In recent decades, social and business awareness has fostered the gradual incorporation of environmental considerations into the various stages of value creation in an economy, generating a redefinition of production and consumption processes towards relatively more sustainable means and focusing on concepts such as global warming and CO2 emissions, which are currently frequent topics of debate on global economic and political agendas.
Although the objectives set out in the UN 2030 Agenda are a clear call to action and constitute a fundamental step to stop the environmental deterioration that the last decades have implied for our planet, additional plans have been needed to facilitate their execution and define both the scope of the objectives set in them, as well as new goals in terms of environmental metrics. In particular, the Strategic Plan for Biological Diversity and the Sustainable Development Goals, as well as the relationships between them, make clear the importance of biodiversity for the achievement of the sustainable development goals in the 2030 Agenda.
Currently, productive relationships can be analyzed through a network defined by the value flows between the various economic sectors. The translation of an input-output matrix into a set of nodes (sectors) and edges (value streams) currently does not imply a significant computational challenge if the conventional costs of goods and services that flow through the productive network are taken into account. .
However, incorporating the value of the goods or services that we obtain from nature in said tables or networks is a challenge that has not yet been resolved. Although initiatives such as the Economics of Ecosystems and Biodiversity of the G8+5 have sought to establish a price for “natural” capital so that markets can incorporate this valuation and business and economic policy decisions consider its associated costs and benefits, there is still quite a way to go.
A global analysis to understand the interdependence that exists between the productive network and the network of relationships defined by an ecosystem is essential to know in depth the structure of costs and benefits that one dimension implies in the other. Although, conventionally, these networks are studied separately, the investigation of the links between the two would entail a comprehensive assessment of the net flows generated in an economy, considering the direct costs and benefits of goods and services, as well as those associated with environmental variables. .
In Mexico, a country with great wealth in terms of natural resources, the ecological effects derived from the productive network reflect the institutional reluctance to incorporate ecological considerations in decision-making, even if problems such as climate change, food insecurity and the The emergence of diseases are a reality that our country suffers daily and that are a consequence, to a large extent, of the loss of biodiversity.
Biodiversity is a key issue on the global economic agenda and public institutions should do more about it. Likewise, financial institutions, and particularly commercial banks, could align their strategy to guarantee its promotion and minimize the havoc that its loss generates in social welfare and economic efficiency in the long term. The foregoing could generate an approach of the business or social network to the ecological networks with which they have links.
The challenge for commercial banks consists in channeling resources towards “green” activities that promote biodiversity, generate value spillovers in ecological terms, and do not sacrifice long-term efficiency in the productive network.
*The author is a principal economist at BBVA Mexico.
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