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Sustainable Finance: biodiversity, banks and investors

30 November, 2020Juno Baker

Biodiversity is a critical risk factor that underpins many of the United Nations Sustainable Development Goals (SDGs). But how does it fit into sustainable finance for both banks and investors? What do private sector corporations need to consider? The latest white paper from our Centre for Sustainable Finance, produced in partnership with the IBAT Alliance, looks at these issues.

Download Biodiversity risk in the finance sector (pdf)

Rainforest streamBiodiversity loss holds an existential risk for the world. It’s also a clear focus of the United Nations Sustainable Development Goals (SDGs) 14 and 15 – Life below Water and Life on Land.

Biodiversity conservation has risen rapidly up the environmental and political agenda. And the biodiversity risk for the financial services sector will continue to grow.

Whilst not conclusive, some evidence suggests that the loss of habitat and illegal wildlife trade could lead to an increase in animal-borne diseases, such as Covid-19.

This will of course jeopardise human health and raises some important questions about biodiversity loss and the future resilience of interconnected supply chains in the global economy.

There’s a growing emphasis on the role that the private sector could play in reducing nature loss. Some organisations are calling for a ‘Paris Climate Agreement equivalent’ – a new globally binding biodiversity agreement to halt the decline of biodiversity.

Biodiversity risk in the finance sector

Integrating biodiversity concerns into lending and investment decisions requires effort. But the actions required to implement transformative change are economically feasible and strongly tied to broader sustainability goals and the SDGs. Reassuringly, there is still an opportunity to see positive biodiversity trends by 2050.

This white paper looks at:

  • the expectations on the private sector – including financial services – to protect biodiversity
  • how financial institutions might be affected by biodiversity risk
  • the opportunities from understanding biodiversity risk
  • screening for biodiversity risk, including key indicators of high biodiversity value
  • considerations for transactions involving higher risk biodiversity locations, including biodiversity due diligence questions that can be used at the very start of project planning
  • the cost-effectiveness of biodiversity conservation, and
  • transformational change.

Download Biodiversity risk in the finance sector (pdf)

The IBAT Alliance is formed of four partners:

  • BirdLife International (www.birdlife.org)
  • International Union for Conservation of Nature (IUCN) (www.iucn.org)
  • United Nations Environment Programme – World ConservationMonitoring Centre (www.unep-wcmc.org)
  • Conservation International (www.conservation.org)

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Find out about our Centre for Sustainable Finance