Legal risks related to biodiversity loss in the seafood and agriculture sectors

The report argues that biodiversity loss represents a material financial risk—categorised as physical, transition, and liability risks—for the seafood and agriculture sectors and their financiers. It details how these sectors depend on ecosystem services while simultaneously driving biodiversity loss through land-use change, pollution, and overexploitation. The document outlines specific legal risks under EU regulations, such as the EU Deforestation Regulation (EUDR) and the Corporate Sustainability Reporting Directive (CSRD), as well as national laws in France, Germany, and Norway. It concludes that robust due diligence and transparent disclosure are essential for mitigating these risks and ensuring long-term business viability.

• Biodiversity loss is a material financial risk for food system companies and their financiers, divided into physical risks (e.g., declining crop yields due to insect loss), transition risks (e.g., stricter government policies), and liability risks (e.g., litigation and regulatory penalties).
• The EU Deforestation Regulation (EUDR), effective for compliance from 30 December 2024, prohibits the trade of specific commodities—including palm oil, cattle, soy, coffee, cocoa, timber, and rubber—linked to deforestation after December 2020 or produced illegally.
• Companies face litigation risks under the Unfair Commercial Practices Directive (UCPD) and forthcoming EU green claims rules if environmental claims are misleading, vague, or lack independent verification; penalties can reach 4% of annual turnover.
• The EU Corporate Sustainability Reporting Directive (CSRD) mandates that most EU listed and large non-listed companies report material environmental and financial information, including specific standards for biodiversity and ecosystems (ESRS E4).
• National laws in France, Germany, and Norway impose due diligence obligations on large companies to prevent serious environmental and human rights impacts across their supply chains, with failure to comply leading to injunctions or fines.
• UK financial services firms are subject to the FCA's 11 Principles for Business, which can lead to regulatory enforcement if insurers facilitate criminal activity, such as illegal, unreported, and unregulated (IUU) fishing.
• The global food system is a primary driver of biodiversity loss, with the seafood sector specifically impacted by overfishing, by-catch, and aquaculture-related nutrient pollution and alien species introduction.

APA

ClientEarth (2023). Legal risks related to biodiversity loss in the seafood and agriculture sectors. https://www.clientearth.org/media/cnpls5e0/legal-risks-related-to-biodiversity-loss-in-the-seafood-and-agriculture-sectors-clientearth.pdf

Chicago

ClientEarth. Legal risks related to biodiversity loss in the seafood and agriculture sectors. 2023. https://www.clientearth.org/media/cnpls5e0/legal-risks-related-to-biodiversity-loss-in-the-seafood-and-agriculture-sectors-clientearth.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=Legal risks related to biodiversity loss in the seafood and agriculture sectors |date=September 2023 |url=https://www.clientearth.org/media/cnpls5e0/legal-risks-related-to-biodiversity-loss-in-the-seafood-and-agriculture-sectors-clientearth.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2023legal, author = {{ClientEarth}}, title = {{Legal risks related to biodiversity loss in the seafood and agriculture sectors}}, institution = {ClientEarth}, year = {2023}, month = sep, url = {https://www.clientearth.org/media/cnpls5e0/legal-risks-related-to-biodiversity-loss-in-the-seafood-and-agriculture-sectors-clientearth.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }