Aligning Finance with Nature: A network analysis of vulnerability, responsibility, and systemic risk

Biodiversity and ecosystem services underpin the global economy, and their degradation poses escalating risks to economic activity and society. Human-nature interactions are partly structured by how the financial system assesses risks, allocates capital, and shapes corporate behavior. Although recent advances have strengthened micro-level assessments of financial institutions’ exposures and impacts, the macro-scale consequences of biodiversity loss remain poorly understood. In a context of globalized supply chains and densely interconnected financial networks, it is essential to examine how nature-related risks propagate across complex socio-economic systems.

Here, we integrate ecological, industrial, and financial data into a three-layer network that maps dependencies and biodiversity impacts driven by supply-chain linkages, and stock ownership structures. Our global sample covers listed companies representing USD 122.7 trillion in market capitalization (≈97% of global market cap), complemented by non-listed subsidiaries, totaling roughly 200,000 firms. For these entities, we identify about 400,000 ultimate shareholders, whose identified portfolio holdings collectively account for USD 55 trillion in market value (≈44% of global market cap). Using network analysis, input–output modelling, and lifecycle assessment, we quantify location-specific biodiversity impacts across four environmental pressures (land use, blue-water consumption, greenhouse-gas emissions, and terrestrial acidification) and assess ecosystem-service dependencies across 21 ecosystem services. This framework enables us to (1) identify systemically important financial actors, (2) pinpoint critical ecosystems whose degradation could trigger cascading risks, and (3) reveal the asymmetric distribution of vulnerability and responsibility across countries and financial institutions.

This information has direct policy relevance. By identifying critical nodes in the network, the analysis can guide targeted interventions that strengthen financial stability while supporting nature conservation, and clarify where responsibility for systemic impacts lies. Furthermore, assigning impact and dependency profiles to financial institutions provides a basis to integrate biodiversity into disclosure practices, portfolio alignment approaches, and risk assessment methodologies.

The analysis is currently ongoing, and the session will provide an opportunity to present final results. We will also outline the next work stream: extending this framework into operational macro-risk assessment by simulating local shocks in vulnerable ecosystems, modelling risk propagation, and deriving systemic-risk indicators under various ecological and economic scenarios.