A fifth of countries worldwide are at risk from ecosystem collapse due to a decline in biodiversity, according to a new Swiss Re report.
Countries around the world are reliant on services that are based on their natural ecosystems, according to the reinsurer. Biodiversity and ecosystem services (BES) include necessities like food provision, water security and air quality that are vital to the stability of communities and economies. According to the firm, 55% of global GDP – equal to $41.7 trillion – is dependent on high-functioning BES.
However, 20% of countries globally are at risk of their ecosystems collapsing due to a decline in biodiversity, according to a study based on Swiss Re’s new Biodiversity and Ecosystem Services Index. The research found that both developing and advanced economies are at risk, while developing countries that have a heavy dependence on agricultural sectors are especially susceptible to BES shocks.
“Among G20 economies, South Africa and Australia top the rankings of fragile BES,” Swiss Re said. “The well-known impact of water scarcity is a driver for these countries, alongside factors such as coastal protection and pollination.”
Brazil and Indonesia have the highest percentage of intact ecosystems within the G20, but those countries’ strong economic dependence on natural resources highlights the importance of sustainable development and conservation, Swiss Re said.
An upcoming United Nations summit on biodiversity, set for September 30, is expected to call for “urgent action on biodiversity and sustainable development,” since global efforts to improve BES have fallen below UN targets to halt biodiversity loss. Swiss Re developed its BES Index to enable governments and business leaders to compare and benchmark the state of local ecosystems that underpin their economies. Insurers can also use the data to develop insurance products that protect communities at risk from poor-functioning BES.
“There is a clear need to assess the state of ecosystems so that the global community can minimize further negative impact on economies across the world,” said Christian Mumenthaler, group CEO of Swiss Re. “This important piece of work provides a data-driven foundation for understanding the economic risks of deteriorating biodiversity and ecosystems. In turn, we can inform governmental decision-making to help improve ecosystem restoration and preservation. We can also support corporations and investors to fortify themselves against environmental shocks. Armed with this information, we can also ensure the provision of stronger insurance services.”