Environmental crime – including illegal fishing, logging, mining, land conversion, wildlife trade, pollution and waste crime – is one of the fastest-growing illicit economies in the world, estimated at approximately USD 300 billion annually.

It is also one of the least understood risks sitting within global supply chains and financial systems. Yet for many organisations it represents a significant blind spot in understanding nature-related risks and opportunities.

Overlooking environmental crime can lead to an incomplete understanding of nature-related risks and poorer business decisions.

A new report – prepared for The Royal Foundation by Globalbalance and Chronos Sustainability – shows that this is changing.

Regulation and enforcement are tightening, making illegal goods and financial flows harder to conceal. Businesses are facing growing financial and operational consequences, including enforcement action, market exclusion, supply disruption and reduced access to capital.

Significantly, illegal activities can conceal ecosystem degradation, undermine traceability and mask the true condition of natural assets. This can lead to inaccurate assessments of nature-related risks, dependencies and opportunities, reducing the effectiveness of risk management, transition planning and investment decisions.

These risks are not theoretical. They are already materialising across sectors including food and agriculture, timber and paper, seafood, minerals and financial services.

Although exposure is widespread across supply chains, businesses can strengthen control through procurement, manufacturing, logistics, finance and governance.

The leadership choice

A two-speed market is emerging. Companies that are integrating environmental crime into their risk, compliance and sourcing systems are protecting market access, improving the quality of nature-related risk assessments, reducing operational disruption and maintaining confidence with investors, regulators and customers. Those that do not face increasing costs, exclusion and regulatory scrutiny, while making strategic decisions based on an incomplete understanding of nature-related risks.

Environmental crime cannot be eliminated, but exposure can be actively managed. The businesses best placed to navigate this are those that treat it not as a compliance footnote but as a core operational and strategic risk.

For CEOs, the priorities are:

• Identify exposure: assess high-risk commodities, geographies and counterparties.
• Manage and control risk: embed into financial crime, procurement and risk systems.
• Monitor and respond: strengthen traceability, verification, monitoring and response.

Acting now matters

Regulation is advancing, enforcement is strengthening, and the market is beginning to differentiate between businesses that can demonstrate control and those that cannot. United for Wildlife is convening the cross-sector response, bringing together business, finance and government to close the gaps that environmental crime depends on.

The Taskforce on Nature-related Financial Disclosures (TNFD) has recently published a discussion paper on environmental crime, highlighting how it can undermine organisations’ understanding of nature-related risks and opportunities and setting out practical considerations for incorporating environmental crime into nature-related assessments.

To find out more, learn about the work of United for Wildlife, read the full business case report and CEO briefing, and explore the TNFD discussion paper on environmental crime.