important business issue, while just two of the world's largest 100 companies manage it as a strategic risk.

Environment secretary Caroline Spelman is scheduled to speak at the launch of the report, and is expected to argue that there is a strong economic case for businesses to take action to limit activities that damage biodiversity.

She will also highlight the recent experience of BP, which has seen its share price halved as a result of the oil spill in the Gulf of Mexico. "The real impact on the local economy, wildlife and marine health may not be fully known for years," she is expected to say. "What's bad for biodiversity is bad for business."

Report lead author Pavan Sukhdev is also expected to argue that governments must play a more proactive role in forcing businesses to address biodiversity loss.

In an interview with the Guardian newspaper ahead of the launch, he argued that modern businesses had become "soulless corporations" unchecked by government regulation.

"We have created a soulless corporation that does not have any innate reason to be ethical about anything," he said. "The purpose of a corporation is to be selfish. That is law. So it's up to society, and its leaders and thinkers, to design the checks and balances that are needed to ensure that the corporation does not simply become cancerous, and that's something that sometimes we do and sometimes we really don't."