Environmental degradation is no longer only an ecological issue. In many parts of the world, it is becoming a driver of instability.
Discussions about global and national security increasingly focus on how to protect the natural world—not just as an environmental concern, but as the foundation of social and political stability. Ecosystem degradation, biodiversity loss, mass displacement, and geopolitical resource competition cannot be dismissed as side issues. They are among the primary drivers of modern instability.
In resource-rich but security-poor regions, ecosystem erosion harms the planet. But it also weakens livelihoods, intensifies competition over land and water, and amplifies local grievances, often to the point where entire projects become untenable.
These are the realities that conflict-sensitive environmental standards (as they feature in the ESG toolbox) seek to address.
I have spent much of my career working at the intersection of conservation, security, and financial integrity. Across fragile contexts, one pattern emerges consistently: Where biodiversity is degraded and ecosystems lose their resilience, social fractures widen and risk multiplies.
Traditional environmental standards undoubtedly provide value, but they tend to assume relatively stable governance and predictable risk environments. But these characteristics often don’t apply to areas that are hubs for investment—particularly in extractive and resource-dependent sectors.
So, the conflict-sensitive application of environmental standards operates from a different premise. Its core idea is that environmental decisions influence social dynamics and power relations. Within this, biodiversity—the basis of life, food systems, and climate resilience—plays a central stabilising role. Ecosystems are not passive backdrops, but actively shape how communities live, survive, interact, and respond to external pressures.
Climate change as a force multiplier
Climate change compounds these dynamics. In fragile environments, climate shocks rarely act alone. They interact with degraded ecosystems to accelerate resource scarcity and displacement. Consider the recent flash floods in Indonesia. When a flood hits degraded land where a forest once stood, the results are catastrophic because the natural 'buffer' is gone. We see the immediate, heartbreaking loss of life, homes, and livelihoods.
But the crisis doesn't end when the water recedes. The loss of habitat forces wildlife, like orangutans and elephants, into human settlements, sparking dangerous human-wildlife conflicts. It triggers a secondary wave of food scarcity and waterborne diseases. Ultimately, when a forest falls in Indonesia, the impact is not local; it is a global loss of biodiversity and a carbon sink. This isn't just an Indonesian problem—it’s a global systemic risk that affects us all.
When biodiversity is intact, ecosystems provide buffers. Forests regulate water, soils retain moisture, and diverse landscapes support adaptive livelihoods. But when these systems start to break down, climate stress translates more directly into conflict pressure.
Therefore, from an environmental standards perspective, climate risk cannot be separated from ecosystem health or social stability. And while projects that fail to account for this interdependence may appear viable on paper, they can unravel quickly when environmental stress begins to reshape local realities.
When ecosystem degradation becomes a security risk
These dynamics are clearly visible in contexts such as South Sudan, where I have worked extensively investigating deforestation and the illegal timber trade.
In South Sudan, forests and woodlands do not just represent biodiversity assets. They function as ecological infrastructure, providing fuel, food, and grazing buffers, generating income in a landscape that has been shaped by prolonged conflict and displacement. They even help people maintain deep cultural ties to their land—and, ultimately, their identities.
So, as ecosystems degrade and tree cover diminishes—driven by land clearing, illegal logging, charcoal production, and weak enforcement—the consequences cascade outward. Communities must travel further to access basic resources, increasing their exposure to conflict and violence.
In countries throughout the world, armed groups and criminal networks have been known to exploit informal resource markets, using profits from charcoal and timber to sustain their operations and fuel insecurity.
What begins as ecosystem degradation evolves into a security issue. Yet these dynamics may remain invisible within conventional environmental frameworks, despite their profound implications for operational continuity and risk.
Why biodiversity remains underweighted in environmental frameworks
Cases like South Sudan also highlight a broader, multi-sector challenge. Where biodiversity is acknowledged in environmental frameworks, it is rarely treated as foundational. Instead—and all too frequently—it may be addressed through carbon offsets or discrete conservation initiatives. But when these are detached from core business decisions, they fail to address the heart of the challenge.
A conflict-sensitive application of environmental standards seeks to ensure that biodiversity is positioned as integral to risk management and value preservation. Healthy ecosystems support livelihoods, reduce resource competition, and help absorb climate shocks. When they collapse, the long-term costs surface elsewhere: in security budgets, community opposition, disrupted supply chains, or reputational damage.
Seen through this lens, it’s clear that biodiversity needs to be recognised as a stabilising system that is not only vital to the environmental component of ESG, but that underpins the social and governance dimensions as well.
From risk management to stewardship
A conflict-sensitive approach to environmental standards shifts the focus from reactive mitigation to proactive stewardship. It calls for enhanced due diligence systems that understand local ecological dependencies, grievance mechanisms that function as early warning systems, and ongoing dialogue that recognises that communities are partners and not stakeholders to be managed.
This approach to ESG also requires financial transparency. In fragile contexts, environmental degradation is often sustained by illicit financial flows that intersect with corruption and organised crime.
During one investigation in the region, our team uncovered how timber exports were used to conceal wildlife trafficking, with ivory and pangolin scales hidden within legitimate shipments. The scheme relied on falsified transit documentation and corruption within the supply chain.
This case demonstrates that we aren't just dealing with loggers or poachers—we are engaged with organised criminal networks that have mapped out the entire value chain to ensure their illicit products reach global markets undetected.
ESG strategies that ignore these linkages risk addressing the symptoms of the problem, while simultaneously sustaining and enabling its root causes.
So stewardship, in this sense, is about integrity: ecological, social, and financial.
A more rational way
As environmental degradation continues, amplified by climate change, companies ultimately face a stark choice. They can continue to treat the environment as a passive source of short-term value, externalising costs until the social fabric tears. Or they can invest in stewardship, reinforcing the ecosystems and relationships their operations depend on.
From a risk perspective, strategies that degrade the ecological systems underpinning local stability ultimately undermine the conditions required for sustainable investment.
Conflict-sensitive environmental standards recognise that the most sustainable returns are generated not by maximising extraction from land and communities, but by ensuring that ecosystems remain functional, livelihoods remain viable, and trust remains intact. The most successful investors understand that they are part of a living system—and that the system must be supported to thrive if their investments are to thrive too.