A new tool for understanding biodiversity risks

Growing evidence points to biodiversity loss as a critical environmental challenge with direct implications for economic stability and business continuity. Ecosystem degradation can disrupt essential services from pollination to carbon storage and flood protection, creating operational and supply chain vulnerabilities. The World Economic Forum states that more than half of the world's GDP, $44 trillion, depends moderately or strongly on nature. This systemic importance is reflected in the ECB's decision to explicitly integrate nature degradation into its monetary policy strategy assessment, alongside climate change.

Crédit Agricole CIB has developed the Country Biodiversity Risk Index (CBRI), a framework designed to assess biodiversity-related risks at the national level. Combining 43 indicators across four dimensions, the methodology provides a structured approach to evaluating nature-related risks across nearly all global territories. This enables financial institutions to identify biodiversity exposure concentrations throughout complex international value chains and across their lending and investment portfolios.

The CBRI evaluates:

1. Ecosystem health: how intact are a country's ecosystems notably forests, wetlands, and marine environments?
2. Species conservation status: how many species face extinction, and how severe is the threat?
3. Anthropogenic pressures: what human activities are driving biodiversity loss - from deforestation to pollution?
4. Protection measures: how effectively is the country protecting its natural resources?

This research demonstrates that highest-risk countries cluster in rapidly developing megadiverse regions (China, India, Southeast Asia, tropical South America, and parts of Africa) where high species richness coincides with accelerating habitat conversion and industrial expansion. Conversely, lowest-risk countries include sparsely populated regions and post-industrial nations with stabilized land use.

Critically, regions experiencing the most rapid economic growth face some of the highest biodiversity-related risks, suggesting a potential increasing trend in the nature-related risk exposure of financial portfolios.

The CBRI provides Financial Institutions with an innovative methodology to:

• Conduct preliminary biodiversity risk screening across lending and investment portfolios
• Identify geographic concentrations of nature-related risk in supply chains
• Support enhanced due diligence in high-risk jurisdictions
• Prepare for evolving nature-related disclosure requirements, including the Taskforce on Nature-related Financial Disclosures (TNFD)

Download the complete Country Biodiversity Risk Index paper to discover how this innovative methodology can help you navigate the complex relationship between business and nature.