How Your Company Can Help Eliminate Harmful Subsidies
Nature
Private-sector support is needed to accelerate the sluggish pace of government reforms. Read More
By Lucy Almond
October 15, 2026
Monoculture agriculture can have harmful environmental impacts. Source: Shutterstock.
Key Takeaways:
- Governments spend $2.6 trillion annually on subsidies that often make unsustainable business practices cheaper than sustainable alternatives.
- The upcoming UN Biodiversity Conference offers an opportunity to accelerate attempts to reform these incentives.
- Sustainability teams can help by identifying harmful incentives, linking better policies to investment decisions, and engaging policymakers.
Earlier This Month
More than 130 businesses and financial institutions, including Danone, H&M Group, Unilever, and Rabobank, called on governments to reform the incentives that too often make environmentally damaging business practices cheaper than sustainable alternatives.
The Challenge
For years, businesses have been encouraged to understand their environmental impacts, improve supply chains, and invest in sustainable production. However, they face a fundamental challenge: in many markets, subsidies, tax breaks, trade rules, and other policies reward the very practices they are trying to avoid.
Scale of the Issue
Governments provide an estimated $2.6 trillion annually in environmentally harmful subsidies.
Changing the Dynamic
Changing this dynamic requires government leadership, but businesses can help. In 2022, governments committed to a 23-point plan to halt and reverse nature loss by 2030. Target 18 of the Kunming-Montreal Global Biodiversity Framework requires countries to eliminate and reform harmful subsidies by 2025, but many countries are yet to fully assess their own policies.
Accelerating the Work
As we approach the opening of the UN Biodiversity Conference (COP17) on October 19, here are three ways companies can work with governments to accelerate that work:
- Map exposure to existing incentives: Start by examining your value chain and how government subsidies and incentives influence priority commodities, sourcing regions, and production decisions.
- Assess agricultural support: For a food company, this might involve evaluating agricultural support that favors intensive production.
- Focus on fiber costs: For an apparel business, the focus could be incentives that impact the costs of conventional and more sustainable fibers.
Existing nature assessments and supply chain mapping provide a good starting point.