Box C: The Materiality of Nature-Related Financial Risks to the UK

At least half of global GDP is moderately or highly directly dependent on nature, and ultimately there is no economy without its critical services, including clean and abundant water, clean air and food. Nature across most of the globe has now been significantly altered by multiple human drivers, such as land-use change, pollution, extraction of minerals, abstraction of water and climate change. Statistics on the current state of biodiversity loss and environmental degradation are alarming: the extent and condition of ecosystems has declined in 50 per cent of natural ecosystems, including more than 85 per cent of wetland area lost, and 25 per cent of species are at risk of extinction. The 2019 Global Assessment Report of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) further concluded that 14 of the 18 ecosystem services that were assessed had declined since the 1970s. The United Kingdom is no exception. The percentage of UK habitats 'in favourable or improving conservation status' has been deteriorating since 2007, exacerbating impacts on its soils, pollinators, air and environmental pollution, water and flood protection. 75 per cent of the United Kingdom is covered by at least one hotspot of natural capital depletion, and 25 per cent is covered by two or more hotspots of natural capital depletion. The United Kingdom, with its globally interconnected economy, is also exposed to significant global emerging risks.