ESG investing

Putting a price on nature

Healthy biodiversity and nature is pivotal to foster dynamic markets and a robust global economy.

Healthy biodiversity and a robust natural world are necessary to sustaining life on earth. Less discussed is the pivotal role healthy ecosystems and nature play in fostering a dynamic and sustainable global economy, and a stable geopolitical landscape.

In economic terms, biodiversity is valued at an estimated USD 44 trillion, roughly twice the GDP of the US1, and close to half of the world’s GDP.2 Biodiversity is also a fundamental building block of industry and manufacturing – any impact to nature has a flow on effect into the global economy. According to the World Bank, close to one third of the wealth of low-income countries comes from their “natural capital”. In addition, in 2020, the World Economic Forum noted that the largest economies have the highest absolute amounts of GDP in nature-dependent sectors: China (USD 2.7 trillion); EU (USD 2.4 trillion); and the US (USD 2.1 trillion) despite having lower direct exposure to nature loss.3

Unfortunately, nature is facing dire challenges, with only 23 percent of species and 16 percent of habitats under the EU Nature Directives are considered in good health4 and we’re currently facing what the UN refers to as a “nature apocalypse”.5

The markets and the larger financial world are starting to take notice: in the last few years, a number of initiatives have been planned and enacted on both a corporate and supra-national level that aim to preserve nature and natural resources, without which there can be no functional economy or society.

As awareness grows about how we’ve been neglecting to price in the true cost of nature, it’s inevitable that investor attention is switching to rethinking how we’ve included nature in our concepts of economics, financial markets, the value we’ve attached to it, and the language we’ve been using to frame and contain this. Let’s take a look at three terms investors need to know: natural capital, nature loss, and biodiversity loss.

Natural capital

Natural capital is the term used to define the world’s stock of natural resources, which includes geology, soils, air, water, and all living organisms. Individually and collectively, we rely on nature to provide us with items such as water, food, health, energy, and raw materials. Directly or indirectly, nature feeds into every aspect of life.

At a societal and economic level, assets derived from nature form the foundation of business activities to produce and transport goods and services. The degree of functionality of ecosystems has a strong impact on the financial markets and the economy. For example, the overuse of forests and rivers can lead to a decline in timber availability or fish stocks, affecting companies or countries reliant on these resources. Why then, given its fundamental importance, has nature been historically overlooked by the markets? Part of the answer lies with the mythical view of many aspects of nature, like fresh water, as infinite.

Nature currently faces many challenges and ignoring them may bring great disruption to life as we know it.


Nature loss

Nature loss refers to degradation of Earth’s land and ecosystems and has become a systemic risk for the global economy.6 It encompasses the loss of biodiversity and ecosystems services, habitats, natural resources such as freshwater, quality of air, oceans, land, etc.

We are reaching environmental tipping points that can disrupt the state of natural processes and systems within which humanity can continue to develop and thrive for generations to come.  The balance of these systems is essential to support regulation of Earth’s stability and resilience and they are being put to stress levels not seen before.7

The scale of human impact, including deforestation, pollution, and climate change, is immense. The rapid loss of biodiversity is affecting nature’s ability to recover. Human activity misuse of natural capital is leading to land degradation and biodiversity loss at a more rapid pace than nature can recover.

Many scientists refer to the sixth extinction event led primarily by human activity.8


Biodiversity loss

Biodiversity is the variety of life on Earth, in all its forms, from genes and bacteria to entire ecosystems such as forests or coral reefs. The biodiversity we see today is the result of 4.5 billion years of evolution, and is increasingly influenced by humans. The recent decline in biodiversity is due to a number of factors, including rapid and over- exploitation of natural resources, changes in sea and land use), climate change, and invasive species.9 For example, in the last decade alone, 26 percent of global tree cover loss was linked to monocultural production of just seven agricultural commodities: cattle, palm oil, soy, cocoa, rubber, coffee and wood fibre.10

Biodiversity is one component of nature, but it is essential for the processes that support all life on Earth, including the state of assets like air and water quality. Therefore, it is intrinsically linked with the state of nature.

For example, our ability to mitigate climate change risks is directly linked to ecosystems resilience. For example, nature-based solutions to fight climate change such as planting trees cannot deliver its full range of benefits in carbon storage if the health of ecosystems are compromised.11

The loss of biodiversity can range from reduction of diversity at genetic levels to collapse of entire ecosystems and therefore there is still much we do not know about measuring the state of biodiversity.


"Seeking to deliver future-proof investment solutions must involve the consideration of biodiversity and natural capital at large."

Biodiversity in numbers

Reasons why biodiversity stepped into the spotlight for investors in 2023.


decline of freshwater species since 1970.12


decline in the global population of mammals, fish, birds, reptiles, and amphibians since 1970.13


of the planet’s surface is covered by fresh water.14


of global food production reliant on bees and natural pollination.15


of conflicts linked to natural resources.16

On nature and art

Art has a special place at Vontobel. Our collection gathers works from international artists created from the year 2000 onwards and focuses on the presentation of humanity and our actions in the present. As a result of our belief in the importance of biodiversity and nature to our society and economy, we’re highlighting our sponsorship of artists that place this theme at the center of their work.


Art talks

Watch Georgina Casparis, Head and Curator Art Vontobel, in conversation with renowned Swiss curator Mirjam Varadnis, on nature and art and its role in our world today.


Gaze into nature with Vontobel

In this special series, the artists tell the story of their work in their own words.


Art Vontobel





11 (Technical summary report IPCC climate change 2022: impacts, adaptation, and vulnerability)