Nature Loss Threatens Profits: A Wake-Up Call for Mining and Power Companies

Nature Loss Threatens Profits : A Wake Up Call for Mining and Power Companies

The accelerating loss of nature and biodiversity is no longer just an environmental concern — it’s a direct financial risk. A new exploratory stress test conducted by Barclays Bank shows that mining and power firms could face earnings declines of up to 25% within five years, driven by both transition risks and physical risks linked to environmental degradation.

Mining Sector Faces the Hardest Hit

Barclays analyzed 250 operational mines connected to 30 mining clients and found that the sector could see profits drop by a quarter. This steep decline is primarily tied to transition risks, such as:

• Rising water prices

• Stricter pollution controls

• Expansion of protected areas

For resource-heavy industries like mining, these challenges can significantly disrupt supply chains, operations, and long-term profitability.

Power Companies at Risk Too

The study also covered around 9,000 power generation facilities owned by 40 European clients. While the impact on power companies is less severe compared to mining, earnings could still fall by 10%, mainly due to physical risks including:

• Flooding

• Droughts

• Climate-related operational disruptions

These risks are particularly heightened in degraded ecosystems, where resilience is already low.

Nature as a Systemic Financial Risk

Marie Freier, Barclays’ Group Head of Sustainability, emphasized:

“These risks are increasingly materializing across our clients' operations.”

With over half of global GDP dependent on nature, industries cannot afford to underestimate the economic value of ecosystem services — from pollination in agriculture to water supply in energy systems.

Yet, quantifying nature’s financial value remains in its early stages. That’s why Barclays developed a new methodology, inspired by the Taskforce on Nature-related Financial Disclosures (TNFD) LEAP framework, to measure and integrate nature-related risks across portfolios.

Financing Opportunities Amid Risks

While the risks are significant, the report also highlights opportunities. With the biodiversity financing gap estimated at $700 billion annually, financial institutions can play a pivotal role in bridging this gap through sustainable financing and green investment strategies.

Key Takeaways

• Mining profits could fall 25% in 5 years due to nature loss.

• Power companies may face a 10% hit from physical climate risks.

• Nature loss is now a systemic financial risk recognized globally.

• Sustainable financing offers a $700B annual opportunity.

Who is the CEO of Barclays?

The current Group Chief Executive (CEO) of Barclays is C. S. Venkatakrishnan (often called “Venkat”) — he was appointed in November 2021. home.barclays+2Wikipedia+2

Is Barclays a good bank to use?

“Good” is relative — it depends on the country, what banking services you require, and how comfortable you are with digital vs. branch services. Below are pros, cons, and things to watch out for.

Strengths & advantages

1. Global Reputation and Scale

Barclays is a major, long-established bank in the UK and globally. It has a track record and significant assets.

2. Competitive deposit products (in some markets)

In markets like the U.S., Barclays offers attractive rates on savings accounts and CDs, often with no monthly fees and no minimum deposit requirements. NerdWallet+2Forbes+2

3. Digital operations & low overhead (in markets without branches)

In markets where Barclays operates mostly online, they reduce physical branch costs and can pass savings to customers in the form of better interest rates. Business Insider+1

4. Regulatory oversight and credit ratings

Barclays is under regulatory supervision in the UK and internationally. Its credit rating is BBB+ (as of recent years) for certain debt instruments. home.barclays

 Weaknesses, risks & things to check

1. Limited or no branch presence in some countries

If you want to deposit or withdraw cash in person, or meet with someone face-to-face, that may be difficult if Barclays has no branches in your region. For example, in the U.S., Barclays is “online-only” (no branch network). NerdWallet+1

2. Past scandals / trust issues

Barclays was implicated in the LIBOR rate-rigging scandal in the 2000s. Wikipedia

Also, there have been regulatory issues, e.g. relationships with unregistered securities in the U.S. Business Insider+1

3. Customer experience & digital platform criticism

Some reviews mention that while the deposit rates are good, the digital experience and customer support might not always be stellar. Bankrate+2NerdWallet+2

There are mixed ratings from consumers about service reliability. ConsumerAffairs

4. Deposit insurance / coverage limits

Like all banks, there are limits to how much of your deposited funds are insured (e.g. FDIC in the U.S. covers up to USD 250,000 per depositor, per institution). Business Insider+2NerdWallet+2

5. Dependence on digital access

Because many services are online, access to stable internet, good security practices, and comfort with digital banking are necessary. Any outage or cyber risk can affect your access.