WWF and GFI warn: Without bold private sector action, the UK faces 5% GDP loss from nature decline

The UK economy faces a potential contraction of nearly five per cent by 2030 unless businesses step up to help reverse the decline of nature, according to a new report. Research conducted by the Green Finance Institute (GFI) and the Worldwide Fund for Nature (WWF), published under the title Business Investment in Nature, warns that environmental degradation, compounded by climate change, could reduce the country’s GDP by 4.7 per cent within the decade.

Globally, the risks are even more striking. PwC estimates that more than half of the world’s GDP is exposed to threats from the loss of nature.

For the UK, the projected losses are severe. Contributions from the University of Oxford, the University of Reading, UNEP-WCMC, and the National Institute for Economic and Social Research show that the financial impact of environmental decline would outweigh all gains achieved through current growth initiatives.

The findings paint a troubling picture. A weakened natural environment is already disrupting sectors as varied as housing, agriculture, energy, manufacturing, and tourism. Rising costs are eroding productivity and weakening resilience across regions. Risks include water shortages, soil degradation, flooding, and the scarcity of key resources.

The situation is especially alarming given that the UK ranks among the most nature-depleted countries in the world. According to the Natural History Museum’s biodiversity intactness index, only about half of the country’s original natural environment remains.

Water shortages, soil decline, and extreme weather events are already costing billions. The GFI and WWF report highlights that water scarcity could delay housing projects, incurring a cost of up to £ 25 billion over the next five years. Thermal power stations are projected to incur additional annual costs of around £ 450 million as water supplies dwindle.

Flooding and storm damage also pose a growing threat. Insurance claims reached five hundred and eighty-five million pounds in 2024, while agricultural crop losses were estimated at nearly forty per cent. Energy infrastructure has not been spared, with damages of £ 200 million reported at the Bacton Gas Terminal.

Soil degradation adds another significant burden, costing the economy an estimated $ 1.4 billion each year. The surge in fertiliser prices in 2022 contributed to higher food inflation and forced many dairy farms out of operation.

Some companies are taking steps to respond to the situation. Regenerative agriculture and precision farming are gaining traction, while investment in agri-tech reached £ 130 million in 2024.

Still, the report emphasises that isolated efforts are insufficient. Businesses are beginning to invest in regenerative farming, circular economy technologies, and water efficiency, but the scale of action remains too small.

The GFI and WWF are calling for coordinated action through Government-backed Nature-Positive Transition Pathways. These would be national sector-specific plans, designed jointly by ministers and industry leaders, to align business models with environmental goals.

Momentum is already building. Twenty-eight businesses and trade organisations have signed a joint statement in support of these pathways, arguing that they would provide the clarity and stability needed to unlock significant private investment.

Financial institutions are also beginning to shift. In 2024, UK businesses that developed technologies to protect nature raised £ 2.8 billion, while investors such as Aviva and Barclays began linking financial products to biodiversity outcomes and natural capital goals.

The report frames this as a decisive moment. With the Government preparing to publish its revised Environmental Improvement Plan later this autumn, pressure is mounting on ministers to embed these transition pathways as part of the UK’s broader economic strategy.

The Labour-led Government has set its sights on a growth-first agenda. However, regulators and environmental groups have criticised this approach, arguing that it sets economic expansion and environmental protection in opposition rather than in alignment.

WWF economist Vassilis Gkoumas said: “A real plan to save UK nature must bring the private sector with it.

The evidence paper published today shows that the scale of the opportunity, along with the statement of support, demonstrates that many businesses want greater clarity on how they can contribute to the transition.

“Now we need more to come forward and play their part, and the UK government to recognise Nature-Positive Transition Pathways as a key part of their economic strategy.”

Environment Secretary Steve Reed said: “We are working with industry leaders to drive private investment, including through the development of NPPs.

Britain is one of the most nature-depleted countries in the world. I am determined to reverse nature decline and look forward to launching our new plan for nature and the environment in the Autumn, which will set out how we will do this.”