biodiversity
biodiversity

Habitat, water security and air quality: New index reveals which sectors and countries are at risk from biodiversity loss

Swiss Re Institute's Biodiversity and Ecosystem Services Index analysis highlights which economic sectors are most reliant on nature and the exposure each country has to biodiversity and ecosystems services decline.

Countries around the world depend on a range of vital natural services to help maintain the health and stability of their communities and economies. Better known as biodiversity and ecosystem services, these include food provision, water security and regulation of local air quality among others.

These services underpin all economic activity in our societies globally. Assessing biodiversity risks is complex, however, as there is a massive underlying collection of risks. To build understanding of this global issue and foster dialogue around biodiversity, Swiss Re Institute has developed a new Biodiversity and Ecosystem Services (BES) Index.

There is a clear need to assess the state of ecosystems so that the global community can minimise further negative impact on economies across the world. This important piece of work provides a data-driven foundation for understanding the economic risks of deteriorating biodiversity and ecosystems.
Christian Mumenthaler, Group CEO, Swiss Re

Swiss Re Institute's BES Index reveals that over half (55%) of global GDP is dependent on biodiversity and ecosystem services. It also shows that in a fifth of all countries, ecosystems are in a fragile state for more than 30% of the entire country area.

The index can inform decision-making for governments' efforts to improve ecosystem restoration and preservation, for corporates and investors protecting against environmental shocks, or for the provision of insurance services that support the Sustainability Development Goals.

Using Swiss Re Institute's Biodiversity and Ecosystem Services Index as a basis for decision making in underwriting and asset management will make businesses and investments more resilient.
Jeffrey Bohn, Chief Research Officer, Swiss Re

The Index will be available as part of CatNet®, Swiss Re’s online natural hazard information and mapping system. Using insights from Swiss Re Institute's BES Index enables clients to add a sustainability perspective to risk selection and inform their decision on the long-term risk-adequacy of their premiums. An example is the protection of coastal properties in hurricane- or typhoon-prone areas by mangrove and coral reefs. An industry first, the BES Index offers an assessment of how intact coastal ecosystems are in these locations and, together with property data in CatNet®, provides insurance insights on the properties they protect. This information can be used for better risk protection and potentially risk adequate pricing.

The BES Index provides a holistic, comparative view of the state of BES globally. It works by aggregating data from ten different BES categories addressing water security, timber provision, food provision, habitat intactness, pollination, soil fertility, water quality, regulation of air quality & local climate, erosion control and coastal protection.

This aggregated data is provided at a resolution of 1 kilometre squared, across the globe and can therefore support a highly localised analysis of the ten BES categories, Swiss Re Institute also applied the index to globally rank countries according to the state of BES, as well as ranking countries according to the BES-dependency of their economy.

The index also underlines the important need for nature-based insurance solutions and will create a new business segment for insurance, thereby strengthening resilience of affected regions and communities.

Read the news release here.

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