UN report calls for financial services to protect biodiversity

Financial services companies need to understand their impact and dependency on nature and set targets to achieve international policy goals on biodiversity says new UN-backed report.

The United Nations Environment Programme (UNEP) and the Natural Capital Finance Alliance (NCFA) have produced a report that shines a spotlight on the urgent need for financial sector action on biodiversity. The report highlights the need for banks, investors and insurers to set firm targets to reduce biodiversity loss across their activities.

“The COVID-19 pandemic is a stark reminder of our exposure to and the risks created by the loss of nature. We urgently need all sectors of the economy to create better outcomes for people and nature. This report shows that banks, investors and insurers have a crucial part to play too. By making nature part of its decisions, and setting ambitious targets for biodiversity, the financial sector can reduce its risks and help to build a more resilient economy,” said Corli Pretorius, deputy director, UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC).

Policy frameworks, such as the Post-2020 Global Biodiversity Framework, due to be agreed under the Convention on Biological Diversity in 2021, and the European Union’s 2030 Biodiversity Strategy, are placing biodiversity at the heart of a post-pandemic economic recovery. But, the report argues, these policy goals will be impossible to achieve unless financial institutions consider biodiversity, and urgently set targets to halt, or better reverse, current rates of ecosystem degradation and species loss. While many financial institutions have set climate targets in recent years, few have begun to address the critical issue of biodiversity loss. Significant attention is paid to the financial sector’s consideration of biodiversity, including a recent investigation by the NGO ShareAction, which found that none of the world's 75 largest asset managers has a dedicated policy on biodiversity.

This may be set to change. The European Commission, for example, is currently reviewing the reporting obligations of businesses under the Non-Financial Reporting Directive, with a view to potentially mandating new disclosures on biodiversity.

The report – developed by the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC – explores how financial institutions can contribute to halting biodiversity loss. It sets out the nine priority sectors (see notes to editor) with large financial flows and major potential dependencies or impacts on biodiversity. This enables financial institutions to gain an understanding of where the highest risks lie within their current activities to inform their target setting.

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