A new body of research is revealing a powerful but often overlooked truth healthy ecosystems are directly linked to stronger business performance. According to a study conducted in New Zealand, companies operating in regions with richer biodiversity consistently show higher productivity, sales, and profits compared to those in degraded environments.
The research analyzed more than 117,000 business records from 2009 to 2022 and combined them with detailed environmental indicators, including river health, drought exposure, land use patterns, and invasive species. Using an economic framework known as the Cobb-Douglas production model, researchers measured how environmental quality often called “natural capital” influences firm output.
The findings suggest that a 1% improvement in natural capital is associated with approximately 0.13% higher sales and 0.15% higher profits on average. These effects remained stable across multiple biodiversity and ecosystem health indicators, reinforcing the link between nature and economic productivity.
However, the study also highlights a trade-off. Regions with more intensive infrastructure development, such as roads and buildings, tend to have lower biodiversity but higher short-term economic output. This indicates that while businesses can grow in degraded environments, they may lose the productivity advantages provided by healthy ecosystems.
The relationship between nature and business performance became even stronger following major environmental policies in New Zealand, including the Predator Free 2050 programme and reforms such as freshwater protections, tree planting incentives and the Zero Carbon Act. After these interventions the productivity gains linked to natural capital increased further, particularly in the first year after implementation.
Agriculture and forestry showed the strongest benefits, where a 1% increase in natural capital was linked to up to 0.71–0.81% higher sales compared to the average economy-wide effect. Researchers say this is because healthy soils, clean water, lower pest pressure, and intact vegetation directly support production and reduce operational costs.
Service industries, construction, and retail also showed positive effects, though the impact was more distributed across different environmental factors.
Experts say the findings strengthen the argument that nature should be treated as an economic asset rather than just an environmental concern. Globally, ecosystem services are estimated to contribute trillions of dollars in value each year, yet they rarely appear in corporate financial accounts.
The study concludes that investing in ecological restoration may not only benefit biodiversity but also improve long-term economic productivity, especially in countries dependent on agriculture, forestry, and natural resources.