Nature positive: corporate assessment guide for financial institutions

In just the last 50 years, global wildlife populations have plummeted by an alarming 73%, driven largely by human activities. Today, 75% of the Earth’s land has been significantly altered by human hands, putting not only the environment at risk but also the global economy itself.
With more than half of the world’s GDP depending on natural ecosystems, the loss of biodiversity is no longer just an environmental issue it’s a critical economic risk.

Recognizing this, in 2022, 196 countries came together to adopt the Kunming Montreal Global Biodiversity Framework (GBF). The GBF sets ambitious targets for protecting and restoring biodiversity, similar to what the Paris Agreement aims to achieve for climate change.

Why Investing in Nature Matters

Addressing the biodiversity crisis requires more than conservation efforts alone; it demands substantial investment in businesses and projects that protect and restore nature.
Here, financial institutions including banks, investors, and insurers have a pivotal role. They control vast financial flows and can shift capital towards “nature-positive” activities.

To make this shift effective, financial institutions must:

• Assess nature-related risks across their investment portfolios.
• Support companies in developing and implementing credible nature transition plans.

Several emerging frameworks are providing guidance, such as the Taskforce on Nature-related Financial Disclosures (TNFD), the Glasgow Financial Alliance for Net Zero (GFANZ), and initiatives led by organizations like WWF.

How Can Financial Institutions Align with Nature Goals?

According to a World Economic Forum report, financial institutions can track and support their clients alignment with nature-related goals using 11 key indicators across three main areas:

1. Understanding Nature-Related Risks and Dependencies
   • Companies must be aware of how their activities impact and depend on nature.
   • Identifying nature-related risks early is essential for managing financial exposure.
2. Setting Clear Ambitions and Targets
   • Clients should define and commit to specific, measurable nature-related goals.
   • These targets should align with broader biodiversity frameworks like the GBF.
3. Demonstrating Credibility and Achievability
   • Companies must integrate nature strategies into their core operations and decision-making processes.
   • Institutions should look for evidence of action, not just pledges.

Building on Climate Frameworks

Financial institutions don’t need to start from scratch. They are encouraged to build upon existing climate-related frameworks such as those used for managing carbon emissions and adapt them to include nature considerations.
This integrated approach ensures that nature and climate strategies move forward together, strengthening the resilience of both natural ecosystems and the global economy.

Nature’s decline is urgent, but it is also an opportunity.
By embedding nature into financial decision-making today, banks, investors, and insurers can lead the transition toward a sustainable, resilient future protecting not just the planet, but the very foundation of economic prosperity.

source:
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