Biodiversity as an emerging sustainability topic
The importance of biodiversity
Countries around the world depend on a range of vital natural services – known as biodiversity and ecosystem services (BES) – to help maintain the health and stability of their communities and economies. These include, for example, water provision, food security and the regulation of air quality. In fact, 55% of global GDP is dependent on intact ecosystems. However, a recent study published by Swiss Re Institute revealed a serious decline in biodiversity and ecosystem services, affecting both developing and advanced economies.
As re/insurers, understanding the extent and impact of this decline and the associated risks is key to minimising further damage. For example, trees protect coastal areas and riversides from erosion. In areas where forests disappear, floods and landslides are more frequent, causing higher property losses. Conversely, measures to preserve biodiversity, such as reforestation, reduce the risk of damage from natural catastrophes at a lower cost than the financial losses caused by storms or flooding. Preserving our natural assets also enhances our quality of life and provides revenue streams that should be protected.
The COVID-19 pandemic has further highlighted one of the most devastating consequences of biodiversity loss. Deforestation and other human activities encroach on the world’s ecosystems, creating pathways that facilitate the transmission of zoonotic diseases from our rainforests to environments inhabited by humans.1 Preserving ecosystems is therefore critical to preventing pandemics.
The Biodiversity and Ecosystem Services Index
One thing is clear – maintaining a healthy balance between humans and nature will remain a key issue going forward. For this reason, Swiss Re has developed the Biodiversity and Ecosystem Services (BES) Index, which identifies the economic sectors and countries most exposed to biodiversity end ecosystem decline. The index enables businesses and governments to factor biodiversity into their economic decisions. The index also allows re/insurers to incorporate BES data into their risk assessment, thus helping to preserve BES, which are vital to societies’ resilience. To learn more about the BES Index, visit our website.
Nature has proven its ability to self-heal, capture carbon and reduce the impact of weather-related disasters. In turn, man-made solutions that mimic nature or rely on its support can help societies prevent, mitigate and recover from the impacts of climate change and natural disasters. And insurance can play an important role in protecting natural assets and enabling the development and scaling of such “nature-based solutions”, ultimately helping to shape a low-carbon future and build more sustainable economies.
1 IPBES (2020). Workshop Report on Biodiversity and Pandemics of the Intergovernmental Platform on Biodiversity and Ecosystem Services. IPBES secretariat, Bonn, Germany.