Recent studies examining the risks to financial system stability associated with nature degradation have been conducted for countries such as the Netherlands, France, and others. These studies consistently underscore that biodiversity loss can have profound destabilising effects. Such effects may arise either from the collapse of ecosystems and the services they provide to economies (referred to as ‘physical shocks’) or from shifts in behaviour, technology, or regulation linked to ecological transitions (‘transition shocks’).

However, these risks extend well beyond the financial sector, particularly in countries from the Global South. How can the macro-financial context be better incorporated into analyses of nature-related risks in emerging economies, where it plays a critical role in the resilience of businesses and institutions? And in the context of climate challenges, how can we better account for the territorial dimension of nature-related risks and conduct spatially explicit assessments?

Focusing on the case of South Africa, this study evaluates the potential effects of either a physical shock (resulting from the degradation of ecosystem services) or a transition shock (arising from measures or innovations aimed at reducing the pressures certain economic sectors place on biodiversity). These effects will be examined across multiple dimensions, including production, income generation, inflation, employment, wages, external balance, and fiscal stability.

Beyond this broad analysis, the method seeks to identify the specific locations of these risks within the region. This spatially explicit approach aims to provide actionable insights for local decision-makers, enabling them to implement well-informed measures for an effective ecological transition.

This study introduces innovative methods for assessing the socio-economic risks associated with nature degradation, grounded in two main contributions:

• Multidimensional analysis of macro-financial and social variables: the study examines the exposure of key macro-financial and social variables to nature-related risks. By using input-output tables extended to include environmental and socio-economic satellite accounts, it identifies how these risks could significantly affect sectors that are directly and indirectly critical to production chains and, consequently, socio-economic stability.
• Granular spatial assessment: at the municipal level in South Africa, the study investigates nature-related vulnerabilities through a more detailed spatial analysis. This approach integrates spatially disaggregated economic data with mapped ecological data to ensure consistency, enabling the identification of specific socio-economic exposures.

Together, these two interconnected approaches emphasize the need for a holistic understanding of nature-related risks. They demonstrate the value of interdisciplinary collaboration between economists and ecologists, aiming to balance the intertwined goals of economic prosperity, social stability, and environmental sustainability.

The study identifies economic sectors potentially exposed to significant risks and provides South African stakeholders with a foundation for conducting deeper analyses to determine the extent and materiality of these risks.

In South Africa, for instance, 80% of the country’s exports and 60% of business loans are heavily reliant on the water supply services provided by ecosystems. Beyond direct exposure, shocks affecting sectors dependent on these ecosystem services can cascade through the industrial network, triggering demand or supply disruptions. While 18% of jobs and 24% of salaries are directly exposed to such risks—particularly in the property and manufacturing sectors—these figures rise to 48% and 56%, respectively, when considering activities indirectly linked through value chains.

Given biodiversity’s strong dependence on geographic factors, it is essential to complement prior analyses with geolocalised studies. These analyses identify the economic activities located in areas where ecosystems and their services are already degraded. For example, when factoring in the location of companies involved in exports, the initial estimate that 80% of South African exports depend on surface water supply decreases to around 23%. This revised figure reflects exports generated by activities reliant on surface water supply and situated in municipalities where this ecosystem service is significantly degraded. In other words, when the geographic degradation of ecosystem services is considered, nearly a quarter of net exports are directly vulnerable to water scarcity.

Find out more: 

• Read the research paper: Socio-economic and spatially-explicit assessment of nature-related risks – The case of South Africa
• Read the research paper: A framework to assess socioeconomic and spatialized nature-related risks: An application to South Africa (Environmental and Sustainability Indicators, 2025)
• Watch the replay of the Research Conversations webinar on the research project, with South African partners

The method has garnered interest and validation from numerous economic and environmental policymakers, highlighting its relevance. Rather than focusing on precise numerical results, the emphasis lies on the orders of magnitude and the identification of economic sectors that are either highly dependent on ecosystem services (exposed to physical risks) or exert significant pressure on biodiversity (exposed to transition risks). These insights are sparking interest and debate.

One of the key outcomes has been fostering dialogue among South African stakeholders who previously had limited interaction, including the South African National Biodiversity Institute (SANBI), the Department of the Environment, the Department of Finance, and the South African Reserve Bank (SARB).

South African stakeholders are now working to translate these technical findings into accessible materials for non-specialist audiences and to facilitate deeper discussions with representatives from sectors identified as either risk-exposed or offering opportunities for resilience and positive socio-economic impacts.

Furthermore, the South African Reserve Bank, in collaboration with the Agence Française de Développement (AFD), is applying this method to assess the financial sector's exposure to nature-related risks across member countries of the Southern African Development Community (SADC). The Development Bank of South Africa (DBSA) has also begun using this approach to evaluate the exposure of its own portfolio. Future iterations and enhancements of the method are anticipated as its use expands.

• Paul Hadji-Lazaro, Ecological Macroeconomist at AFD
• Julien Calas, Research Officer on Biodiversity, AFD
• Antoine Godin, Economist, Head of AFD Macroeconomic Modelling Unit
• Andrew Skowno, National Biodiversity Analysis Coordinator at SANBI
• Pamela Sekese, Geospatial Consultant

South Africa’s Economic Reconstruction and Recovery Plan was launched in October 2020 by the Presidency in response to the economic impacts of the Covid-19 pandemic. Besides the Presidential Employment Stimulus program, it included emergency social protection measures, among which the introduction of a special Covid-19 Social Relief of Distress grant (SRD), providing ZAR350 per month for unemployed people not covered by any other form of support. The South African government now seeks to develop options for the future of SRD grant.

Find out more about the Extension in South Africa

The objective of this research project is to produce motivated recommendations on how the SRD should be designed going forward into the longer term, in order to maximize the impact of the grant on employment outcomes and to ensure it effectively reduces poverty, while maintaining its cost to an acceptable level:

1. To maximise the impact of the grant on employment, the project needs to understand how to design and label the grant to encourage its use for job search.
2. To ensure the grant effectively reduces poverty, the project must figure out the most cost-effective way to target and assess the eligibility of recipients. Moreover, poverty reductions can be scaled up by determining measures that could encourage take up among the most disadvantaged. 

Once these goals have been achieved, and in order to inform public decision-making, these findings must be communicated to a number of stakeholders in government and civil society.

This project is part of a wider research program conducted with several South African research centres and in close collaboration with the South African Presidency. Four other research projects analysing the externalities of the Covid-19 stimulus policy are currently being developed as part of the first pillar of the Extension's activities in South Africa.

This research project uses the model generated to conduct the 2014/2015 fiscal incidence assessment and introduces updated data for 2019-2021. It simulates five scenarios around eligibility criteria, targeting mechanisms, value, disbursement model and conditionalities and computes the potential impact on poverty and employment outcomes.

You will find below the research paper related to this project: 

• Proposal for the extension, redesign and repurposing of the SRD for the goal of poverty reduction

• Anda David, AFD Research Officer

As the field of research on green infrastructure and nature-based solutions in cities expands, the potential of urban agriculture in the production of ecosystem services remains unexplored. Beyond the benefits of increasing food supply and reducing the vulnerability of urban populations, urban food systems can be at the heart of policies to develop nature-based solutions. This project studies the potential benefits of these systems in the perimeter of Bengaluru, an Indian city with a strong heritage in terms of urban agriculture.

Taking the case study of Bengaluru, this project led by IIHS explores how and why urban food systems, in rapidly developing urban and peri-urban areas, can be seen as nature-based urban solutions that bring benefits to ecosystems and society.  

Two research questions are addressed: 

1. What is the scope and outcomes of urban agriculture for ecosystem services (including pollination) and societal well-being (such as food and nutritional security of the most vulnerable populations)?
2. How can we use different co-production pathways across the science-policy-citizen interface to scale up NBS around sustainable urban agricultural practices?

The research methodology is based on three main work packages: 

1. Synthesis of scientific knowledge on the potential of NBS and existing practices at various scales, and particularly within a chosen ward of Bengaluru with the deployment of pilot interventions;
2. Incubation and capacity building: incubating novel NBS ideas and experiments related to pollinator friendly and water conserving urban agriculture, and capacity building through the training of various stakeholder groups;
3. Scaling impact by identifying and engaging with different stakeholders, including city-level policy and decision makers, right from the start of the project to ensure the scaling of impact throughout the project.

The expected results of these projects are: 

• Academic results on sustainable urban food systems in the context of rapidly urbanizing countries from the Global South, on urban NBS experiences and their effects on ecosystem services (including pollination);
• Knowledge outputs for urban decision-makers on the integration of NBS in urban planning;
• Capacity building and teaching materials on multidisciplinary approaches to urban sustainability.  

The project is also testing nature-based solutions aimed at strengthening the resilience of food systems in Bangalore. 

The research team aims to show how nature-based solutions (NbS) can address urban water security challenges in the Global South — a topic that remains underexplored in the scientific literature, which is still largely focused on the Global North. Drawing on expert discussions and a literature review, they identify the specific characteristics of these contexts (environmental, socio-economic, governance-related, technical capacity, etc.), as well as the barriers and opportunities for implementing these solutions. The goal is to propose concrete avenues to support the more effective and equitable adoption of NbS in cities of the Global South.

South Africa’s Department of Agriculture, Land Reform and Rural Development assists persons (or their descendants) who were excluded the formal agriculture economy on the basis of their skin colour, and who have recently begun to engage in farming with the support and assistance of the State. This broad policy is implemented through the Land Reform Programme, where Recapitalisation and Development funding (Recap) is used to help land reform beneficiaries establish viable enterprises. However, this programme remains focused on traditional models of crop and livestock systems. 

The consortium of researchers assembled by the South African National Bioinformatics Institute (SANBI) argues that the Land Reform Programme would benefit from integrating the ecosystem services paradigm to help reduce inequality and understand the benefits of land transfer more holistically (Clements et al. 2021). This research consortium is working to integrate wildlife economy enterprise development within the Recap scope of investment.

More specifically, the research project focuses on wildlife ranching, which can be defined as the breeding and commercial use of wild animals for hunting, game meat production, live animal trading or ecotourism. This economic activity can be an interface between conservation and agriculture but, although anchored for many years in South Africa, it remains little studied. Decision-makers thus lack data on the functioning of this wildlife economy as well as its socio-economic and environmental impacts. 

Developing knowledge and decision support tools on this wildlife economy with the support of the ECOPRONAT programme is therefore an opportunity for better management of agricultural land and natural ecosystems, for the benefit of beneficiaries of the Land Reform Programme. The survey methodology and lessons learned in South Africa will be used for exchanges with Kenyan authorities who are also conducting studies on the role of wildlife economy in that country.

This project aims to support the development of agricultural policies in Africa that are sustainable on the long-term, and to develop wildlife economy research in South Africa and Kenya. Through its work, the research consortium aims to produce knowledge and tools to enable a large-scale transition, going from a land use that degrades ecosystems to profitable wildlife enterprises that restore natural capital, create jobs and catalyze investment to expand conservation areas. 

To this end, the project aims to: 

1. Develop foundational knowledge for the wildlife economy to facilitate its mainstreaming into agricultural and biodiversity public policies (production of data on business models, their viability, investment and skills development needs, etc.);
2. Co-produce decision support tools that enable local actors, companies and public authorities to adapt their policies and investments and create a systemic impact;
3. Create a regional community of practice to strengthen research capacity in the South and the development of the wildlife economy. Two master’s students are involved in this project, led by SANBI in partnership with the South African Universities of Rhodes, Stellenbosch and Nelson Mandela. 

This research project is based on participatory knowledge building (including training workshops) and on the development of survey methods to collect social, economic and ecological data. This information will be used to produce decision-support tools. In particular, a geospatial selection tool will be developed to identify the actions and investments to be undertaken. 

The methodology consists of collecting data from the established wildlife ranching industries established in South Africa and Kenya, on the contributions of the wildlife industry to biodiversity, land restoration and socio-economic development. Through statistical analysis and data visualization, the team will convert this information into knowledge products to make it more accessible, and then into decision support tools to assist new and emerging farmers to create businesses in the wildlife economy and thus expand the wildlife ranching estate.

The research team has published academic articles on the functioning of the wildlife economy and its socio-economic and environmental impacts:

• Clements, H.S., Child, M.F., Lindeque, L. et al. Lessons from COVID-19 for wildlife ranching in a changing world, Nature Sustainability 5, 1040–1048 (2022).
• Denner, C., Clements, H. S., Child, M. F., & De Vos, A. (2024). The diverse socioeconomic contributions of wildlife ranching, Conservation Science and Practice, 6(7), e13166. 

The team collaborated with public authorities to ensure that this information could be used by local stakeholders. Their data, gathered from surveys with a representative sample of wildlife ranchers, fed into fact sheets on the wildlife economy published by South Africa’s Department of Forestry, Fisheries and the Environment (DFFE). These are available on the Biodiversity Sector Investment platform, which aims to inform South African citizens and investors interested in engaging in this type of activity.

The research has also informed local decision-making, notably in the revision of the National Biodiversity Economy Strategy and related debates on the sustainable use of biodiversity for economic purposes.

Finally, the team shared its findings with a broader audience through The Conversation Africa, analyzing how different wildlife use models can contribute to local development and the inclusion of disadvantaged communities.

Several findings have emerged from this research project: 

Public actors need to monitor the state of the environment in order to assess the effectiveness of their actions, prioritize management policies and measures, and thus objectively establish their contribution to the conservation of natural capital. To do so, they must be able to rely on science-based standards to identify the thresholds at which environmental functions can be considered sustainable.

The ESGAP (Environmental Sustainability Gap) is an innovative tool for assessing the condition of a territory’s environmental functions and how sustainable they are. For all critical components of natural capital in the territory concerned (air or water quality, pollution, forest resources, fisheries, etc.), this indicator calculates the difference between their current state and a state that would be sustainable (i.e., a state compatible with the sustainable functioning of the processes necessary for the preservation of life, human activities and well-being). This allows for the calculation of the “environmental sustainability gap”, which highlights the path to environmental sustainability. This can then serve as a guide for public policies to estimate and preserve the critical functions of the natural capital of a given territory. ESGAP has already been tested in New Caledonia, Kenya and Vietnam.

Within the framework of the ECOPRONAT research programme, AFD aims to develop methodologies for assessing strong sustainability, that is, adopting demanding criteria concerning the non-substituability of natural capital by other forms of capital (physical among others) in a territory or country. AFD also wants to promote their use in international frameworks and contribute to emerging international standards on the good ecological state of ecosystems.

Find out more about ECOPRONAT

The ESGAP pilot project recently conducted in Vietnam made it possible to measure the state of the environmental functions of this country. It identified fisheries resources, soil erosion, air and water pollution as the most degraded dimensions. 

It appears that some economic activities can put pressure on these different environmental functions, while other activities depend on their proper functioning. Developing the ESGAP framework is necessary to go further, by integrating the linkages that exist between the economy and the environment and identifying which human activities are concerned. 

In order to do this, the research team will try to link ESGAP measures to socio-economic activities and build a monetary ESGAP. The aim will be to assess the physical risks associated with certain economic activities on the basis of scenarios of environmental pressures (such as the breakdown of supply of certain essential environmental services, for example in agriculture). The development of these new applications of the ESGAP framework aims to guide policy makers in designing more sustainable development paths. 

 

The research project will be conducted in two phases: 

• The first step will consist in building a “monetary” ESGAP that measures the cost (expressed in monetary units) needed to achieve a sustainable environmental state. This cost is considered an unpaid ecological debt: it corresponds to the cost of effective measures that society would have to spend to achieve a good ecological state. It will be calculated as an abatement cost, that is, the expenditure necessary for human activities (such as production and consumption) in Vietnam to reduce their environmental pressures to a level that does not result in degradation of natural capital (or to an acceptable level, considering the good condition standards considered by the ESGAP).
• The second phase will use the modeling framework developed in the first phase, and assess how different public policies can improve Vietnam’s environmental sustainability by 2035, as well as mitigate the economic risks associated with the loss of the country’s natural capital. First, the team will develop scenarios to determine which interventions can improve Vietnam’s ecological status. Secondly, it will assess the extent to which economic risks related to biodiversity (due to the dependence of the Vietnamese economy on ecosystem services) can be mitigated through these interventions.

Since this study is considered experimental research, the different elements outlined in the research proposal and intermediate results may be adjusted throughout the study based on different factors – such as access to data, data quality, difficulties in implementing certain aspects of the methodology, or unsustainable or misleading results.

The team will produce a synthesis of the study, that will be used as a working document for communication purposes. The final deliverable will outline the methodology, database used and main results of the monetary ESGAP applied in Vietnam and the physical risk assessment methodology for the Vietnamese economy. This final deliverable will explore the relevance of ESGAP for the implementation of public policies aimed at achieving a good state of environmental conditions and future research pathways to link ESGAP measures to socio-economic activities.

Contact: 

• Oskar Lecuyer, research officer, AFD

The relationship between the biodiversity crisis and agriculture is complex. On the one hand, the expansion of agricultural systems and conventional agricultural practices threaten biodiversity; on the other hand, agricultural production is dependent on biodiversity and the ecosystem services it provides. 

In Mozambique, tensions between poverty reduction targets and biodiversity protection are high. The expansion of small farms leads to the fragmentation of natural ecosystems and it represents one of the main sources of biodiversity destruction for the country. One of Mozambique’s responses to this fragmentation is to save the clearing of new land through a more intensive use of inputs, clearly separating land for nature protection from land for productive agriculture. 

The reconciliation of agricultural development and conservation through the use of agricultural techniques respectful of biodiversity is now essential to ensure the sustainability of agricultural systems and secure the food supply of the population. 

This project is part of the ECOPRONAT research programme, which supports research on how to better take into account biodiversity and mainstream it into key economic sectors.

This research project aims to understand the possible trade-offs and complementarities between poverty reduction, food security and biodiversity in the context of developing countries, where farmland expansion is a major threat to biodiversity. This research will help understand how local landscape/community units function, how they impact biodiversity and its ecosystem services and how they benefit from them.

This knowledge will make it possible to identify the levers to mainstream biodiversity into the agricultural sector. This project also aims to demonstrate the need to create a link between the national policy framework regarding the mainstreaming of biodiversity into agriculture, and the socio-ecological context of successful local interventions.

The project involves a multidisciplinary team of ten Portuguese and Mozambican researchers: two from Observatório do Meio Rural (OMR), two from Eduardo Mondlane University, one from Lúrio University and five from the Instituto Superior de Agronomia in Lisbon (including a doctoral student). In addition, eighteen people (researchers and students) are involved in data collection activities. 

The methodological approach is divided into three steps:

• Step 1. Priorities, analysis and mapping at the country level: carried out at national level, with the aim of producing a broad, national picture of the effects of farming systems on poverty reduction, food security and biodiversity conservation; as well as an understanding of the conflicts and complementarities between these objectives.
• Step 2. Priorities, analysis and research into local context-sensitive interventions: carried out at the local level, through five case studies, covering the main socio-ecological gradients of Mozambique that should be considered when developing a national strategy to mainstream biodiversity into agricultural policies.
• Step 3. Link between local initiatives and the national framework for the mainstreaming of biodiversity in agriculture: aims to integrate the results of the first and second steps, to help the mainstreaming of biodiversity in agricultural policy, addressing the conflicting relationships and complementarities between the objectives of poverty, food security and biodiversity. 

This research project mobilizes different scientific disciplines in a transdisciplinary way, such as socioeconomics of agriculture, ecology, agronomy or sustainability sciences. This work will result in the production of a mapping of regions characterized by similar biophysical and socio-economic conditions, composition of agricultural systems, landscape mosaic, and levels of poverty, food insecurity, and biodiversity.

Stakeholders (decision-makers and contributors to public policies at the central level, farmers' organizations, environmental protection organizations, local actors) are also mobilized throughout the research work and their knowledge, perceptions and preferences incorporated into the analyses produced. This involvement of stakeholders aims to co-construct policies for mainstreaming biodiversity in agriculture. 

The main expected results of this project are: 

• Production of a policy paper presenting the regional reference framework (socio-ecologically homogenous regions) and guidelines for mainstreaming biodiversity in each region;
• Assessment of the transferability of local success interventions within and across regions;
• Identification of the necessary political conditions at the national level for the implementation of local interventions;
• Comparative evaluation of different policy tools;
• Development of a simulation tool based on a farming system approach, that will allow policy makers to assess ex ante the impacts of alternative policies on the objectives of poverty reduction, and food security and biodiversity and ecosystem services improvement. 

The production of cartographic data at the local level contributes to the development of agricultural and land use policies at the national level. Moreover, the cross-referencing of these local data with participatory approaches (organization of workshops with producers and sharing of public policy options) contributes to the development of more transversal policies.

The project contributed to the training of local young students and technicians in applying surveys using tablets and using the Open Data Kit program. The project contributed to the exchange of knowledge between the researchers members of the project and the fieldwork guides regarding the identification of birds and vegetation species.

Find out more about the project's results: farsymabi.webnode.pt

Contact: 

• Julien Calas, research officer, AFD

According to a 2021 OECD report, two-thirds of African cities are at “extreme” risk of climate and water-related shocks. Violent climate events, heat waves and droughts are thus at the top of the risks incurred by urban areas. Rapid urbanization, unsustainable development and degradation of natural ecosystems exacerbate these risks. 

Nature-based solutions (NBS), which rely on natural ecosystems and the services they provide to human activities, address these urban challenges, while simultaneously providing benefits in terms of human well-being and biodiversity. However, they are still little integrated into urban planning processes and decision support tools available to planners. The lack of knowledge, data and experimentation on nature-based solutions therefore hampers their adoption and deployment. 

The objective of this research project is to enable, through the construction of a strategic framework, the deployment and scaling of nature-based solutions, in particular to address water and heat risks. The challenge is to improve the ecological resilience of cities by helping them identify the risks they must prepare for, to assess the potential of NBS to address them and to develop implementation and funding strategies for these NBS as part of the urban planning process. 

A fast, effective and practical methodology for assessing the potential of nature-based solutions will be made available to the cities of Addis Ababa and Kigali, which are the two pilot cities of this research project. The project is led by WRI, in partnership with the Addis Ababa Urban Development Department, the Ethiopian Institute of Architecture and the Rwanda Young Water Professionals Association. This methodology is intended to be adopted by other urban centers to allow a broader appropriation and mobilization of NBS in cities. 

At the methodological level, the construction of a strategic framework for nature-based solutions is interesting for two reasons:

• Identification of flood risks, heat islands, water supply and biodiversity potential of cities through the production of composite maps and the mobilization of satellite data;
• Participatory construction of the strategic framework through workshops with stakeholders of both cities to validate the priority areas of intervention and identify the NBS most adapted to the issues of each area.  

Developed by the WRI research team with the cities of Addis Ababa and Kigali, the Strategic NbS Framework can support cities in selecting and implementing appropriate nature-based solutions (NbS). 

By integrating globally available data sets with local data, it helps identify areas of a given city that are susceptible to extreme flooding and heat, as well as opportunities to expand urban green spaces and create ecological corridors. 

To ensure successful implementation, collaboration between public authorities, technical experts, and community leaders is essential. Using this framework, citywide maps can be quickly generated to identify priority areas. After a validation by city stakeholders, field experts then play a key role in designing effective NbS, tailored to local conditions. 

Although it has limitations in data detail, the Framework provides a solid starting point to build sustainable cities. Additional guidelines provide technical information on usable NbS, as well as case studies. These guidelines are available for download below: 

Download the guidelines

A webinar from the Research Conversations series was held to present the project's findings, and these research findings are summarized in a policy brief available for download below.

The research project identified a series of lessons to facilitate the deployment of nature-based solutions (NbS), taking into account the specific needs of cities. These lessons highlight the potential of nature in urban resilience planning and climate action:

• To increase awareness and institutional integration:

1. Set up multi-stakeholder processes to support dialogue and the prioritization of identified NbS.
2. Rely on case studies to facilitate understanding and engagement.

• To enhance data availability for more effective planning:

1. Combine local and global datasets to carry out multi-hazard assessments (flooding, urban heat islands, etc.).
2. Encourage citizen science initiatives for data collection, and ensure it is considered in decision-making.

• To strengthen planning and implementation linkages:

1. Establish dedicated governance structures (such as a mayoral committee) to coordinate various technical services involved and mobilize funding.
2. Develop common reference frameworks (design standards, guidelines, etc.) to strengthen political and public support.

• To secure long-term financing:

1. Integrate NbS into existing city investment programs.
2. Include strategies for public-private partnerships and use a multi-benefit assessment framework to demonstrate their long-term value.

• To adapt solutions to the local context and ensure monitoring:

1. Launch NbS pilot projects with monitoring systems to track their performance.
2. Integrate gender, equity, and inclusion considerations from the selection phase of each NbS.