This event was held to launch the publication of the new POSTnote on ‘Financial Risks of Nature Loss’. This POSTnote reviews current understanding of nature-related d financial risks and impacts, summarises the opportunities and limits of biodiversity disclosure frameworks and outlines additional mechanisms to align finance with national and global targets for nature recovery. This is a relatively young topic area, and discussion focused on introducing how finance both impacts nature and is exposed to material financial risks from nature loss. The discussion also reviewed approaches by industry and governments to improve understanding, disclosure and mitigation of nature-related risks as well as addressing the financial drivers of nature loss itself.

This event, sponsored by the British Ecological Society, was chaired by Baroness Parminter, and the speakers were:

  • Dr Nina Seega, University of Cambridge
  • Professor Jill Atkins, Sheffield University
  • Sarah Draper, Global Canopy
  • Professor Aled Jones, Anglia Ruskin University
  • Dr Simon Dikau, London School of Economics and Political Science
  • Katie Kedward, University College London
  • Oscar Warwick Thompson, UK Sustainable Investment and Finance Association (UKSIF)
  • Emily McKenzie, Taskforce on Nature-related Financial Disclosures (TNFD)

Chair’s Welcome: Baroness Parminter

Baroness Parminter welcomed the attendees and speakers, she highlighted the ecological crisis we are facing today and welcomed today’s discussion on how to embed nature into financial systems.

Dr Nina Seega

The financial risks of nature loss

Half of the world’s GDP is fundamentally dependent on nature. Yet, some of this economic activity is driving nature loss. This results in physical sources of financial risk for businesses and financial institutions. Our efforts to combat nature also crystalises transition and liability risks. At the Cambridge Institute for Sustainability Leadership (CISL), we work with over 50 large financial institutions and one of our projects has been on understanding nature loss as a source of financial risk.

We have produced a ‘Handbook for Nature-related Financial Risks’, which enables financial institutions to identify their nature-related financial risks. We distinguish three types of nature-related risks: physical, transition and liability. Physical risks covers ecosystem services which are threatened due to, for example, climate change, invasive species, land use change, over-exploitation of natural resources and pollution. These risks can lead to the decline of provisioning services, such as provision of commodities like food and timber, or hazard regulation. Transition risks arise from policy and regulation. The EU’s Farm to Fork is one example of a policy coming into effect. David Attenborough’s documentary on plastic is another example of a consumer shift that drove supermarkets to stop giving out free plastic bags.

These nature-related risks can affect companies via six transmission channels: Destruction of activities in the value chain, raw material price volatility, adjustment or relocation of activities, stranded assets, and capital destruction. Through these transmission channels nature-related risks create financial risks of credit, market, liquidity and business risks. For example, a change in land use may drive down pollination services, which then may affect our food security. In turn that drives a change to pricing of, for example, wheat crops, that brings in soft commodities price fluctuation and brings market risks to financial institutions.

In collaboration with financial institutions, we’ve begun to work on use-cases to explore how this framework helps bring financial materiality into their portfolios. From this we’ve learned that data and tools are available to understand the financial impacts of nature loss. Some responses to nature loss can be modelled, and although these remain quite rudimentary, have seen huge amounts of engagement within banks and investment managers. The main barrier to understanding the scale of risks was found to be lack of supply chain transparency. Investment managers and banks need to understand how these risks are going to be hitting their portfolios, and then from that we can work towards a more nature positive economy.

Further information on these data and tools are available at:

Professor Jill Atkins

Nature loss and its financial materiality

Climate change is now accepted as a critically important issue globally for businesses, policymakers and society. But it is now becoming increasingly clear that biodiversity collapse is at least as important to the future of the planet, the future of business, and ultimately the survival of the human race. Nature loss represents a material financial risk for companies, and consequently for investors. The fact that one million species are threatened with extinction is not an issue of concern solely for conservationists, ecologists and nature lovers, but also for global business, for the finance industry, accountants and for government policy.

Communication of biodiversity and financial risk can be challenging. An easy anchor for communicating nature-related financial risks is the example of declines in bees. Bees are pollinators, and their healthy survival is crucial to the production of a variety of food. Both commercial bees kept in hives and wild bees are essential to the food industry, but bee populations have been declining globally for some time. It has recently been acknowledged that companies in the food industry and agrochemical industry in particular need to integrate the protection of bees into their corporate strategy. Institutional investors are now starting to directly engage with companies on this issue. Initiatives aimed at protecting bees through supply chains in the food industry include reducing pesticide use and improving natural biodiversity across farms. Humans rely on a huge number of ecosystem services that are freely provided by nature: from pollination services to provision of fish and seafood, to medicines. Loss of some species can trigger the collapse of entire ecosystems and the services which businesses may depend. Nature loss in an increasing concern for accountants, with companies increasingly expected to report under the concept of ‘double-materiality’. This means they have to disclose information on their risks stemming from nature loss, such as pollinator decline if it presents a material financial risk to the business, but also their negative impacts on nature.

In a new book on extinction governance, financial organisations explore the latest initiatives to protect nature being developed across the globe. There’s been a clear shift in attitudes and increasing interest from financial institutions and investors on nature loss, partly due to COVID-19 heightening awareness of the interconnectedness of nature, pandemic risk and business continuity. UK ShareAction report shows that global asset managers are starting to integrate biodiversity protection into their investment decision-making. Companies are also increasing reporting on biodiversity risk and impacts. The latest KPMG survey of sustainability highlighted biodiversity as a growth area for accounting.

Various frameworks have been produced to assist companies reporting on biodiversity, including the Biological Diversity Protocol. Extinction accounting has explored the extent to which corporate reporting on biodiversity is effective in discharging corporate accountability for nature or is it a form of ‘window-dressing’. Unfortunately, most research concludes it is the latter, characterised largely by impression management. There are exceptions, with recent research finding companies are now reporting on transformative initiatives that reduced financial risks attached to biodiversity loss. However, the voluntary nature of accounting for biodiversity represents a significant challenge. For further progress to be made, policymakers and regulators need to push for mandatory reporting on nature risks as well as tighter regulation across business and finance sectors regarding their impacts on nature.

Further information on this is available at: Extinction Governance, Finance and Accounting: Implementing a Species Protection Action Plan for the Financial Markets.

Sarah Draper

The transparency and accountability of the financial sector’s influence on deforestation

Global Canopy is an environmental organisation focused on tackling the market drivers causing global nature loss. We do this by creating data that brings transparency to the commodity and financial markets linked to nature destruction via several projects and initiatives. Global forests are critical for climate change mitigation, for biodiversity, as well as crucial for the livelihoods of millions of people that depend on them. Yet they are still being cleared at an alarming rate and the problem seems to be getting worse. What is the role of the finance sector in this? Financial institutions face risks from deforestation and from not addressing these risks. However, there are also opportunities for investment in companies that perform well on nature and deforestation. The finance sector has a role to drive companies to act on deforestation. We’ve seen growing awareness and commitments from financial institutions on climate and biodiversity, but they can’t be leaders on these issues without tackling deforestation.

In our Forest 500 project, we identify the 350 companies that are the most influential in forest risk commodity supply chains and then the top 150 financial institutions who finance these companies. In 2020, these 150 financial institutions provided $5.5 trillion of financing via loans, bonds and shareholdings to those 350 companies. Through our Trase finance initiative, we’ve also exposed the financing of traders of major forest risk commodities, such as beef, soy and palm oil. Just looking at UK banks and investors, we could link at least £198 billion of financing to these risky companies. This is an underestimate as it doesn’t include all companies in the supply chain, such as manufacturers and retailers, and doesn’t include all commodities linked to deforestation.

We’ve seen a notable lack of action from the financial sector. For those 150 financial institutions assessed in the Forest 500, we assess the strength of their implementation of policies to tackle deforestation and related human rights abuses. In 2021, 93 of the 150 had no policies covering any of the commodities under review. This represents $2.6 trillion of finance going to companies exposed to deforestation with no requirement for those companies to act on these issues. Even when policies are in place, there is little evidence that they are being well-implemented.

There is data and guidance available for financial institutions to act on their exposure to deforestation, and there are leading financial institutions already doing this. We’ve worked with the Norwegian asset manager Storebrand with both our Forest 500 and Trase datasets which they’ve used to identify key companies in their portfolios to engage with as well as monitor the progress made by those companies. Data is always improving, and we’re working to bring these different datasets into one place to make it easier for financial institutions to understand how companies are performing. We’ve also launched a roadmap to guide financial institutions through the steps and phases they need to follow to achieve deforestation free portfolios by 2025 – a target many financial institutions signed up to at COP26. This roadmap guides institutions through six phases with a suggested timeline to meet this 2025 deadline, from mapping risk to setting strong policy monitoring, engaging to drive change to disclosure and ultimately eliminating deforestation.


As biodiversity is much harder to measure compared to climate change, how robust are these datasets and how difficult will it be to bring into one place to improve ease of use

Focusing on one area, such as deforestation, makes it simpler in many ways. At this stage, there is enough data for companies to start assessing their exposure. The data isn’t perfect yet, and we’re working with many partners to continue to improve data and fill gaps. Financial institutions themselves have a role in driving more data availability as they can ask companies to disclose more and better data.

What is the role of the public in terms of being one of the drivers to get financial institutions to act in this area?

One idea which has been coming up is to motivate pension fund members. Everyone is in a pension scheme and so can pressure pension funds to change their attitudes on climate and nature issues. We’ve already seen change with pension fund attitudes to Environmental, Social and Governance (ESG) issues over the last 20 years.

The same is true of bank accounts and mortgages. So, there are direct routes where customers and consumers have a way in. Risk is a good ‘route’ for nature into the financial system, because if you can show there is a material financial risk which they are not measuring, managing, or mitigating, then it becomes relevant to their risk functions and their chief risk officers and then it starts percolating through the system.

With rising commodity prices, are financial institutions incentivised to manage risks and go further and exclude commodities from their supply chains which are having too much of a negative impact on nature?

Let’s say you identify a risk from sourcing your products from a particularly rich biodiversity area. Do you pull out or do you start working with local communities to address impact on the ground? That’s where you ned to have robust conversations between finance and corporate sectors in how you address those questions. So, I think we are coming closer to seeing the financial materiality of nature loss and seeing huge amounts of engagement starting to appear.

Professor Aled Jones

Challenges and potential pitfalls in managing nature-related risks

Where nature loss is not priced there is then a fundamental mismatch between macroeconomic policy, business decisions and the preservation of natural capital. Something needs to be done to include nature loss into decision-making. Managing nature-related risks is important, but it isn’t currently being carried out by most businesses. The challenges of understanding and tackling nature related risks are huge. Particularly uncertain are how the pathways to impact will demonstrate material financial loss. These pathways have been quite difficult to understand because of potential tipping points in various biodiversity systems. There are also a lot of indirect impacts which are likely to be much larger than their direct impacts. There’s also uncertainty around what the outcomes might be from the loss of a particular species or landscape on a particular individual organisation’s material risk. In this way, biodiversity loss is much more complicated than climate change.

This is why we’re looking at the management process around nature-related risk and we need to be thinking carefully about how we’re implementing this within a decision-making process or within regulations. One of the organisations I’ve been working with is the Institute and Faculty of Actuaries (IFoA) – the financial risk professionals. They’re trying to understand these systemic risks better, both physical and transition risks. The more immediate short-term risks that organisations face is likely to be from transition risks. As we see policy and regulations shift to account for nature loss, then we need to understand what this means for risk management across business. An IFoA biodiversity working group has been developing tools and improving understanding across the profession on biodiversity and how biodiversity loss becomes financially material in future scenarios.

It is important to highlight that to manage risk, it’s not just about getting better tools that can quantify nature. The quantification of nature should only ever be used as a metaphor because of the uncertainty around biodiversity. It is a business-critical risk, but whenever we put a financial value or quantification on nature, it can never capture all the risks associated with biodiversity loss. In this way biodiversity is different from climate change, where it is possible to value the risk more concretely. So, we’ve seen lots of reports coming out from governments and organisations which demonstrate the absurdity of some of the quantification of nature. For example, the EU have stressed that one in six jobs are dependent on nature. It’s unclear what the other five in six jobs are dependent on and would those jobs still be there if there’s no nature? It’s important to know the limitations of quantification. Such as for tipping points of ecosystems, where the biodiversity loss can be catastrophic. The IFoA are beginning to champion the importance of using a blend of qualitative and quantitative data, particularly for biodiversity loss, to better manage natural capital.

Further information on this is available at:

Dr Simon Dikau

Central banking and supervision in the biosphere: Biodiversity loss, financial risk, and system stability

Over the last year, a Joint NGFS-INSPIRE Study Group on Biodiversity and Financial Stability explored the implications of biodiversity loss for financial stability and therefore for central banks and supervisors. The Study Group included researchers from universities and  members from the Network for Greening the Financial System (NGFS), a network of 108 central banks and financial supervisors. The starting question for this study group was: why should this broader environmental and biodiversity agenda be important for central banks and supervisors?

The simple answer is that biodiversity or nature loss have economic and therefore financial stability implications. Generally, it is well accepted by central banks and financial supervisors that environmental financial risks have implications for financial stability. However, climate-related financial risks have been the starting point for many central banks and supervisors, and some initiatives have even exclusively focused on the climate dimension of environmental risks. Because central banks and financial supervisors have price and financial stability mandates (and some are also tasked with supporting the economic priorities of their government), the implications of biodiversity and nature loss for macroeconomic stability fall squarely within their remits and mandates. Furthermore, biodiversity-related financial risks are closely interconnected with climate, making it hard to justify only looking at climate change without considering the dynamic interaction with biodiversity as well.

For central banks and financial supervisors, the starting point for addressing biodiversity and nature-related financial risks lies in the deepening of the understanding of the implications for the economy and the identification of the transmission channels to financial stability. In this context, it can be relevant to consider the ‘double-materiality’ relationship between economic activities and nature. First, there is an impact of biodiversity loss on firms’ balance sheets (or the economy) and on the funding financial institutions. Second, there is also an impact of firms’ activities on the environment and therefore of financial institutions that are funding these activities

Some central banks and supervisors around the world are already starting to address biodiversity and related financial risks. For example, the European Central Bank published a guide on environmental risks that explicitly includes climate and nature. The Banque du France included biodiversity in its responsible investment policy for its portfolio management. The Central Bank of Malaysia has explicitly linked climate and biodiversity in its recently published climate change taxonomy.

What steps can central banks and financial supervisor take now? There are five high level areas with policy implications and options for central banks and supervisors. First, depending on mandates and jurisdictions, central banks can play a role in contributing to the financial architecture through the development of taxonomies, disclosure standards or relevant metrics. Second, policy liaison and coordination both on the international and national level is important to address the complex biodiversity loss-related impacts and dependencies. Third, there are implications for macroeconomic analysis and monetary policy where, for example, the biodiversity-climate nexus could be integrated into modelling approaches and hence into monetary operations. Fourth, prudential micro- and macroprudential frameworks and instruments would have to take the relevant biodiversity-related financial risks into account. Finally, there is a role for financial market conduct to address greenwashing and financial crime.

More information on this is available at:

Katie Kedward

Tackling the trade-off between knowledge-building and policy intervention: the case for a precautionary approach to managing nature-related financial risks

It is important to remember that reversing nature loss is not going to be possible without a massive reallocation of financial flows away from harmful activities, and not just focusing on getting them towards green activities. The emerging narrative is that by getting firms to assess and disclose the risks that biodiversity loss poses to their own private balance sheets through Environmental, Social and Governance (ESG) metrics or disclosure frameworks, and that these actions themselves will raise awareness and accelerate this massive reorientation of capital flows. But our research at the Institute for Innovation and Public Purpose at University College London has pointed out some shortcomings with this assumption.

The first shortcoming is that biodiversity-related financial risks are very challenging to quantify, more so than for climate change. Biodiversity needs to be captured by multiple indicators using location specific information. Nature also isn’t a fungible concept like carbon emissions. Biodiversity gains in one location will never fully offset losses in another location, so that complicates the design of something like a carbon price equivalent for nature. Additionally, even if reasonably good data for financial portfolios can be sourced, there’s the fact that risks models are inherently limited in their capacity to deal with ‘radical uncertainty’ – where it’s impossible to meaningfully assess the probability of future unprecedented threats. So overall, policymakers need to be aware that whilst initiatives like disclosure and risk modelling are useful in building a general picture of risks and raising awareness, they cannot be relied upon to capture all the relevant risks.

The second shortcoming is related to time. It may take years for risk reporting and modelling frameworks to become sufficiently established, during which time some of the biodiversity related threats will be starting to undermine economic and financial stability. Policymakers will need to address a trade-off between knowledge building and taking policy actions to manage these risks. The fact that nature-related risks are highly uncertain, and complex should not be used as a justification for delaying action to manage them. For example, the Taskforce for Climate-Related Financial Disclosures (TCFD) framework was launched five years ago, but climate disclosures are yet to materially affect the investment decisions of most financial institutions.

We argue there are more direct policy tools available, based on the information that’s available today, which can address the sources of nature-related risks. There’s a strong case for policymakers to take a precautionary approach to protecting the financial system, given that the consequences of inaction will likely be catastrophic. This precautionary approach should focus on ensuring the financial system is aligned with government priorities on a nature positive transition. All decision-makers within government, business and financial institutions need to think about how to understand and manage nature-related risks under conditions of uncertainty. For risk assessment that might be focusing on key risk transmission channels, such as deforestation. What’s missing from the current approach to managing risks is a public taxonomy which clearly defines biodiversity harmful activities and can be used to legitimise financial regulatory interventions.

More information on this is available at:


Who regulates the financial institutions to make sure that we don’t create a system whereby if people are gaming it and we end up with a lot of greenwashing?

Nature is probably 10 years behind climate change in developing the regulations and frameworks that are needed. So there needs to be a lot of focus on those regulations. Because biodiversity is more complex than climate, regulations will need to be more flexible and adaptable, which will take more time to get right. Regulations will also need to be international.

The presence of a public taxonomy helps avoid greenwashing because the onus is then on financial institutions and firms to prove that their activities are in line with what’s been defined as either green or not green, rather than them setting their own definitions, which has led to variable standards as to what is green and greenwashing.

How do you start to get international agreement on taxonomies?

In terms of making taxonomies robust, it needs to be a public process and follow democratic principles of allowing lots of different stakeholders to buy into that process. It’s important to make sure it’s protected from being captured by vested interests, which has been one of the controversies of the EU taxonomy.

What is interesting is that in a lot of emerging and developing markets, central banks are take a leading role in developing these taxonomies. The Indonesian approach includes the negative, harmful activities in addition to the ‘green’ activities. This is particularly interesting from a central banking and financial stability perspective because for the market it’s good to know what is green and what you want to scale up. But it is also interesting where taxonomies identify the sectors and industries that you don’t want to invest in because they are very risky.

Oscar Warwick Thompson

Industry steps to tackle nature-related risks and suggested policy recommendations

The UK Sustainable Investment and Finance Association (UKSIF) is a membership organisation representing the UK sustainable finance sector with 290 members representing over £10 trillion of assets under management. Our members include asset managers, banks, pension funds, data providers, NGOs among others, all looking to promote the growth of more sustainable, responsible financial services sector.

The destruction of biodiversity and ecosystem services is increasingly becoming a driver of long-term value in the economy and with investing companies. The World Economic Forum has estimated that more than half of global GDP is reliant on biodiversity. So clearly this is something we want to all be paying much more attention to. Initiatives coming from industry which are looking at this include the Taskforce on Nature-related Financial Disclosures (TNFD). The view of UKSIF members is we think this is an effective starting point, providing a much clearer nature-related risk framework that can hopefully encourage better disclosure both from corporates and investors and help redirect financial flows towards much more nature positive outcomes. It will also hopefully support the development of more reliable nature data, which could really help drive changes.

Other industry initiatives include several biodiversity and natural capital funds that are increasingly being launched by our members. This includes HSBC Global Asset Management, who have a series of natural capital funds in partnership with Pollination Group, that are looking to channel billions of pounds into long-term preservation and protection of nature with the aim to mainstream natural capital as an asset class.

Our recommendations for what we’d like to government to push forward have been outlined in our letter to the Chancellor in September last year. We call on the government to take on a much more prominent global role in supporting the work of the TNFD and to encourage a broader range of countries to engage as well and extend endorsement from G7 to G20 and developing nations as well. We call on the government to take steps towards an ambitious agreement at COP15 in China later this year, where it’s expected a new global biodiversity framework will be agreed. We want to UK to support a clause to make financial flows consistent with the nature positive future and the goal of reversing biodiversity loss by 2030. We’re also very keen for the government to take forward the work of the Dasgupta Review, through establishing a formal process for considering the implementation of some of the Review’s conclusions into government policymaking. We’d like to see nature embedded across government policy decision-making. For instance, the UK Infrastructure Bank has a net zero, levelling up mandate, but why can’t nature also be part of this mandate? Finally, we’d like to see further thought from government regulators on how reporting frameworks, like the TNFD, could be incorporated in the UK.

Emily McKenzie

The TNFD framework for managing and disclosing nature-related risks

The Taskforce for Nature-related Financial Disclosure (TNFD) is a global initiative with a mission to develop and deliver a risk management and disclosure framework so that organisations can report and act on evolving nature related risks and its ultimate aim is to support a shift in global financial flows away from outcomes that are harmful to nature towards those that help it thrive. It is market-led, government supported and science-based initiative which has been endorsed by G7 finance ministers. The Taskforce is composed of 34 members from across financial institutions, corporates, and market service providers, and includes a forum of more than 300 institutions who are aligned with the TNFD mission.

The TNFD framework is broader than just disclosure, it’s about risk management, opportunity management and improving decision-making. We’ve been very concerted of being consistent in its approach, so we’ve built on the earlier Taskforce for Climate-related Financial Disclosure (TCFD) and we are aligning with the global baseline that’s emerging for the sustainability standards with the International Sustainability Standards Board (ISSB). There’s a strong emphasis on the importance of location, which is so important for nature impacts, dependencies, risks and opportunities. It’s not only a set of disclosure recommendations like the TCFD; it also provides guidance and internal assessment process which we’ve included based on market feedback on the need to build understanding and capabilities in this space.

The beta TNFD framework was released on the 15th of March. It has three core components. This first is a set of fundamental concepts and definitions around nature to enable market participants to understand what nature is, how they depend on nature, impact nature and what the risks and opportunities are emerging. The second component is a set of draft disclosure recommendations. These are aligned with those put together by the TCFD but extended to consider other specific for nature. The third component is an analytical process we’ve called LEAP, which is for internal analysis, a set of phases and core components for thinking about and assessing nature-related risk and opportunities. We’ve produced both a summary report of the framework, but also an interactive online platform which enables users to see the framework in their own self-paced way. It also enables you to give immediate feedback through the platform on what we could improve, add how easy or difficult you found it. It also links out to wider resources which could be used.

The framework is being developed with an open innovation approach and is currently in a prototype phase. We plan to add many different frameworks like scenarios, metrics sector and specific guidance in subsequent releases. We’ll be adding and extending the framework and revising it based on feedback and consultation over the next 18 months. We really look forward to feedback from users both in the private and public sector.

More information on this is available at:


Is there anything that governments can do to improve the accessibility of data that they’re holding in a way which would be helpful for the TNFD?

One of the issues we found is data coverage differs across nature categories – there’s more data for terrestrial biomes than for oceans or freshwater. Governments could be doing a lot here. One thing which came out of the work of the Dasgupta Review is there should be much more emphasis on natural capital accounts in the statistics offices and from the Treasury. But the private sector can also be feeding their data into those same systems. It seems there is a clear role for national governments to be investing more in this data collection and the technology behind it. If they don’t the private sector will drive it forwards themselves. So, I think it’s in the interest of governments to be doing more to create more substance here.

What regulators could also do is look at the role played by ESG data and ratings. These regulators are providing a lot of this data to their investor clients. The Financial Conduct Authority (FCA) is looking at bring them in to the existing regulatory perimeter. This is a step that we would support the FCA taking, or at the very least there can be best practise standards that can be applied to data providers to make sure we have more transparency over methodology being used to measure this data. The CDP have coordinated a letter from investors representing over $130 trillion of assets under management, calling for a database for companies to disclose far more meaningful data on climate, but also deforestation and climate as well. So. the demand is there, but we need more targeted rules and regulations that are looking at data providers, that’s a key missing piece in the UK at present

What is going to or could happen over the next 6-12 months that will help get this agenda embedded into both governments and financial institutions?

The Bank of England currently does some great work on climate change and has set out its supervisory expectations on financial institutions to disclose on climate change. A great next step for the Bank of England would be to integrate biodiversity considerations into existing work on climate change. For instance, looking at how the biennial exploratory scenario, a kind of a stress test exercise for the financial system, should incorporate biodiversity. They could also publish their own expectations for what financial institutions need to start doing today. This is an urgently needed first step to build momentum on this important topic.

A big issue for central banks and supervisors is understanding the climate change and biodiversity nexus and understanding the exposure is of the financial system. Very few central banks have started on this with very basic impact and dependency assessments, but these have been quite a successful way within their central banks to get the discussion started and justify the importance of addressing this.

We do need more stress-testing, but we also need a lot more scenarios that are easily usable by financial institutions. The NGFS does a fantastic job with climate scenarios and if nature could start to be incorporated as well, it will make it easier for financial institutions to start understanding this. If we’re to adopt proposed targets at COP15 to rewire our economic system by 2030 to stop and reverse nature loss, which means we’re going to have to move quickly. There is enough data and tools out there to start working out your biggest exposures and how to mitigate these.

Important for policymakers to recognise the linkages between climate and nature, to ensure that that’s reflected in all approaches, rather than operating in silos.

The CBD’s Global Biodiversity Framework needs to be ambitious, and it needs to be specific. The TNFD is a voluntary, market-led framework, which is a great way to begin, but over time governments and regulators will need to think about what needs to be mandatory and disclosed against those frameworks.

This issue needs traction in private and public markets, but the language can sometimes be difficult, how can we communicate this issue in a way the public can understand clearly?

If you look at biodiversity accounting, the terminology is so vague and definitions of biodiversity so generalised, it doesn’t mean anything to people. We’ve argued extinction is a very good way of communicating the urgency of the problem. Species accounting is a part of biodiversity reporting and disclosure frameworks. But we’ve suggested to use an extinction rate as a way of easily communicating what the problem is with biodiversity. With climate we have an easy target on reducing temperatures, but we don’t have the same for biodiversity. Language is important and the vagueness around nature terminology is one of the problems.

The language of financial risk is very familiar in western spheres where we’re occupied with measuring, evidence bases, and data. We must be aware this data focus is inherently quite alienating to other cultures, especially indigenous cultures who view the value of nature in more intrinsic terms. Even in the global north there are a lot of people who don’t speak the language of financial risk. So, we need to wary of the limitations of the financial risk narrative and not lose sight of the fact that what we’re talking about is ensuring that finance funds good activities and stops funding harmful activities. That’s the crux of the problem and the financial risk narrative is a very useful way to raise awareness amongst western actors, but its not the only story we need to tell.

We need multilingualism in this because, if we’re have any hope of getting the financial markets to turn, it needs to become unfortunately a very financialised language. Currently nature is spoken about mostly in its conservation sense and this doesn’t relate to financial markets. So, on the one hand you have to bring this very financialised perspective of nature, of our dependencies on it, and on the other hand, we need to bring the rest of society with us to whom this is a very foreign way of addressing things. So, there is a there is a call to be more multilingual in our approaches and speaking certain languages with certain audiences to get them into the conversation.

How do you make sure that the financial flows go to the places where globally there is the most benefit?

The issue is the financial flows are already there causing the damage, rather than a lack of positive financial flow. So, its things like TNFD which needs to be global frameworks that allows us to manage these existing financial flows. There’s indigenous people and local communities and their valued spaces, and the reason these things are being lost is because of encroachment from large financial projects into those places. So, the finance is already there, it’s about managing it appropriately rather than trying to find new flows of finance.

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