Biodiversity Risk & Opportunities

A Wake‐up Call for Singapore Businesses

Valencia Fortuna
October 29, 2025

Why biodiversity can make or break Singapore’s economy

Singapore may be an island nation, but its economy lives and dies by what happens far beyond its shores.

Over 90 % of our food and raw materials come from abroad¹ . Yet coral reefs around Indonesia, cacao plantations in West Africa and peatlands in Sumatra are all under stress from human activities and climate change.

The Intergovernmental Science‑Policy Platform on Biodiversity and Ecosystem Services (IPBES) warns that up to one million species could disappear in the coming decades, a rate of extinction far beyond anything in recorded history².

This is not a distant “environmental” issue, it is a direct threat to supply chains, input costs and brand reputations.

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Did you know? Over 90% of Singapore’s food is imported, which means one drought in West Africa can raise the cost of your morning kopi by 25%.

A recent Beazley survey of Singapore executives found that climate risks barely feature on the corporate radar. Only 22 % of surveyed executives ranked environmental and climate risk among their top concerns despite a year of unprecedented storms, floods and fires³.

The report also notes that many firms believe they are prepared for climate‑related losses, yet claims data suggests otherwise⁴. This complacency is dangerous.

According to PwC and the Asia Investor Group on Climate Change, 53% (US$18 trillion) of Asia‑Pacific’s gross value add is generated by sectors that are moderately or highly dependent on nature⁵.

20% (US$7 trillion) comes from agriculture, fisheries, forestry and construction, industries extremely vulnerable to biodiversity loss⁶. When pollinators, wetlands and forests disappear, profits vanish with them.

Singaporeans’ own consumption patterns illustrate the exposure.

Each resident consumes roughly 22 kg of seafood per year, yet local aquaculture supplied only 7.8 % of consumption in 2021 ⁷.

Even after recent improvements, eggs, vegetables and seafood farms produced 34%, 3% and 6% respectively of Singapore’s total food consumption in 2024⁸.

In other words, more than 90 % of our food still comes from overseas⁹.

This dependence means that ecological shocks elsewhere quickly translate into higher prices and supply shortages at home.

What are drivers that amplify risk, and how do they hit bottom lines?

1. Land and sea‑use change

When natural landscapes are converted for farming, housing, or infrastructure, ecosystems lose their ability to regulate water, store carbon, and buffer storms.

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Around 75% of terrestrial and 66% of marine environments worldwide have already been significantly altered ¹⁰.

Tropical peatlands drained for oil‑palm plantations repeatedly catch fire; Singapore’s nine‑week haze episode in 2015 cost the city between S$700 million and S$1.83 billion in healthcare bills, business losses and tourism declines ¹¹.

Yet, at home, Singapore’s local supply buffers are thin.

While local egg output grew by 13% in 2024 thanks to farm upgrades, vegetable production declined 3 % and seafood production fell 14% ¹².

Even with productivity gains, local vegetable farms supplied only 3% of domestic demand, and seafood farms 6% ¹³. When export bans or crop failures occur abroad, restaurants and retailers have little cushion.

Regulators are also tightening standards.

The European Union’s upcoming Deforestation‑Free Regulation will require companies trading in cattle, cocoa, coffee, oil palm, rubber, soy and wood to prove that their products are not linked to deforestation after 31 December 2020, with obligations applying from 30 December 2025 ¹⁴.

Firms that cannot trace their supply chains will be barred from the EU market¹⁵.

This is a wake‑up call for Singaporean companies exporting cocoa, timber, palm‑oil or rubber into Europe and, soon, to China.

2. Over‑exploitation of resources

Humanity’s appetite for food, fuel and minerals has tripled since 1970, straining oceans and forests.

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The UN’s Food and Agriculture Organization reports that 35.5% of global fish stocks are now overfished ¹⁶.

Without pollinators such as bees, the market value of crops could fall by US$235, 577 billion per year, and the net loss to consumers and producers could exceed US$160 billion¹⁷.

For Singapore, which imports most of its cocoa, coffee and seafood, over‑exploitation translates directly into higher input costs and reputational risk when customers question the sourcing of fish or chocolate.

The same pattern plays out on land.

Singapore is among the world’s top sand importers; after Indonesia’s 2007 export ban, 90% of supply vanished, threatening major infrastructure projects such as the Circle Line MRT and integrated resorts, and forcing the government to absorb 75% of price hikes to keep public works going.

Over-exploitation therefore translates directly into construction-sector cost inflation and supply chain fragility.

3. Pollution

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Agricultural runoff, plastics, and industrial effluent are creating more than 400 coastal “dead zones” covering 245 000 km² worldwide (IPBES).

In the Gulf of Mexico alone, nutrient pollution costs seafood and tourism industries about US$82 million a year. Similar nutrient overloads in Asian seas threaten Singapore’s seafood supply chains.

Closer to home, haze from Indonesian peat fires remains a recurring reminder of pollution’s economic cost. The 2015 fires cost Indonesia US$16 billion, while Singapore suffered losses of up to S$1.83 billion ¹⁸. Firms faced absenteeism, health-care expenses, and lost retail traffic.

Pollution is thus both a production-cost driver and a compliance risk as governments tighten environmental controls.

A more recent event, the June 2024 oil spill at Pasir Panjang Terminal, released about 400 tonnes of low-sulphur fuel oil, contaminating beaches at Sentosa, East Coast, and the Southern Islands.

Clean-ups and ecological restoration cost millions, reminding businesses that pollution imposes hidden liabilities and reputational damage ¹⁹.

Historically, Singapore spent S$200–300 million to clean up the Singapore River and Kallang Basin, a massive multi-year effort in the 1980s that removed tons of sludge and industrial waste.

These examples show how pollution cleanup costs far exceed prevention costs, reinforcing the economic logic of stronger environmental management²⁰.

4. Invasive species

When non-native species spread into new environments, they can outcompete local species and transmit diseases. As a global trans‑shipment hub, Singapore is vulnerable to invasive organisms hitching rides on cargo and ballast water.

Singapore’s port arrival tonnage welcomed about 3.11 billion tonnes of cargo annually²¹.

Global pests such as the red imported fire ant have already inflicted billions of dollars in damages elsewhere; they could easily arrive here without vigilant biosecurity.

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Did you know? A NeoBiota study estimated that invasive species have cost Singapore US$1.72 billion since 1975, mostly from mosquito‑borne diseases & over 90% of impacts aren’t even counted yet ²²

5. Climate change

Nature and climate are inseparable, and when one falters, the other amplifies. When extreme heat hit West Africa in 2023, cocoa harvests shrank and cocoa prices jumped more than 160 %, driving futures above US$8,000 per tonne²³.

By April 2024 prices surged to US$10.97 per kilogram as erratic rain and pests ravaged crops²⁴.

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Brazil’s coffee farmers faced droughts and frosts that sent arabica futures soaring to US$4.40 per pound, after a 70% rally in 2024 and another 25% jump in early 2025.

At the ecosystem level, the same intertwining interaction is playing out too.

Forests store 80% of terrestrial biodiversity and absorb roughly 2.6 billion tonnes of CO₂ per year.

When deforestation and warming oceans kill corals and mangroves, the loss of natural storm buffers forces insurers to raise premiums and governments to pour billions into hard infrastructure.

Singapore has already spent over S$2 billion on drainage upgrades since 2011 and plans to invest another S$1.4 billion in the next five years to cope with more intense storms.

The country estimates that protecting against sea‑level rise could require S$100 billion this century²⁵.

These are costs that will ultimately filter through to businesses via taxes, insurance premiums and service charges.

Turning risk into opportunity

We saw that the costs are real, and growing too. Although these are daunting, forward‑thinking companies can turn biodiversity stewardship into a competitive advantage.

1. Nature‑based infrastructure saves money

Recent Sustainable Asset Valuation assessments by the International Institute for Sustainable Development show that NBI (nature-based infrastructure) costs about 50% less than grey infrastructure and creates 28% more value²⁶.

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Globally, diverting 1% of infrastructure spending to NBI could save US$248 billion per year and deliver US$489 billion in extra benefits.

Singapore’s Bishan, Ang Mo Kio Park proves this works in practice, delivering flood protection and biodiversity gains at a relatively modest cost²⁷.

Firms that co‑invest in mangrove restoration or wetland buffers around factories or data centres can reduce insurance premiums and claim emerging blue‑carbon credits.

2. Market differentiation and revenue growth

Consumers in Asia‑Pacific increasingly valuing sustainability.

Surveys in 2024 found that 44.9 % of APAC consumers prioritise sustainably packaged products and 67.9% are willing to pay a premium for them.

Certification schemes like Fairtrade, Forest Stewardship Council and Marine Stewardship Council command higher margins and ensure access to markets like the EU, which will soon require deforestation‑free products²⁸.

Singaporean firms that embed traceability and regenerative practices into their cocoa, coffee, timber and palm‑oil supply chains will turn compliance into a competitive edge.

3. Access to capital

Financial regulators are beginning to embed nature risk into stress tests.

Early adopters of frameworks such as the Taskforce on Nature‑related Financial Disclosures (TNFD) or the Science‑Based Targets for Nature (SBTN) will secure preferential financing, attract impact‑driven investors and shape emerging standards.

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Did you know? US$18 trillion of Asia-Pacific’s economy is tied to nature. Banks are already pricing this into loans.

A strategic action plan

For executives wondering where to start, a practical road map involves few solutions:

Map your value‑chain dependencies. Tools like the TNFD LEAP framework, WWF’s Risk Filter and UNEP’s ENCORE can help prioritise hotspots.
Set biodiversity performance targets. Start committing to deforestation‑free sourcing (e.g. palm oil by 2025), regenerative agriculture for cocoa and coffee, and supplier scorecards that include biodiversity indicators. Joining the Science‑Based Targets for Nature (SBTN) keeps your strategy aligned.
Apply the avoid, reduce, restore, offset hierarchy. Avoid high‑risk sourcing regions where possible; reduce impacts through innovation (e.g. precision agriculture); restore degraded areas or support community conservation; and only offset residual impacts through credible, science‑aligned projects.
Turn nature‑positive solutions into a competitive advantage. Identify products or services that could command a premium because they are biodiversity‑positive. This could include eco‑tourism offerings, sustainable F&B brands or green infrastructure services.

Questions executives should be asking today

Do we understand our supply‑chain exposure to biodiversity risks?
Have we mapped key commodities and ports against ecological hotspots?
Are we accounting for the economic value of ecosystem services?
What happens to our cost structure if pollinators decline or mangroves vanish?
Are we positioned to benefit from new disclosure rules and sustainable product markets? How will EU and Chinese regulations affect our exports?
Are we investing enough now to avoid much higher costs later?
Flood protection, commodity price hedging and regulatory compliance become more expensive as ecosystems degrade.
How do we insulate our operations from biodiversity‑driven volatility?
Have we diversified suppliers, built buffer stocks or invested in local production?
Can we turn nature‑positive solutions into a competitive advantage?
Which green products or services could command a premium in our markets?

Conclusion: from Risk to Resilience

The evidence is clear: land degradation, overfishing, pollution, invasive species and climate change are already shaping business risk in Singapore.

Yet companies that understand and manage these risks can unlock cost savings, secure supplies, attract talent and access capital.

Biodiversity stewardship is more than just fighting greenwashing; it is about future‑proofing your business.

To dive deeper into more in-and-outs of biodiversity, as well as how to map, measure and monetise biodiversity risk and to turn nature into an asset rather than a liability, join our upcoming AlterCOP-special masterclasses & workshops: