An independent report commissioned by UK Treasury has concluded that "transformative" change is needed to our economic models and our economies as a whole if we are to avoid catastrophic loss of biodiversity. The report, led by Prof Sir Partha Dasgupta of the University of Cambridge, provides a detailed and thorough economic analysis of the value of ecology and the requirement to hard-wire natural capital into our economics.
It is important that this body of work was commissioned by the UK Treasury and has been led by a leading economist: the case for change is made in financial terms, not environmental ones. This is not a report that concludes there is value in nature for nature's sake: it concludes that successful economies depend on it.
Lots will no doubt be written about the economics and the policies as we chew over the (voluminous) detail in the report. From a legal perspective, I predict the following:
- This report will drive market intervention through regulatory action: the only question is timeframes.
- The ESG agenda will get a further injection of momentum: in any major transformation there will be winners and losers, and for good financial returns the market will want to back the future winners.
- There are real risks (legal, financial, reputational) that businesses will need to managed, both now and for the transformation, arising out of the (often hidden) impact on biodiversity.
Our economies will (be made to) transform for two reasons: climate change and biodiversity loss. We are already in a transformation to achieve a low (and ultimately net zero) economy in the UK, and the Dasgupta Report on the economics of biodiversity will add to the pace of change. As with any period of rapid change, there are lots of opportunities for the nimble and agile, but also very real threats. Managing those risks is an essential part of current (and future) business success.
Our unsustainable engagement with Nature is endangering the prosperity of current and future generations