Natural social and financial capitals

Overview

This study looks at how financial development can be linked to biodiversity loss, and what that means for long-term economic sustainability. Using evidence from Italy, the research builds on the idea that strong social capital—such as trust, civic engagement, and effective institutions—helps financial markets develop and allocate capital more efficiently. However, the findings show that this same process can also place greater pressure on natural ecosystems, particularly in earlier stages of economic growth.

The results support the Environmental Kuznets Curve hypothesis: as economies grow, biodiversity degradation tends to increase at first, but after a certain level of development, the trend slows and can begin to reverse. This pattern is observed consistently across several recognised biodiversity indicators.