According to the WWF (Almond et al., 2022), 90 percent of the severe biodiversity loss observed over the past 50 years can be attributed to human—particularly economic—activity. We develop a parsimonious economic model that explains findings like this and allows us to discuss policy measures such as sustainable investing. In this general model, we show that sustainable investing can help to moderate the environmental problem. In particular, we make predictions about the impact of a further 10 percent loss of biodiversity in Switzerland on Swiss GDP and equity market returns.
