The economic risks arising from rapid biodiversity loss are not currently priced into global financial markets. The findings suggest that many countries could face higher sovereign debt risks and increased borrowing costs. The research developed a model that uses sovereign credit ratings to take into account environmental damage, which they call a 'biodiversity-adjusted sovereign credit ratings model'. The study suggests that up to USD 83 trillion in global assets may be misvalued due to the exclusion of biodiversity-related risks. 

To make their projections, the researchers adapted the methodology that the big credit rating agencies use to gauge sovereign debt risk, and found that even a partial destruction of critical ecosystems would result in an unprecedented one hundred and sixty-two billion dollars of annual sovereign debt interest payments worldwide. Key natural systems such as wild pollinators, marine fisheries, and tropical forests provide essential services that support economic productivity. The degradation of these systems disrupts crop pollination and seafood production, costing the world about two trillion dollars per year in loss of gross domestic product.

The study highlights the fact that ecological degradation is a source of decline in overall economic performance and that this will make it more difficult to meet the obligations under existing debts. This financial burden, of course, increases countries' risk premiums, meaning they have to pay more to borrow funds. It is likely to make a strong negative impact on creditworthiness in several key developing economies. The study suggests, for example, that India's rating could be downgraded by four notches on the usual 20-point scale, and China's potentially by more than five points. This downgrade could increase India's annual debt-servicing costs by an estimated ₹50,000 crore. China seven billion dollars per annum as a result of the annual debt interest bill.

Such sovereign downgrades would affect more than just government balance sheets. They would also affect businesses, financial institutions, and pension funds across domestic economies impacting businesses, commercial financial institutions, and long-term pension funds. According to the economists involved in the project, the results mirror the structural weaknesses that have come to light in past financial crises, including the global financial crisis in 2008. Similar to the lessons of the 2008 global financial crisis, the study highlights the risks of ignoring systemic threats. The authors warn that failing to incorporate ecological risks into mainstream credit assessments could create similar systemic vulnerabilities.

Other countries will have equally large ratings cuts under the model, with Indonesia, Bangladesh and Malaysia expected to see a rating decline of 4 to 6 notches. The study, which surveyed twenty-three countries housing more than five billion people, could significantly increase sovereign debt risks for several governments in the region, thanks to these biodiversity-related adjustments. The projected increase in debt-servicing costs is significant when compared with international conservation funding targets. The interest alone would be almost three-quarters of the estimated total of all payments for overseas development assistance provided around the world each year. Additionally, these costs would represent a substantial share of global biodiversity financing targets set to unlock two hundred billion dollars a year across virtually two hundred countries for safeguarding natural habitats.

The authors argue that the cost of protecting biodiversity is far lower than the long-term economic consequences of biodiversity loss. They call on market regulators, central banks, and credit rating agencies to acknowledge these nature-related risks and incorporate them into the mainstream of financial models as soon as possible. The researchers note that sovereign bonds often have maturities of 30 to 50 years, and that not accounting for environmental degradation would be pricing the instrument incorrectly – its credit rating could be vastly different when they become due. Finally, the study argues that treating nature as an unlimited resource rather than an economic asset could threaten global financial stability.