Nature’s Role in Sustaining Economic Progress and Human Development
IEP Bocconi Hosts Consultation with UNDP’s Human Development Report Office. A commentary by Antonio Gonzales, and Josefin Pasanen
The Institute for European Policymaking (IEP) at Bocconi University recently hosted the UNDP’s Human Development Report Office (HDRO) to discuss the emerging framing of the 2026 Human Development Report (HDR 2026).
The exchange centered on a pressing question: how do climate change, biodiversity loss, and ecological stress shape economies, and how can development choices strengthen the relationship between people and nature?
The Human Development Report Office
Since 1990, HDRO has produced the annual Human Development Reports, the UN’s flagship publications on global development.
These reports shifted the focus from GDP alone to a broader view of progress centered on people’s capabilities and freedoms. Recent reports have focused on what HDRO termed a “new uncertainty complex”.
This is a period marked by overlapping and interacting challenges. The 2023–2024 HDR examined political polarization, showing how distrust and identity-driven divisions can obstruct collective action on global challenges.
The 2025 HDR turned to artificial intelligence and human agency, exploring how AI can either widen inequalities or expand human capabilities depending on the choices made by people and institutions.
HDRO is widely known for the Human Development Index (HDI), which combines life expectancy, education, and income into a single measure.
Over time, it has introduced complementary indicators such as the Multidimensional Poverty Index (MPI) that looks at poverty beyond income, and the Planetary Pressures-Adjusted HDI, which factors in carbon emissions and material footprint.
The 2026 HDR builds on this legacy by examining human development prospects under growing planetary pressures and assessing progress toward more positive, mutually beneficial relationships between people and the planet.
Nature’s Role in Sustaining Economic Progress and Human Well-Being
In recent years, something important has shifted in how we talk about nature and the economy. Forests, rivers, soils and biodiversity are increasingly treated not as background scenery, but as natural capital that generates the ecosystem services on which economies and societies depend.
This has been a major advance in recognizing nature’s central role in sustaining economic progress and human wellbeing.
Initiatives such as the Taskforce on Nature-related Financial Disclosures (TNFD), growing corporate commitments on biodiversity, and expanding efforts to integrate environmental risks into financial decision-making (NGFS, 2023) are examples of this shift.
Yet a disconnect remains. One insight from the consultation with Bocconi University captured it succinctly: “You can see nature everywhere, except in macro-financial analysis and financial statements.” While leaders increasingly describe nature as critical, dominant financial and macroeconomic models often report limited impacts under severe ecological stress.
This gap weakens policy relevance of mainstream analysis, because if the numbers look “non-critical,” the pressure to act softens, and policy ends up drifting.
Addressing this gap requires rethinking the economic frameworks used to assess risk and guide decision-making, from macroeconomic modelling to corporate reporting practices.
The consultation introduced some innovations in ecological macroeconomics and sustainability-oriented accounting that seek to better integrate nature into economic analysis and business reporting. These approaches expand the decision-making toolkit and allow for more informed policy and investment decisions.
Another proposal suggested moving beyond viewing nature solely as a form of capital and instead treating it as a stakeholder. In value-added statements, firms show how generated value is distributed among labor, government, and capital providers. Nature is typically absent. Including nature in that distribution logic could make restoration and positive environmental contributions more visible in corporate and public accounts.
The consultation highlighted how institutions across the international landscape are rethinking the place of nature within economic systems and public policy.
The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES, 2026), for example, has advanced methodological assessments that examine how businesses depend on biodiversity and on nature’s contributions to people, making clearer the economic risks of ecosystem degradation. Similarly, a recent UK national security assessment (Defra, 2026) reframes biodiversity loss not only as an environmental challenge but as a matter of national and global security. Ecosystems collapsing in distant regions can trigger cascading disruptions, from food and water stress to supply chain breakdowns, economic volatility, and geopolitical instability.
The implications of these shifts in economic thinking are also reflected in debates around the green transition. While the transition towards low-carbon economies presents major opportunities for innovation and employment, outcomes will depend on how potential economic and social disruptions are managed. Beyond counting jobs created in renewable energy, policy attention must be focused on job quality, skills mismatches, and local realities.
Communities built around fossil fuel industries face complex transitions that require place-based strategies and careful attention to distributional effects. The long-term sustainability of climate action will depend on how well these transitions are managed on the ground.
Political dynamics, economic transitions on the ground, and people’s perceptions of these transitions therefore play a critical role in shaping transformations. Surveys often show strong support for climate action, yet many people underestimate others’ willingness to act (The Guardian, 2025). This gap between what people privately support and what they think others support can stall collective progress. In polarized environments, misinformation spreads quickly and trust erodes. Economic reforms tied to nature can then be framed as elite projects or external impositions, rather than shared investments in common well-being.
From a human development perspective, these debates highlight the way societies, economies, and businesses understand and account for nature can shape people’s wellbeing, opportunities, and security. Nature loss threatens the foundations of human development quietly at first, then suddenly. Clean air affects health. Stable climates protect homes and livelihoods. Biodiversity supports food systems and incomes. Economic security depends on functioning ecosystems. And social cohesion depends on people believing that change is fair and shared.
The consultation with IEP Bocconi showed that nature, economics, and perceptions are not separate debates. Integrating nature into economic decision-making is not only an urgent reform, it is the first step to safeguarding the conditions that allow people to live long, healthy, and secure better lives in the decades ahead.
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
