As the world’s focus shifts to the rapid decline in biodiversity, a new Goldman Sachs report reveals how businesses integrate nature into their sustainability strategies.

The report, GS SUSTAIN: Nature & Biodiversity, highlights the financial risks from biodiversity loss and the benefits for companies leading the charge.

Central to the report is the new Goldman Sachs SUSTAIN Nature Tool, designed to help investors evaluate corporate transparency and performance on biodiversity. The tool assesses how businesses handle their impact on critical environmental factors like land use, pollution, and resource exploitation.

Though data on biodiversity is limited, Goldman Sachs suggests companies that act now could gain an advantage.

Getting ahead of regulations and adopting science-based biodiversity strategies could pay off in the long run, positioning businesses for future success.

One of the report’s main concerns is how biodiversity loss disrupts vital ecosystem services, like pollination and water filtration, which industries such as agriculture and mining heavily depend on.

More than half of the global economy, representing up to $58 trillion in GDP, relies on nature in some capacity.

Industries like food and beverage, metals, and mining face heightened risks from deforestation and natural resource depletion, which can potentially drive up costs and disrupt supply chains. Businesses that do not address these nature-based risks could face severe financial consequences, regulatory delays, or project cancellations.

The report also highlights opportunities for “Nature Enablers”—companies offering solutions in water management, regenerative agriculture, and environmental remediation. As businesses seek to build resilience against biodiversity-related risks, these sectors are well-positioned for growth.

Water resiliency, in particular, will be critical as climate variability increases. Companies providing solutions like water purification, storage, and sustainable management could significantly increase demand.

The concept of a “nature-positive” goal is also gaining traction. It aims to halt and reverse biodiversity loss by 2030. Though still new, regions like the UK already incorporate these goals into regulations, requiring developers to show measurable biodiversity gains.

Businesses aligning with these nature-positive targets could benefit from investors and regulators. However, they’ll need to show concrete, measurable results, as markets appear to favour action over mere transparency.

Assessing corporate biodiversity impacts remains challenging due to data limitations, but the report anticipates improvements as regulations evolve.

For now, investors may still find long-term value in companies making early moves on biodiversity.

Interestingly, companies leading in biodiversity management have underperformed in the stock market compared to their peers. However, Goldman Sachs suggests this could signal a hidden opportunity for investors to uncover value in forward-thinking businesses.

Some industries are more exposed to biodiversity risks than others, including food and beverage, oil and gas, and paper and packaging. While these sectors face high stakes, they could benefit from adopting stronger biodiversity management practices.

As the focus on nature and biodiversity grows, companies that don’t address their environmental impacts risk being left behind.

Businesses that lead in managing nature-related risks are likely to attract both regulatory approval and sustainable investors.