Once dismissed as a conservationist’s footnote, biodiversity loss now threatens corporate survival. Over 75% of Earth’s land and 66% of oceans bear irreversible human scars , leading to a global environmental crisis and endangering $44 trillion in global GDP tied to ecosystem services .
Companies are facing mounting pressures for accountability of nature-related risks, as stakeholders tie corporate survival to ecological stewardship. For India, the stakes are existential: 80% of its population relies on climate-vulnerable sectors such as agriculture. Boards must act, not just to comply, but to secure India’s economic future.Acknowledging the critical role of nature in economic development, regulators globally are stepping up and enshrining biodiversity into law.
The EU’s Corporate Sustainability Reporting Directive (CSRD) now mandates nature-related disclosures, while the Kunming-Montreal Global Biodiversity Framework (GBF) compels 196 countries to align business activities with conservation goals. Regulatory momentum is turning voluntary pledges, like the Taskforce on Nature-related Financial Disclosures (TNFD), into de facto standards. Going forward, companies may face fines, operational restrictions, and reputational fallout for non-compliance with biodiversity and nature-related disclosure requirements and mitigation measures.
Consequently, boards must scrutinise biodiversity impacts with greater rigor – via upskilling and onboarding necessary expertise, embedding biodiversity and nature-related risks into the board charter, and mandating cross-committee collaboration (i.e., linking sustainability and risk committees). Currently, 200 financial institutions, representing Euro 23 trillion in assets under management, have signed the Finance for Biodiversity Pledge. Investors are enhancing scrutiny of their portfolios for potential biodiversity and nature-related risks and engaging with companies to assess their impacts and set targets for biodiversity conservation and restoration.
Boards must pre-empt such scrutiny by engaging shareholders on biodiversity and nature-related roadmaps, while simultaneously navigating emerging global regulations. Business dependency on nature goes beyond investor demands.
To address such risks, companies must map “biodiversity hotspots” in their value chains by integrating tools such as TNFD’s LEAP framework, deploying AI and satellite-based tracking of deforestation and nature loss.
Boards must approve investments in nature-positive innovations while divesting from high-risk assets by integrating nature-related risks into enterprise risk management (ERM) systems, ESG (environmental, social, and governance) strategies, and investment frameworks, while mandating their disclosure and sustainability narratives to ensure holistic risk governance.
Biodiversity is no longer a peripheral concern but a litmus test for directorial competence. Boards must institutionalise nature as a strategic priority – revising governance structures, evaluating risk frameworks for integration of nature-related considerations, and embedding accountability into executive pay. Those who defer action can face legal liability, investor revolt, and operational collapse. Conversely, boards that treat ecosystems as core infrastructure will unlock innovation, secure social license, and future-proof returns. The mandate is clear: govern nature or be governed by its decline.
