By Virginia Furness
LONDON (Reuters) - Nature loss could pose a greater risk to Britain's economy than the COVID-19 pandemic and wipe 300 billion pounds ($373.83 billion) off UK economic growth if measures are not taken to slow it, the first such study shows.
Biodiversity loss and environmental degradation create major risks for the UK economy and financial sector and could slow growth by as much as 12% in the 2030s, Green Finance Institute (GFI) said in the scenario analysis.
GFI is a forum for public-private collaboration in green finance backed by the UK government.
The study is the first to fully assesses how nature-related risks, such as antimicrobial resistance and soil health decline, affect the UK's economy and financial sector and finds them to be as damaging, or more, as those related to climate change.
"This is a decisive moment and shows that we must start integrating these nature-related risks into financial risk management and investment decisions – to both reduce exposure and transition our economy to one that invests in the natural environment," GFI CEO Rhian-Mari Thomas said.
The report calls for central banks, regulators and governments to better assess the risks nature-loss poses to financial stability and for businesses to better understand the value they take from natural capital and invest in protecting it.
Seven of the UK's largest banks face near-term losses of 4%-5% to the value of their domestic holdings over the coming decade from nature-related risks, GFI said.
As one of the world's most nature-depleted countries, the UK is at highest risk from zoonotic diseases, antimicrobial resistance, soil health decline and the global repercussions of food security, the report said.
"Nature underpins the health of our economy, and it is under threat from a global nature crisis," said Lord Benyon, minister of state at the Department for Environment, Food and Rural Affairs.
"The responsibility to conserve nature lies with all sectors and sections of society, and green finance has a crucial role to play."
($1 = 0.8025 pounds)