The hidden links between agriculture, deforestation, and biodiversity loss and why they matter for investors.
The Forest We Ate: How Agriculture Consumes Biodiversity
The loss of biodiversity has financial and investment implications. While not-for-profits and investors such as ourselves are straining to actually quantify our risks, the qualitative indicators are mounting.
That the figures are high is universally agreed. The World Bank states that agriculture remains a major driver of deforestation,[1] while the FAO estimates that agricultural expansion was responsible for 90% of global deforestation. Massive efforts to re-forest are not enough – as the chart shows, the FAO estimates that new deforestation exceeds reforestation.
The EU estimates that it imports about 16% of global deforestation through imported food and feedstuffs, and is taking action. The EU Deforestation Regulation (EUDR) will require companies to provide full transparency to prove that imports of several high-risk commodities, such as cocoa, palm oil, and timber, do not come from land deforested after 2020.
Deforestation and Re-forestation
Investment Implications?
The World Bank’s estimate that biodiversity losses will cost us $2.7 trillion annually[2] ought to scare you. The difficulty of making precise estimates ought to scare you more. But if those sound bites don’t bother you, listen up: The EUDR includes sanctions. This regulation will apply not just to companies based in the EU, but also companies operating in the EU. Further, it covers deforestation outside of the EU. One might hope it will be a game-changer for biodiversity. But first, it may be a game-changer for your investments.
Eating away our future?
At Candriam, we believe protecting biodiversity means protecting economic value.
Our latest white paper, Eating Away Our Future, explores:
- The material and accelerating financial risks of deforestation for companies and investors.
- The impact of new regulation, transparency, and sanctions such as the EUDR.
- How nature has become a source of double materiality for investors, as companies impact ecosystems while ecosystem decline increasingly impacts corporate performance.
Watch the ESG Talk Replay from the Candriam Academy
ESG Talk: “The Real Price of Chocolate”
Missed the live discussion? The replay is now available on the Candriam Academy
Our experts Marie Niemczyk, Isabelle Chalon, Alix Ditisheim and Elouan Heurard discuss how agriculture and deforestation represent accelerating financial risks for investors.
Continue Your Sustainable Journey
Explore how Candriam translates sustainability into financial and investment reality
[1] World Bank Blogs, 20 March, 2025. 4 key facts about forests and food: our experts weigh in
[2] World Bank, 1 July, 2021. Protecting Nature Could Avert Global Economy Losses of $2.7 Trillion Per Year
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Research Paper, Alix Chosson, Elouan Heurard, ESG, SRI, BiodiversityCan We Assess Companies’ Ecological Debt? And How?
While, according to the World Economic Forum, half of the global GDP is dependent on nature, biodiversity is experiencing an extinction that challenges the resilience of our economies. Deterioration of air, water and soil quality, decline in ecosystem services such as pollination: the physical impacts of this loss of biodiversity are already putting our economies under pressure. -
Philippe Dehoux, Lucia Meloni, Fixed Income, ESG, SRI, Climate Action, Biodiversity, Water, Sovereign SustainabilityGenerating Impact in the Bond Space – But How?
Impact investments have kept rising over the past decades, reaching $1.6 trillion USD according to the Global Impact Investing Network (GIIN) – that is $ 1.6 trillion USD in assets allocated toward solutions supporting the Sustainable Development Goals. -
Research Paper, Alix Chosson, Elouan Heurard, BiodiversityBiodiversity: ready to take up the challenge of biodiversity integration?
Biodiversity challenges are multifaceted, involving intricate ecological, geographical, and social dimensions. Acknowledging this, Candriam’s biodiversity framework allows for a granular and effective approach of biodiversity integration.