How can finance address the loss of nature and biodiversity?
Michelle Horsfield, a former environmental scientist and executive
director of ESG advisory for the SMBC Group, and Keith Bottomley, deputy
policy chair for the City of London corporation, explain the key actions
you can take to incorporate biodiversity into your decision-making and
investment strategies.
6 key takeaways from this video
- Nature loss and the loss of biodiversity is a serious threat and, as
with climate change, the finance sector must get up to speed on it.
- To address biodiversity loss, annual investments in nature-based
solutions must almost
triple by 2030.
- One way to increase such investment is through biodiversity funds,
which provide a mechanism to raise capital for biodiversity recovery
and mitigation programmes while offering investors a return.
- Biodiversity fund assets topped US$1bn in 2023, and this is expected to continue growing as finance is channelled
toward more nature and biodiversity-positive activity.
- To start integrating biodiversity into your investment strategies,
build it into your risk management processes and assess your
portfolios for biodiversity risks. Tools such as
ENCORE
can help you do this.
- You will also need to start the conversation with stakeholders
– ask what firms can share with you about how they think about
nature. This is a journey that investors and companies will need to
walk together.
3 practical actions you can take today
While governments are undertaking to set policies on the issue of
nature and biodiversity loss, there are three key actions financial
professionals can take now:
- Build capacity internally on biodiversity
Raise
awareness and learn about what was agreed at the Global Biodiversity
Forum. Identify whether your firm should track biodiversity loss or
whether nature loss is more relevant to your organisation. Then,
find out how to measure these aspects and share insights and
learnings with your peers.
- Identify opportunities and risks
Pinpoint the
nature-related risks and opportunities within your organisations and
portfolio.
- Disclose
Publish where the nature-related
dependencies, impacts and risks are in your portfolios, in line with
the
Taskforce on Nature-related Financial Disclosures’
recommendations.