Over 130 firms demand end to environmentally harmful subsidies worldwide
<p>More than 130 companies and financial institutions have written to governments worldwide to demand an end to public subsidies that damage nature. The signatories represent over $600 billion in combined annual revenues and approximately $4.7 trillion in managed investments. Business for Nature and the Finance for Biodiversity Foundation coordinated the appeal, which puts fresh pressure on governments to redirect public money away from environmentally harmful activities.</p><p>For UK businesses, this matters because subsidy reform is tied directly to biodiversity targets that affect procurement rules, supply chain due diligence, and disclosure requirements. Companies trading internationally or supplying public sector contracts need to understand how nature-related policy is evolving. The letter signals where regulatory momentum is building.</p><p>The campaign arrives at a moment when nature has moved from peripheral concern to board-level risk. Businesses face growing scrutiny over biodiversity impact, particularly through supply chains. Consequently, what governments choose to fund or penalise will shape competitive conditions across sectors from agriculture to construction.</p><h2>Global biodiversity framework sets subsidy reform deadline</h2><p>In December 2022, governments adopted the Kunming-Montreal Global Biodiversity Framework at the UN biodiversity conference, known as COP15. Under that agreement, countries committed to identify harmful subsidies by 2025. They then pledged to eliminate, phase out or reform incentives damaging to biodiversity by at least $500 billion per year by 2030.</p><p>That $500 billion target is now the official benchmark. It sits alongside 22 other targets covering protected areas, restoration, and genetic diversity. However, subsidy reform is seen as foundational because public money often drives the activities that degrade ecosystems in the first place.</p><p>Business for Nature estimates that the world currently spends at least $1.8 trillion annually on subsidies that encourage unsustainable production, carbon-intensive consumption, resource depletion, and ecosystem degradation. The gap between that figure and the $500 billion commitment shows the scale of the task.</p><p>The framework does not dictate which subsidies must go. Instead, it requires governments to assess existing support schemes, determine which ones harm biodiversity, and reform or remove them. Some subsidies may be redirected rather than scrapped outright, particularly where communities depend on them.</p><p>Reuters reported in July 2024 that 132 companies signed an earlier version of the letter. Signatories included Unilever, L'Occitane, Iberdrola, Teck Resources, Danone, RWE and Holcim. That group represented combined revenues of $1.1 trillion. The latest letter expands the coalition and sharpens the ask.</p><p>Both letters argue that voluntary corporate action will not be sufficient on its own. Governments must create the policy conditions that require businesses and financial actors to protect and restore nature. The appeal frames subsidy reform as a necessary complement to corporate sustainability commitments.</p><h2>What the signatories are calling for</h2><p>The letter urges governments to reform public policies and spending so they no longer channel finance into nature-damaging sectors. It does not name specific subsidies but pushes for systemic change across agriculture, energy, transport, and industrial support.</p><p>Business for Nature's accompanying policy recommendations set out a process. First, governments should assess existing harmful subsidies. Second, they should build a reform roadmap in consultation with stakeholders. Third, they should ensure a just transition supported by accountability and governance structures.</p><p>The emphasis on stakeholder consultation reflects concern that abrupt subsidy removal could harm vulnerable communities or small producers. Reform is expected to be phased, with support for affected workers and regions. Nevertheless, the timeline is tight given the 2030 deadline.</p><p>Financial institutions backing the letter manage trillions in assets. Their involvement suggests that biodiversity risk is increasingly priced into investment decisions. Subsidies that prop up harmful practices create stranded asset risk, regulatory uncertainty, and reputational exposure.</p><p>For example, subsidies supporting intensive agriculture can accelerate soil degradation and water pollution. When those subsidies are reformed, land values and business models may shift. Investors want governments to signal the direction of travel early so capital can adjust.</p><h2>UK businesses face linked procurement and disclosure pressure</h2><p>Subsidy reform in other jurisdictions will affect UK companies through several channels. Supply chains are the most direct. If a trading partner phases out support for ecologically damaging fisheries or forestry, commodity prices and sourcing patterns will change. Businesses relying on those inputs need to anticipate disruption.</p><p>Public procurement is another pressure point. Central government buyers in England must now evaluate bidders' carbon reduction plans under Procurement Policy Note 06/21. Although that note focuses on net zero, biodiversity considerations are entering tender criteria alongside climate. Subsidy reform abroad may set expectations for what UK suppliers should demonstrate.</p><p>Disclosure requirements are tightening as well. The Task Force on Nature-related Financial Disclosures published its final recommendations in September 2023. Large UK companies and financial institutions are beginning to adopt the TNFD framework voluntarily. Over time, regulators are expected to mandate nature-related reporting, mirroring the trajectory of climate disclosure.</p><p>Companies that report under TNFD must identify dependencies and impacts on nature. That process often reveals exposure to subsidies, either as direct recipients or through suppliers. If those subsidies are reformed, the financial and operational implications must be disclosed. Businesses without visibility of their nature footprint will struggle to respond.</p><p>Trade policy is also shifting. The EU Deforestation Regulation, which took effect in June 2023, bans imports of commodities linked to recent deforestation. Subsidy reform is conceptually related because both aim to remove incentives for ecosystem destruction. UK exporters to the EU must prove supply chain compliance. Similar rules may emerge elsewhere.</p><p>Insurance and credit markets are starting to factor in nature risk. Lenders increasingly ask about biodiversity impact when underwriting facilities. Insurers may exclude or reprice cover for activities that harm ecosystems, especially where subsidies have masked true costs. Consequently, access to capital may become conditional on nature performance.</p><p>The UK government has not yet published a comprehensive plan to align domestic subsidies with biodiversity goals. However, the Environmental Improvement Plan 2023 commits to halt the decline of nature by 2030. Achieving that target will require reform of agricultural support, land use incentives, and infrastructure subsidies.</p><p>Post-Brexit agricultural policy offers a test case. The Environmental Land Management schemes replace EU direct payments with funding tied to environmental outcomes. This shift represents subsidy redirection in practice, though the pace and scale remain contested. Farmers and land managers must adapt business models accordingly.</p><h2>Five key facts about the subsidy reform push</h2><ul><li>More than 130 companies and financial institutions have signed the open letter, representing over $600 billion in revenues and $4.7 trillion in managed investments.</li><li>The Kunming-Montreal Global Biodiversity Framework requires governments to identify harmful subsidies by 2025 and reform at least $500 billion per year by 2030.</li><li>Business for Nature estimates that at least $1.8 trillion is spent annually on subsidies that drive nature destruction, highlighting a significant gap between current spending and reform targets.</li><li>A previous letter in July 2024 was signed by 132 companies with combined revenues of $1.1 trillion, including major multinationals such as Unilever, Danone, and Iberdrola.</li><li>The letters argue that voluntary corporate action alone will not suffice and that governments must create policy conditions requiring businesses to protect and restore nature.</li></ul><h2>Practical steps for businesses exposed to subsidy risk</h2><p>Understanding your exposure is the starting point. Map which parts of your supply chain rely on subsidised inputs or production methods. Agriculture, energy, and transport are the highest-risk sectors, but manufacturing and construction also depend on subsidised resources.</p><p>Engage with suppliers to assess their subsidy dependencies. If a supplier benefits from support that may be reformed, ask how they plan to adapt. Build contingency into contracts where possible. Diversifying sources or switching to alternative materials may reduce vulnerability.</p><p>Review your disclosure obligations under emerging frameworks like TNFD. Even if formal reporting is not yet mandatory, early adoption builds capability and signals credibility to investors and customers. We offer <a href="https://sbs.eco/compliance/">compliance support for carbon and nature-related reporting</a> tailored to UK SMEs.</p><p>Monitor policy developments in your key markets. Subsidy reform will not happen uniformly. Some governments will move faster than others, creating competitive disparities. Tracking where change is coming allows you to adjust strategy before competitors do.</p><p>Consider how reform could create opportunity as well as risk. Businesses that reduce nature impact ahead of regulation may gain access to new markets, preferred supplier status, or lower-cost finance. Nature-positive credentials are becoming commercial differentiators, particularly in public procurement.</p><p>Training your team on biodiversity and subsidy issues builds internal capacity. Our <a href="https://sbs.eco/sbs-academy/">SBS Academy</a> provides workshops on nature risk, supply chain due diligence, and environmental policy. Informed teams make better decisions when external conditions shift.</p><p>Collaborate with industry peers where appropriate. Sectoral approaches to subsidy reform can spread costs and reduce competitive disadvantage. Trade bodies and industry groups are increasingly active on nature policy. Participating in those discussions helps shape outcomes rather than simply reacting to them.</p><p>Assess your eligibility for government support that aligns with nature-positive goals. As harmful subsidies are reformed, funding for restoration, sustainable land management, and green infrastructure is likely to grow. Positioning your business to access that support can offset transition costs.</p><h2>Where to find authoritative guidance on subsidy reform</h2><p>The UK government's Environmental Improvement Plan sets out domestic biodiversity commitments and can be accessed through the <a href="https://www.gov.uk/government/publications/environmental-improvement-plan">Department for Environment, Food and Rural Affairs</a>. It provides the policy context for how subsidy reform may unfold in the UK.</p><p>Business for Nature publishes detailed campaign materials and policy briefs on environmentally harmful subsidies. Their <a href="https://www.businessfornature.org/">website</a> includes resources on the Kunming-Montreal Framework and corporate engagement with governments.</p><p>The text of the Kunming-Montreal Global Biodiversity Framework is available from the <a href="https://www.cbd.int/gbf">Convention on Biological Diversity</a>. Target 18 specifically addresses subsidy reform and is the reference point for the $500 billion commitment.</p><p>The Task Force on Nature-related Financial Disclosures offers guidance for companies starting to assess nature-related risks and opportunities. The framework and supporting materials are published on the <a href="https://tnfd.global/">TNFD website</a>.</p><p>For sector-specific advice on agricultural subsidy reform, Defra's guidance on Environmental Land Management schemes provides practical detail for land managers. Information is available through the <a href="https://www.gov.uk/government/collections/environmental-land-management-schemes-for-farmers-and-land-managers">GOV.UK environment and countryside pages</a>.</p>
