European Central Bank research indicates ecosystem decline could threaten a broad share of euro-area firms and expose lenders to related risks, tying biodiversity loss to economic resilience as governments review conservation goals.
At COP17 in Yerevan on Monday, European Central Bank Executive Board member and Supervisory Board Vice Chair Frank Elderson delivered a keynote at Finance and Biodiversity Day. “Now we need to act,” he said.
An ECB Economic Bulletin analysis published in 2024 found that 72% of the euro area’s 4.2 million nonfinancial companies critically rely on at least one ecosystem service. The bank said deterioration in those services could harm the affected firms’ economic performance. Using December 2021 data, the ECB also found that companies with this kind of reliance received 75% of corporate loans across the euro area.
Many ecosystem services can be hard to price. The ECB says markets fail to capture their full value because they are public goods, which can leave them out of decisions made by companies, lenders and policymakers.
A separate ECB paper in 2025 modeled a drought with a 100-year return period. It estimated that surface-water scarcity in that scenario could put up to 24% of euro-area economic output at risk. This measures output exposed under specified conditions; it does not predict that production will fall by 24%.
Adopted at COP15 in December 2022, the Kunming-Montreal Global Biodiversity Framework includes 23 targets for 2030 and four goals for 2050. Its targets include conserving at least 30% of terrestrial and inland-water areas, as well as 30% of marine and coastal areas by 2030. The framework calls for at least $200 billion a year in biodiversity financing by 2030 and annual reductions of at least $500 billion in harmful incentives, including subsidies. Target 19 includes at least $30 billion a year in international biodiversity finance for developing countries by 2030 within its $200 billion annual target.
COP17’s agenda includes an initial joint review of progress under the framework. The Yerevan summit is scheduled to close Oct. 30.
