Teaser – Upcoming guide on data and approaches
Members of the Impact Assessment working group under the Finance for Biodiversity Foundation are developing a guide on biodiversity integration by financial institutions. The upcoming guide will be based on the practical experience and knowledge that is brought together in the working group as well as on the earlier outcomes of the public consultation on biodiversity issues and approaches. This news article is a teaser to show the type of information that the guide, which is expected to be published in July, will bring to financial institutions.
What biodiversity challenges are financial institutions facing today?
Financial institutions are increasingly aware that alongside climate change, the loss of biodiversity is creating risks to businesses and increasing systemic risk for the financial system. The figure below summarizes the key interrelated elements financial institutions need to address when acting on biodiversity.
How may financial institutions address these challenges?
There are several frameworks, standards, commitments and recommendations around on how the finance sector should integrate biodiversity considerations into their operations in order to manage the risks related to biodiversity loss, including:
- Recommendations in the Interim Report ‘Biodiversity and financial stability: building the case for action’ by the Central Banks and Supervisors Network for Greening the Financial System (NGFS)
- Commitments in the Finance for Biodiversity Pledge
- Nature-Related Risk & Opportunity Management and Disclosure Framework Beta v0.1, by TNFD
- Interim draft of the European Sustainability Reporting Standards, by EFRAG
- French disclosure requirements in Article 29, by the French government
Together, these standards and frameworks not only incentivize biodiversity integration by financial institutions, but also influence financial institutions’ approach to biodiversity. Closer analysis shows that they seem to be converging on five steps that could serve as a basis for the development of a biodiversity approach by financial institutions. This five-step process, the V-process, is presented in the table below, showing for each step how financial institutions could proceed to effectively integrate biodiversity into their activities based on the tools and databases available. Considering that 2030 is right around the corner and that the global biodiversity financing gap is huge (US$711 million/year), financial institutions should start introducing biodiversity into their activities right away. The V-process provides a possible plan of action, which should however always be developed and applied while considering the interlinkages between biodiversity, climate, and social issues.
The full guide is expected to be published in June. It targets all financial institutions willing to integrate biodiversity into their activities, independent of their level of maturity on the topic. The upcoming publication will provide guidance on biodiversity integration by financial institutions and will highlight the data, tools and approaches currently available. In this way, we hope to help financial institutions to find their way in this complex topic and to speed up the reversal of nature loss.
Other publications by the FfB Foundation
The following publications by the Finance for Biodiversity Foundation also offer guidance to financial institutions on issues related to biodiversity.
- Guide on engagement with companies
- Guide on biodiversity measurement approaches
- Financial sector guide for the Convention on Biological Diversity
For a complete overview of our publications, see the publications page.