Why Nature Finance?
Natural ecosystem degradation is accelerating, leading to significant biodiversity loss and runaway climate change. Our US$100 trillion global economy is dependent on nature, from basic necessities such as food, water, and medicine through to technology, energy, and real estate (NatureFinance). Nature loss threatens an estimated USD$44 trillion of global GDP (IUCN).
Despite this, close to $7 trillion annually is invested globally into activities that have direct negative impacts on nature from both public and private sector sources – equivalent to roughly 7% of global GDP (UNEP).
To sustain biodiversity, annual funding of between USD$600 and 800 billion is required. Currently, funding deployed to biodiversity sits at less than US$150 billion. The majority of this funding gap can be closed by eliminating or repurposing agriculture, fossil fuel and fisheries subsidies that are harmful to nature; but globally new resources totalling approximately US$200 billion will need to be generated (IUCN).
Effective nature finance is a key tool and can help protect habitats, support sustainable land use practices, and restore natural landscapes, which in turn addresses environmental challenges, enhances resilience against climate impacts, and ensures the long-term health of our planet’s ecosystems (KPMG).
What is Nature Finance?
Nature finance refers to public and private capital flows that finance or invest in improvements and regeneration of the natural environment (Ecosystems Knowledge Network).
Nature finance encompasses a range of financial practices and services that account for nature-related financial risks and/or value natural capital and ecosystem services. This can include eliminating financial flows that undermine nature (for example, removing harmful subsidies or limiting financing to companies causing environmental degradation) or directing financial resources towards conservation and sustainable management of nature.
From an investment perspective, nature finance can include investing in companies that prioritize environmental sustainability in their operations, supply chains, and products or services; investing in companies that contribute to the conservation of natural resources, biodiversity, and ecosystems; or investing in ventures that develop and deploy innovative solutions for environmental challenges and in the bioeconomy (European Investment Bank, The Nature Conservancy).
KPMG provides a helpful outline of different public and private nature finance strategies as follows:
Risks
Financial institutions that neglect nature considerations are exposed to a range of risks.
In the realm of finance, many diversified investment portfolios are highly exposed to nature-related risks, often through supply chains of large corporations (WWF). TNFD has categorized nature-related risks into physical, transition, and systemic. In addition, the TNFD explores dependencies on nature and the risks arising from relying on ecosystem services.
- Physical risks result from the degradation of nature. For example, increased flood-risks from the loss of protective coastal habitats such as mangroves. The World Bank estimates that loss of ecosystem services could result in a USD 2.7 trillion contraction of the world’s GDP in 2030, with USD 400 billion decline in crop outputs alone. Physical risks materialize due to dependencies, which come from businesses relying on ecosystem services for operations, such as water flow or hazard mitigation. These risks become significant when ecosystems decline, affecting businesses’ ability to operate. Understanding the level of reliance and ecosystem condition is crucial for risk assessment (UNEP).
- Transition risks occur due to a misalignment of economic activities, often prompted by changes in regulation and policy, legal precedent, technology, or investor sentiment and consumer preferences. Transition risks may include reputational risks, commercial risks from changing demands, and technological shifts favoring environmentally friendly alternatives.
- Systemic risks arise from the breakdown of the entire financial and natural systems. The Network for Greening the Financial System has noted that nature-related risks could have significant macroeconomic implications, and that failure to account for, mitigate, and adapt to these implications is a source of risk for financial stability (UNPRI).
Companies and the finance industry must consider double materiality when it comes to nature-related risks. Double materiality refers to how nature may immediately impact financial performance (outside-in) and how the organization impacts nature, as well as the consequences for both the organization and society (inside-out) (UNEP).
Opportunities
Investing in nature can be a source of significant value.
Managing and investing in nature can generate positive economic returns. Generally, there are two main areas of nature-related business opportunity – nature-based solutions and the bioeconomy – that will require significant investment in the coming decades.
Nature-based solutions are defined as techniques that involve using nature as part of the solution to environmental issues such as mitigating or adapting to climate change, managing flood and coastal erosion risk, providing healthy, social, and liveable cities, or improving water quality (Ecosystems Knowledge Network). According to UNEP, finance for nature-based solutions needs to double by 2025 to meet global targets such as limiting climate change to 1.5°C and protecting 30% of land and sea by 2030, emphasizing the urgent need for increased investment.
The term bioeconomy is typically used to describe the process of converting renewable biological resources (inputs) into useful outputs in a manner that is compatible with sustainable management of nature. It is applicable to a range of industries including agriculture and animal technology, chemicals, materials, health and pharmaceuticals. (NatureFinance) The World Bioeconomy Forum estimates the total value of the bioeconomy to be approximately US$4 trillion and predicts it will rise to US$30 trillion by 2050, representing significant investment potential.
Impact
Protecting the natural environment is essential for the well-being of both people and the planet.
Investments in environmental sustainability have the potential to catalyse economic growth, foster innovation, and create long-term value for society. By aligning financial objectives with nature-based goals, investors can help accelerate the transition to a sustainable and resilient economy (KPMG). Protecting natural ecosystems and biodiversity not only safeguards essential resources for future generations but also supports human health, livelihoods, and well-being. By prioritizing nature and biodiversity, financial institutions can contribute to a more equitable and prosperous future for all (UNEP).
Nature Data
Biodiversity is highly localized and specific to a given region and ecosystem. This means that most global statistics are quite general and aggregated. We have therefore provided data on nature and biodiversity in Switzerland as it is the most relevant and local to our community. Here are some key statistics on the state of nature, categorized by land, water, air, and climate.
Land
Biodiversity Footprint
From 2000 to 2019, per capita pressure on biodiversity caused by Swiss consumption increased by 9%. This has led to a significant rise in species loss, with Switzerland’s biodiversity footprint exceeding sustainable limits. The situation is worsening, particularly due to high impacts from imported foodstuffs and animal feed.
Source: BAFU
Diversity of Species in Meadows and Pastures
The overall diversity of the species communities in meadows and pastures has declined since the early 2000s. This decline is indicative of a standardisation of the meadows/ pastures habitat throughout Switzerland, which is tantamount to biodiversity loss.
Source: BAFU
Agricultural Area
Approximately a quarter of Switzerland’s land area consists of agricultural land, and this area is slowly decreasing. As the area decreases, the remaining agricultural land is often used more intensively. This puts pressure on animals and plants that live on agricultural land that is extensively farmed.
Source: BAFU
Organically Farmed Area
An increase in organic farming is good for biodiversity. Organically farmed area increased considerably up to 2003, after which the increase slowed. In view of the rising sales of organic products, potential remains for the creation of more organically farmed area. The development is considered positive but the state could still be improved.
Source: BAFU
Water
Biological Status of Surface Waters
The diatom index shows good to very good water quality at over 90% of the monitoring sites, showing good nutrient levels. However, the assessment of the biological status of surface waters using fish and aquatic plants as indicators is particularly poor. Both indicators react to a number of different pollutants and depict the complexity and amount of human influence overall.
Source: BAFU
Phosphorus Concentration in Lakes
With the economic boom after 1945, phosphorus pollution of surface waters increased. Since the 1980s it has been declining, thanks largely to the water protection measures since 1970. Further improvement cannot be guaranteed in all the lakes because the soil phosphorus levels continue to be high, particularly in regions with high livestock densities. Reducing the soil reserves is a slow process which takes decades.
Source: BAFU
Nutrients in Watercourses
82% of monitoring stations for nitrate are in good or very good condition. Targets are however being exceeded locally in agricultural and developed regions. Problems occur mainly in small streams with a high wastewater content or a high proportion of intensive farming in the catchment. As no significant improvement is observed between 2011 and 2022, the evolution of nutrients in watercourses is considered unsatisfactory.
Source: BAFU
Bathing Water Quality
Thanks to various preventive measures and major efforts in waste water treatment over the last few decades, the bathing water quality of Swiss rivers and lakes is very good today. Only after heavy rainfall or during flooding is it advisable not to bathe in rivers, as bacteria adhere to suspended particles and these may be ingested by bathers if they swallow the water.
Source: BAFU
Air
Nitrogen Dioxide Emissions
Ambient limit levels in urban areas are consistently exceeded, whereas in rural areas concentrations are usually below the specified limits. Concentrations in suburban areas are around the limit level. However, nitrogen oxide pollution is still a serious problem that affects large areas of Switzerland.
Source: BAFU
Particulate Matter Emissions (PM10)
The level of PM10 has been substantially reduced in the last 20 years, due to the adopted air pollution control measures. Nevertheless, the annual and daily limits are still occasionally exceeded in cities and along heavily trafficked roads. The status is thus classified as medium. Only at monitoring stations located above 1,000 metres are the measured levels of PM10 significantly below the limit.
Source: BAFU
Switzerland’s greenhouse gas inventory
The greenhouse gas inventory details all of Switzerland’s greenhouse gas emissions. As well as carbon dioxide (CO2) emissions from the use of fossil energy sources, these also include CO2 emissions from industrial processes and waste incineration, emissions of the other greenhouse gases methane (CH4), nitrous oxide (N2O) and synthetic gases from a wide range of sources.
Source: BAFU
Trends in Greenhouse Gas Emissions Over Time (1990-2022)
Switzerland’s total greenhouse gas emissions have steadily decreased from 1990 to 2022, with the most significant reductions seen in CO₂. Methane and nitrous oxide emissions have also declined but at a slower pace. Synthetic gases, while a smaller contributor, have remained relatively stable. Peaks around the mid-2000s reflect higher emissions across all gases, but steady improvements since then indicate effective mitigation efforts.
Source: BAFU
Composition of Greenhouse Gas Emissions in 2022
In 2022, CO₂ accounted for the majority of greenhouse gas emissions in Switzerland, making up over 75% of the total. Methane (CH₄) was the second-largest contributor, followed by nitrous oxide (N₂O) and synthetic gases, which together represented smaller portions.
Source: BAFU
Sectoral Trends in Greenhouse Gas Emissions Over Time (1990-2022)
Transport remains the largest emitter by sector, with emissions peaking at 16.64 million tonnes in the early 2000s before gradually declining to 13.58 million tonnes. Industry emissions have steadily fallen while agricultural emissions have remained steady. Emissions from households and services have declined significantly due to energy efficiency measures, and waste emissions have dropped sharply with improved recycling efforts.
Source: BAFU
Composition of Greenhouse Gas Emissions by Sector in 2022
In 2022, 32.9% of the total greenhouse gas emissions were produced by Transport. Industry accounted for 23.1% including waste incineration GHG emissions, while agriculture represented 15.5% – equivalent to the share of Households. Commercial and institutional services accounted for 8%. Waste and synthetic gases together made up a small fraction of total emissions.
Source: BAFU
Tools & Guidance
| wdt_ID | Resource Name | Author(s) | Type | Audience | Link | Description |
|---|---|---|---|---|---|---|
| 48 | Climate Adaptation and Protected Areas Initiative: Nature-Based Solutions for Climate Adaptation | IISD | Guidance Note | Businesses | https://www.iisd.org/publications/guide/capa-nbs-climate-adaptation-infographic | Nature-based solutions for adaptation (NbS) can play a vital role in helping people and biodiversity build resilience to climate risks. Learn more about what effective NbS for adaptation are and their practical application across different ecosystems to strengthen their resilience. |
| 49 | Investing in Africa: Investing in Nature | NatureFinance | Report | Investors | https://www.naturefinance.net/resources-tools/investing-in-africa-investing-in-nature/ | Investing in Africa: Investing in Nature, a report by NatureFinance – explores the potential of nature credit instruments to drive private finance into African conservation and restoration. It was undertaken with the support of Advancing Green has been made possible with support from FSD Africa. |
| 50 | Assessing National Oil Companies' Transition Plans: An Essential Tool for Banks, Investors, and Regulators | IISD | Assessment Tool | Investors | https://www.iisd.org/publications/brief/assessing-national-oil-companies-transition-plans-tool | This brief, developed by the World Benchmarking Alliance, International Institute for Sustainable Development, and University of California Santa Barbara, builds on previous work from its authors, including an assessment of how investors can jumpstart energy transitions for NOCs and how NOCs themselves fare with their decarbonization strategies. It focuses particularly on internationally exposed NOCs (those that are more dependent on debt or equity financing or those that are listed). |
| 51 | The Global Bioeconomy | NatureFinance | Report | Businesses | https://www.naturefinance.net/resources-tools/global-bioeconomy-g20-stocktake/ | This stocktake looks at challenges and opportunities, as well as highlighting emerging themes that could be the focus for further research by the G20 Initiative on Bioeconomy. The new report is a response to the highly significant growth potential of the bioeconomy and aims to contribute to the inaugural G20 Initiative on Bioeconomy, launched by the Brazilian Presidency – whom will head the G20 until November 2024 and will then pass the baton to South Africa – to foster dialogue, international cooperation and, ultimately, a set of agreed High-Level Principles on Bioeconomy. |
| 52 | Climate-Nature Scenario Development for Financial Risk Assessment | NatureFinance | Assessment Tool | Investors | https://www.naturefinance.net/resources-tools/climate-nature-scenario-development-for-financial-risk-assessment-invitation-for-feedback-on-scenario-development-framework/ | The degradation of nature, including biodiversity loss, is a substantial threat not only to ecosystems and humanity, but also to the broader economy and financial stability. This is why financial stakeholders can benefit from scenarios that provide a comprehensive understanding of integrated climate- and nature-related economic and financial risks. |
| 53 | Kunming-Montreal Global Biodiversity Framework | UNEP | Framework | Businesses | https://www.unep.org/resources/kunming-montreal-global-biodiversity-framework | The conclusion of the 15th Conference of Parties to the UN Convention on Biological Diversity saw the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF). Amidst a dangerous decline in nature threatening the survival of 1 million species and impacting the lives of billions of people, the GBF aims to halt and reverse nature loss. The framework consists of global targets to be achieved by 2030 and beyond to safeguard and sustainably use biodiversity. |
| 54 | State of Finance for Nature 2023 Report | UNEP | Report | Investors Businesses |
https://www.unep.org/resources/state-finance-nature-2023 | The State of Finance for Nature annual report series tracks finance flows to nature-based solutions (NbS) and compares them to the finance needed to maximise the potential of Nature based Solutions to help tackle climate, biodiversity and degradation challenges. For the first time, this edition estimates the scale of nature-negative finance flows from both public and private sector sources globally. Nature based Solutions (NbS) provide critical investment opportunities as they are cost-effective and provide multiple benefits. |
| 55 | Investment Portfolio Impact Analysis Tool | UNEP FI | Assessment Tool | Investors | https://www.unepfi.org/impact/unep-fi-impact-analysis-tools/investment-portfolio-impact-analysis-tool/ | The Investment Portfolio Impact Analysis Tool was developed to enable financial institutions to holistically identify and assess the impacts associated with their investment portfolios. It requires users to input data about the nature, content and context of their portfolios. A set of in-built impact mappings is then combined with this data to help users identify the most significant impact areas of the portfolio and to reflect on their current impact performance , thus setting the basis for strategy development and target-setting. |
| 56 | TNFD Disclosure Recommendations | TNFD | Guidance Note | Businesses | https://tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-related_Financial_Disclosures_September_2023.pdf?v=1695118661 | The TNFD takes its inspiration and approach from the Task Force on Climate-Related Financial Disclosures (TCFD) and builds on the significant developments in sustainability corporate reporting since the release of the TCFD’s recommendations in 2017. The International Sustainability Standards Board (ISSB), the GRI and other standards and reporting organisations have worked closely with the Taskforce as knowledge partners. The TNFD has worked to draw from, and feed into, these relevant standards that are already established and emerging as the new global baseline for sustainability reporting. |
| 57 | LEAP Approach | TNFD | Guidance Note Assessment Tool |
Businesses | https://tnfd.global/wp-content/uploads/2023/08/Guidance_on_the_identification_and_assessment_of_nature-related_Issues_The_TNFD_LEAP_approach_V1.1_October2023.pdf?v=1698403116 | This document provides detailed guidance on the four phases of the LEAP approach designed to be used by an assessment team in an organisation: Locate, Evaluate, Assess and Prepare. It provides guidance to help you: - Scope your assessment - Locate your interface with nature - Evaluate your dependencies and impacts on nature - Assess your nature-related risks and opportunities - Prepare to respond to nature-related risks and opportunities and to report on your material nature-related issues. |
| 58 | Natural Capital Protocol | Capitals Coalition | Framework | Businesses | https://capitalscoalition.org/capitals-approach/natural-capital-protocol/?fwp_filter_tabs=training_material | The Natural Capital Protocol is a decision-making framework that enables organisations to identify, measure and value their direct and indirect impacts and dependencies on natural capital. All organizations to varying degrees are dependent on the health of the natural world. Organizations also impact on nature’s health, both positively and negatively. Understanding the complex and dynamic relationships that organizations have with the health of natural assets and the ecosystem services they provide enables organizations to make more informed decisions. A capitals approach empowers organizations to deliver benefits their employees, society, the broader economy and the natural world alongside their businesses. |
| 59 | Nature-related Financial Risks: A Conceptual Framework to Guide Action by Central Banks and Supervisors | NGFS | Framework | Investors | https://www.ngfs.net/sites/default/files/medias/documents/ngfs_conceptual-framework-on-nature-related-risks.pdf | NGFS created this conceptual framework for nature-related financial risk to help guide policies and action by central banks and supervisors. Building on previous work, it establishes a common understanding of these risks to help central banks and supervisors navigate the complexities and challenges collectively. The conceptual framework charts an important first step towards an integrated assessment of climate and broader nature-related risks. While climate change may be the starting point for action, science also tells us that broader nature-related risks cannot be analysed or addressed in isolation. |
| 60 | Overview of Biodiversity and Finance | Finance for Biodiversity | Guidance Note | Investors | https://www.financeforbiodiversity.org/publications/overview-of-initiatives-for-financial-institutions/ | The Overview of biodiversity-related initiatives for financial institutions is meant to help financial institutions understand what initiatives are out there, and who is doing what. It was launched in April 2021 by the Finance for Biodiversity Foundation, UNEP FI, the PRI, and the Finance@Biodiversity Community. Since the post-2020 Global Biodiversity Framework was adopted in December 2022, the momentum for biodiversity kept growing amongst financial institutions. Likewise, the number of communities, networks and initiatives dedicated to this topic evolved. This document provides a comprehensive overview of the main biodiversity-related initiatives currently targeting financial institutions, with the topics they address, as well as their activities and deliveries. |
| 61 | The Nature Target Setting Framework for Asset Managers and Asset Owners (beta version) | Finance for Biodiversity | Framework | Investors | https://www.financeforbiodiversity.org/publications/nature_target-setting_framework_for_asset_managers_and_asset_owners/ | The beta version framework seeks to create a shared understanding and common language for investors on target setting, while steering private financial flows in alignment with the mission of the Global Biodiversity Framework to halt and reverse biodiversity loss by 2030. |
| 62 | The Voluntary Carbon Market Report: 2022-2023 | SouthPole | Report | Businesses | https://www.southpole.com/publications/the-voluntary-carbon-market-report-2022-2023 | Many companies have recognised the powerful role of carbon credits within their climate strategies to drive meaningful action outside their value chains. But for both new market entrants and long-term buyers to tap into the evolving voluntary carbon market (VCM) for strategic advantage, they need to understand what's happening. This report explores key areas of the voluntary carbon market and aims to answer questions, such as: What were the main themes emerging around supply and demand last year? And why? What do companies need to know about the trends shaping the market in 2023? Which actors are driving integrity in both the quality of projects and related-claims? Who are the ones to watch? How is technology shaping parts of the market and what does it mean for businesses? What is the future of REDD+? What impact do agreements from COP27 have on the VCM? |
| 63 | Decarbonising Investment Portfolios on the Journey to Net Zero | SouthPole | Guidance Note | Investors | https://www.southpole.com/blog/decarbonising-investment-portfolios-net-zero | Blog - Matt Sprague and Charlie Brunel-Lister, climate strategy and sustainable finance experts at South Pole, explain how financial institutions can understand and tackle their scope 3 emissions to accelerate their climate journey. |
| 64 | TNFD-ESRS Correspondence Mapping | ESRS TNFD |
Report | Businesses | https://tnfd.global/wp-content/uploads/2024/06/TNFD-ESRS-Correspondence-mapping-Final.pdf | Since 2022, EFRAG and the TNFD have worked closely together to ensure continuous exchange in the development of the European Sustainability Reporting Standards (ESRS) environmental standards and the TNFD Recommendations and guidance. This collaboration has ensured a strong level of consistency in the language, approach and definitions in the ESRS environmental standards and the TNFD Recommendations and additional guidance. The MoU reflects their shared commitment to enhancing corporate transparency related to nature, including biodiversity and ecosystems. |
| 65 | Certificate of Advanced Studies in Nature Positive Economy | IHEID | Education | Investors Businesses |
https://executive.graduateinstitute.ch/programmes/nature-positive-economy | This executive programme will allow you to acquire the knowledge, skills and tools required to address crucial sustainability challenges from economic, legal, social and ecological perspectives, from the local to the global and to drive impact in the public, private or non-profit sectors. This course emphasises transversal, interdisciplinary approaches to developing solutions to address burning matters, including food security, energy transition, environmental and natural resource governance, and climate change. Alternative pathways to sustainable development and shared prosperity will be collectively debated, and actionable solutions will be developed during the programme. |
| 66 | Accelerating Finance for Nature: Barriers and Recommendations for Scaling Private Sector Investment | PwC | Report | Investors | https://www.pwc.com/gx/en/nature-and-biodiversity/nature-fin-accelerator-mode.pdf | By profiling over 80 global nature finance vehicles and conducting extensive interviews with stakeholders across the spectrum of market participants, this report assesses the key barriers and opportunities for scaling private sector investment in natural capital and provides recommendations to help drive financial flows towards nature – in particular, the establishment of a dedicated Nature Finance Accelerator |
| 67 | Managing Nature Risks: From Understanding to Action | PwC | Guidance Note | Businesses | https://www.pwc.com/gx/en/strategy-and-business/content/sbpwc-2023-04-19-Managing-nature-risks-v2.pdf | Businesses face new risks from nature loss, and will need to address the emerging regulatory, consumer and investor response. By putting nature positive strategies in place and integrating them into their plans, business leaders can harness new opportunities that create sustainable outcomes for all. This publication offers guidance on how to manage such nature risks and take action. |
| 68 | Nature and Financial Institutions in Africa: A First Assessment of Opportunities and Risks | VividEconomics | Report | Investors | https://www.mckinsey.com/capabilities/sustainability/our-insights/nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks | This report applies a quantitative risk assessment and stress-testing framework for financial institutions to the opportunities and risks relating to nature. It builds on the pioneering nature-related risk assessments undertaken by Banque de France and De Nederlandsche Bank (DNB), which estimated the share of assets held in the French and Dutch financial systems considered at high risk from nature loss. |
| 69 | The Green Scorpion: The MacroCriticality of Nature for Finance | Oxford Environmental Change Institute | Report | Investors | https://www.eci.ox.ac.uk/sites/default/files/2023-12/INCAF-MacroCriticality_of_Nature-December2023.pdf | The main objective of this report is to draw upon the science and economics of nature to help develop the scenario approaches for nature-related financial risks needed to assess the macrocriticality of nature for financial institutions, and inform action by Central Banks and financial institutions, and couple this with a preliminary assessment of the relative scale of risks across countries. |
| 70 | WWF Risk Filter Suite | WWF | Assessment Tool | Businesses Investors |
https://riskfilter.org/biodiversity/inform | Understand, assess and respond to your biodiversity risks for enhancing resilience. This tool is a corporate and portfolio-level screening tool to help companies and investors to prioritise action on what and where it matters the most to address biodiversity risks for enhancing business resilience and contributing to a sustainable future To get started, use the Biodiversity Risk Filter “Inform Module” and “Country Risk Profile” and the general associated Methodology Documentation. |
| 71 | ENCORE | ENCORE Nature | Assessment Tool | Businesses | https://www.encorenature.org/en/explore | ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) highlights how businesses may be exposed to accelerating environmental change. Start by selecting any economic sector or production process below to explore natural capital risks. |
| 72 | Sustainable by Nature: Our Biodiversity Roadmap 2021 | BNP Paribas Asset Management | Report | Investors | https://docfinder.bnpparibas-am.com/api/files/940B42EF-AFFF-4C89-8C32-D9BFBA72BF24 | This paper details BNP Paribas' views on the nature and urgency of the crisis and how they are actively responding to it. They have developed a biodiversity roadmap based on the six pillars of their approach to sustainability. |
| 73 | NatureAlign | Nature Finance | Assessment Tool | Investors | https://www.naturefinance.net/making-change/nature-risk/naturealign/ | NatureAlign is a suite of analytical modules developed by NatureFinance to support stakeholders within the financial system in aligning their financial flows with nature positive outcomes. The first module of NatureAlign is a free web app for private financial institutions. The app is being released as a beta version as it is still being developed and improved, with further steps and features on the way. It uses existing biophysical, spatial and financial datasets to provide financial institutions with a baseline analysis of their investments and loans with respect to nature. |
| 74 | Nature Finance Course | EPFL | Education | Investors Businesses |
https://edu.epfl.ch/coursebook/en/nature-finance-MGT-541 | This course explores the many financial instruments that can come as a support for protection and regeneration of natural assets. This course starts with an introduction to the scientific fundamental knowledge of key natural assets and on their economic value for the society. In a second phase, the course will review the current financial services offered to protect and develop and these assets. This includes traditional financial services (equity, credits, insurance, etc) but also an introduction to carbon an biodiversity credits. |
| 75 | From ozone to oxygen: Opportunities and risks in natural capital | UBS | Report | Investors Businesses |
https://www.ubs.com/global/en/sustainability-impact/2022/sustainability-impact-natural-capital.html | In this publication, sustainability specialists share their thoughts on the various aspects that we need to consider if we are to preserve and regenerate the earth’s limited stock of natural capital. They highlight different areas, including necessary policy innovations, the implementation of frameworks, and the role that investors and the private sector can play in improving our collective response to the impending challenges linked to natural capital. Our experts suggest thinking in systems could hold the key. |
| 76 | Bloom or Bust: Aligning technology and finance to address biodiversity challenges | UBS | Report | Investors | https://www.ubs.com/global/en/sustainability-impact/sustainability-insights/bloom-or-bust.html | This paper makes the case that biodiversity has been ignored for too long and now is under stress. This undermines the safety of people and species as well as the economy. There is a need for more nature-related data and the technology exists to produce it, however it needs to be scaled up rapidly. This will require financing and partnership models. |
| 77 | Climate meets nature: Integrating biodiversity into the energy transition | UBS | Guidance Note | Investors | https://www.ubs.com/global/en/assetmanagement/insights/thematic-viewpoints/sustainable-impact-investing/articles/climate-meets-nature.html | Climate and nature are so intertwined that impacts on one affect the other. The energy transition is crucial for meeting our climate goals and protecting nature. From 2019 to 2023, deploying key clean energy technologies helped us avoid around 2.2 billion tons of emissions annually. The anticipated growth in these technologies is critical to addressing our emissions budget challenge. However, the scale of growth in clean technologies could negatively impact nature. This paper explains why we must remove our carbon blinkers when planning and executing for the energy transition and offers practical steps to achieve this balance. |
| 78 | Green Finance Institute Useful Resources | Green Finance Institute | Report | Investors Businesses |
https://hive.greenfinanceinstitute.com/gfihive/useful-resources/ | This webpage provides a range websites reports and articles that discuss nature and finance. |
| 79 | Stocktake on Nature-related Risks | Financial Stability Board | Report | Investors | https://www.fsb.org/uploads/P180724.pdf | At the request of G20 Finance Ministers and Central Bank Governors, this report takes stock of regulatory and supervisory initiatives associated with the identification and assessment of nature-related financial risks. The stocktake also enquires about the perceptions of central banks and supervisors regarding whether nature degradation, such as biodiversity loss, is a relevant financial risk. It draws on a survey of participating FSB members and the work done by international organisations, including the conceptual framework developed by the Network for Greening the Financial System (NGFS) and work done by the Organisation for Economic Co- operation and Development (OECD), and funded by the European Union, on nature-related risks. |
| 80 | Discussion paper on biodiversity footprinting approaches for financial institutions | Taskforce on Nature-related Financial Disclosures (TNFD) | Toolkit | Investors | https://tnfd.global/publication/discussion-paper-on-biodiversity-footprinting-approaches-for-financial-institutions/#publication-content | This document is a discussion paper that presents an overview of the current landscape of biodiversity footprinting approaches, including their limitations and sets out six steps to help market participants select and disclose these approaches appropriate for their requirements. TNFD developed this paper in partnership with the Partnership for Biodiversity Accounting Financials (PBAF). It builds on the significant work on biodiversity footprinting of PBAF, the Align project, the Finance for Biodiversity Foundation and others to help companies and financial institutions make informed decisions on where to start and the approaches to use as they navigate this area. |
| 81 | Principles for Responsible Banking (PRB) Nature Target Setting | UNEP FI | Guidance Note | Investors Businesses |
https://www.unepfi.org/wordpress/wp-content/uploads/2023/11/PRB-Nature-Target-Setting-Guidance_2023.pdf | This guidance assists banks to take action—through portfolio-wide targets and other efforts—in support of the policy goals established by Kunming-Montreal Global Biodi- versity Framework (GBF). The GBF, signed by more than 190 countries, calls for a global commitment by governments and all actors of society to take urgent and mean- ingful action to halt and reverse biodiversity loss by 2030, foster a sustainable and equitable use of nature, and achieve a vision of living in harmony with nature by 2050. As major financiers of economic activity, banks must be at the forefront of shifting financial flows to incentivise nature gain, rather than nature loss. Banks have a key role to play in achieving the 23 targets underpinning the goals specified within the GBF, in part due to their activities in high impact sectors, their high levels of financing in emerging markets, and their power to direct financial flows towards nature-positive activities |
| 82 | Bonds to Finance the Sustainable Blue Economy | Asian Development Bank & International Finance Corporation | Guidance Note | Investors | https://www.icmagroup.org/assets/documents/Sustainable-finance/Bonds-to-Finance-the-Sustainable-Blue-Economy-a-Practitioners-Guide-September-2023.pdf | This voluntary Guidance is for broad use by the market • to provide issuers with guidance on the key components involved in launching a credible “blue bond,” • to aid investors by promoting availability of information to evaluate the environmental impact of their “blue bond” investments, and • to assist underwriters by offering vital steps that will facilitate transactions that preserve the integrity of the market. |
| 83 | Nature-related Financial Risks: a Conceptual Framework to guide Action by Central Banks and Supervisors | Network for Greening the Financial System | Framework | Investors | https://www.ngfs.net/sites/default/files/medias/documents/ngfs_conceptual-framework-on-nature-related-risks.pdf | The objective of the Task Force is to help mainstream the consideration of nature-related financial risks across the NGFS. As part of this effort, the Task Force is mandated to develop a conceptual framework on nature-related financial risks to guide action by central banks and supervisors.10 This document contains the beta version of an NGFS Framework for nature-related financial risks (the “Framework”). It adopts an integrated approach, meaning that climate-related financial risks are strongly interconnected with the broader environmental-related financial risks, and therefore considered within the scope of nature-related financial risks (without prejudice to the relevance of the NGFS’ work on climate). |
| 84 | Banking on nature: What the Kunming-Montreal Global Biodiversity Framework means for responsible banks | UNEP FI | Framework | Investors | https://www.unepfi.org/industries/banking/banking-on-nature/ | s part of a series of publications to help financial institutions understand the relevance and implications of the Kunming-Montreal Global Biodiversity Framework (GBF), this briefing provides banks a first overview of how the GBF applies to their industry, through the axes of risk, opportunities, dependencies and impacts. It aims to support the industry in managing associated risks, capturing relevant opportunities and preparing for anticipated policy developments that will yield new compliance and disclosure requirements. |
| 85 | Biodiversity and Finance: A Preliminary Assessment of Physical Risks for the Banking Sector in Emerging Markets | World Bank Group | Study | Investors | https://openknowledge.worldbank.org/server/api/core/bitstreams/9609dc6f-8b6d-4333-9a84-d4f21653a894/content | Economic activity depends on a flourishing biodiversity and intact environment through the provision of ecosystem services. The depletion of these services poses physical risks for the financial sector. This paper attempts to measure the potential exposure of the banking systems in 20 emerg- ing markets to nature loss through their lending portfolio. The results show that banks in emerging markets allocate around half of their credit portfolio to firms whose busi- ness processes are highly or very highly dependent on one or more ecosystem services. The results also provide initial and preliminary evidence that points to a negative cor- relation between country income level and dependency on ecosystem services. Accounting for indirect dependencies on ecosystem services via supply chains and trade could change this observed relationship, however. Furthermore, the highest dependencies on ecosystem services across coun- tries tend to be on climate regulation and flood and storm protection, indicating the interconnectedness of climate change and nature loss. |
| 86 | Act Now! The Why And How Of Biodiversity Integration By Financial Institutions | Finance for Biodiversity Foundation | Toolkit | Investors | https://www.financeforbiodiversity.org/publications/act-now-the-why-and-how-of-biodiversity-integration-by-financial-institutions/ | Biodiversity is a relatively new topic for many, and a lot is currently ‘work in progress’: global targets are being negotiated, biodiversity footprinting tools are emerging, regulations and standards are being drafted. Amidst these developments, this operational guide aims to provide a pragmatic answer to the question: ‘What can financial institutions do now?’. Because, if we are to reverse nature loss in this decade, the finance sector needs to act now. This guide shows what action is possible with the data and tools currently available. |
| 87 | Exploring Nature Impacts and Dependencies A Field Guide to Eight Key Sectors |
Ceres | Framework | Businesses Investors |
https://assets.ceres.org/sites/default/files/reports/2024-03/Ceres%20Exploring%20Nature%20Impacts%20and%20Dependencies%20Field%20Guide%202024.pdf | This guide provides a framework for investors to understand how businesses impact and depend on nature so that they can begin engaging with companies in their portfolios on nature. Nature impacts and dependencies vary from sector to sector and even from company to company, creating different levels of risk exposure for companies. Investors can reduce portfolio risk by engaging with companies on nature impacts and dependencies. |
Relevant Actors
| wdt_ID | Logo | Organisation Name | Website | Type of Organisation | Location | Description |
|---|---|---|---|---|---|---|
| 39 |  |
WWF (World Wildlife Fund) Switzerland | https://www.wwf.ch/fr | NGO | Switzerland | The global WWF network supports around 1,000 projects and operates in over 100 countries around the world. WWF Switzerland plays a leading role in this network. It is one of the largest donors for international programs and further develops nature and environmental protection work with professional knowledge. WWF Switzerland sets a good example in many areas, especially in child and youth work and in cooperation with companies for more sustainable products. WWF Switzerland is also well anchored at the local level with its cantonal sections. |
| 40 |  |
IISD (International Institute for Sustainable Development) | https://www.iisd.org/ | NGO | Global | The International Institute for Sustainable Development (IISD) is an award-winning independent think tank working to fulfil a bold commitment: to create a world where people and the planet thrive. It is guided by five core priorities—Climate, Resources, Economies, Act Together and Engage—which together form its CREATE strategy and guide its actions. |
| 41 |  |
WEF (World Economic Forum) | https://www.weforum.org/ | Industry Association | Global | The World Economic Forum is the International Organization for Public-Private Cooperation. It provides a global, impartial and not-for-profit platform for meaningful connection between stakeholders to establish trust, and build initiatives for cooperation and progress. WEF also has its own "Centre for Nature and Climate" which is a multistakeholder platform that focuses on protecting the environment and fostering sustainable practices. The centre's goals include achieving Net Zero emissions, promoting responsible land and ocean use, and improving the management of key resources like food, water, and raw materials. |
| 42 |  |
NatureFinance | https://www.naturefinance.net/ | NGO | Global | NatureFinance's vision is to align global finance with nature positive and equitable outcomes. Tackling climate change and reversing nature’s endangered state needs a reset of the nexus between nature and finance. They see an historic opportunity to re-shape tomorrow’s businesses and economies to ensure nature positive outcomes and equitable distribution of their economic benefits. |
| 43 |  |
UNEP (United Nations Environment Programme) | https://www.unep.org/ | Intergovernmental Organization | Global | The United Nations Environment Programme (UNEP) is the leading global authority on the environment. UNEP’s mission is to inspire, inform, and enable nations and peoples to improve their quality of life without compromising that of future generations. For over 50 years, UNEP has worked with governments, civil society, the private sector and UN entities to address humanity’s most pressing environmental challenges - from restoring the ozone layer to protecting the world's seas and promoting a green, inclusive economy. UNEP is driving transformational change by drilling down on the root causes of the triple planetary crisis of climate change, nature and biodiversity loss and pollution. |
| 44 |  |
UNEP FI (United Nations Environment Programme Finance Initiative) | https://www.unepfi.org/ | Intergovernmental Organization | Global | UNEP Finance Initiative brings together a large network of banks, insurers and investors that catalyses action across the financial system to deliver more sustainable global economies. For more than 30 years the initiative has been connecting the UN with financial institutions from around the world to shape the sustainable finance agenda. They have established the world’s foremost sustainability frameworks that help the finance industry address global environmental, social and governance (ESG) challenges. |
| 45 |  |
TNFD (Taskforce on Nature-Related Financial Disclosures) | https://tnfd.global/ | Collaboration | Global | TNFD is a market-led and science-based initiative supported by national governments, businesses and financial institutions worldwide. The Taskforce consists of 40 individual Taskforce Members representing financial institutions, corporates and market service providers with over US$20 trillion in assets. |
| 46 |  |
SSF (Swiss Sustainable Finance) | https://www.sustainablefinance.ch/en | Industry Association | Switzerland | Swiss Sustainable Finance (SSF) is the leading Swiss association in the field of sustainable finance. Founded in 2014, SSF has over 200 members and network partners including banks, asset managers, institutional asset owners, service providers, research and education providers and other organisations. SSF is based in Zurich with representation in Geneva and Lugano. SSF supports the Swiss financial centre in achieving a leading position in sustainable finance by: - Shaping Swiss frameworks, - Engaging key stakeholders, - Informing on best practice and - Creating supportive tools. |
| 47 |  |
Capitals Coalition | https://capitalscoalition.org/ | NGO | Global | The Capitals Coalition develops, advocates for and advances the capitals approach. They work with organisations and individuals spanning global systems to understand the value that flows from the capitals and to ensure that it is included in decision-making. The Capitals Coalition accelerates momentum, leverages success, connects powerful and engaged communities and identifies the areas, projects and partnerships where they can collaboratively drive transformational change. |
| 48 |  |
Green Finance Institute | https://www.greenfinanceinstitute.com/ | Research Institute | Global | The Green Finance Institute is accelerating the transition towards an environmentally sustainable and resilient economy by catalysing investment in net zero and nature positive outcomes. Uniquely positioned at the nexus of the public and private sectors, the Green Finance Institute is the UK and Europe’s principal forum for innovation in green finance. They partner with financial institutions, corporates, policymakers, academics, philanthropists and civil society experts to develop solutions that will redeploy capital at the pace and scale that science demands. |
| 49 |  |
Carbon4finance | https://www.carbon4finance.com | Data Provider | Global | Carbon4Finance offers climate data solutions covering both physical and transition risks, as well as biodiversity footprint. These proprietary methodologies allow financial organizations to measure the carbon and biodiversity footprint of their portfolio, assess the alignment with a 2°C-compatible scenario and measure the impacts that arise from events related to climate change and biodiversity loss. |
| 50 |  |
NGFS (Network for Greening the Financial System) | https://www.ngfs.net/en | Collaboration | Global | The Central Banks and Supervisors Network for Greening the Financial System (NGFS) is a group of Central Banks and Supervisors willing, on a voluntary basis, to exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy. Its purpose is to define and promote best practices to be implemented within and outside of the Membership of the NGFS and to conduct or commission analytical work on green finance. |
| 51 |  |
Cambridge Institute for Sustainability Leadership | https://www.cisl.cam.ac.uk/ | Research Institute | UK | The Cambridge Institute for Sustainability Leadership is an impact-led institute within the University of Cambridge that activates leadership globally to transform economies for people, nature and climate. Through their global network and hubs in Cambridge, Cape Town and Brussels, they work with leaders and innovators across business, finance and government to accelerate action for a sustainable future. |
| 52 |  |
Finance for Biodiversity | https://www.financeforbiodiversity.org/ | NGO | Global | The foundation provides a forum for sharing best practices, gaining knowledge on biodiversity and collaborating together to develop solutions, and collectively taking action towards governments and companies. One single financial institution may not be able to change the current course of nature destruction. However, they believe that, when joining forces in their foundation, financial institutions can redirect financial flows to companies that do not harm the environment or that even support its recovery. They can also engage with companies to make their business models less destructive. |
| 53 |  |
Business for Nature | https://www.businessfornature.org/ | Collaboration | Global | Business for Nature is a global coalition bringing together influential organizations and forward-thinking businesses to reverse nature loss and restore the planet's natural systems. By harnessing the power of business, the coalition drives impactful actions and policies to create a sustainable future. |
| 54 |  |
Ceres | https://www.ceres.org/ | NGO | Global | Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable economy. Ceres makes the business case for action on the greatest sustainability challenges facing our world today: climate change, water scarcity and pollution, and nature and biodiversity loss. Ceres also co-leads the Secretariat and Corporate Engagement Working Group of Nature Action 100, a global investor-led engagement initiative that aims to support greater corporate ambition and action on reversing nature and biodiversity loss. |
| 55 |  |
IUCN (International Union for Conservation of Nature) | https://www.iucn.org/our-work/business-finance-and-economics | Intergovernmental Organization | Global | Human wellbeing depends on nature and economic development can no longer come at nature’s expense. IUCN works to help countries mainstream nature into economic decisions, including making the private sector part of the solution for people and nature. |
| 56 |  |
Nature Conservancy - NatureVest | https://www.nature.org/en-us/ | NGO | Global | NatureVest is the impact investment unit of The Nature Conservancy, which leverages private capital to advance conservation efforts. NatureVest creates and manages investment opportunities that deliver both financial returns and measurable environmental benefits. |
| 57 |  |
NatureAlpha | https://www.naturealpha.ai/ | Data Provider | Global | NatureAlpha provides data and analytics on biodiversity for investors, enabling them to assess and integrate nature-related risks and opportunities into their investment decisions. The organization helps bridge the gap between financial markets and biodiversity conservation. |
| 58 |  |
SouthPole | https://www.southpole.com/projects/nature-based-projects | Consultancy | Global | South Pole develops and implements comprehensive emission reduction projects and strategies that turn climate action into long-term business opportunities for companies, governments and organisations around the world. SouthPole also has its own "Focus NbS" initiative that develops and implements nature-based solutions to address climate change and biodiversity loss. The initiative aims to harness the power of natural ecosystems to deliver sustainable environmental and economic benefits. |
| 59 |  |
Vivid Economics (McKinsey) | https://www.mckinsey.com/about-us/overview/alliances-and-acquisitions/vivid-economics | Consultancy | Global | Vivid Economics is a leading consultancy that provides economic analysis and advisory services focused on sustainability. The firm helps clients navigate the transition to a low-carbon and nature-positive economy by delivering insights and solutions that drive impactful change. McKinsey acquired Vivid Economics in March 2021. |
| 60 |  |
Biodiversity Credit Alliance | https://www.biodiversitycreditalliance.org/ | Collaboration | Global | The Biodiversity Credit Alliance (BCA) exists to provide guidance for the establishment of a credible and scalable market that stands up to the scrutiny of multiple stakeholders. Key among them are Indigenous Peoples and Local Communities at the frontline of the biodiversity crisis. Together they are working to ensure strong foundations and principles exist and can be applied by all market participants going forward. |
| 61 |  |
UNCTAD (UN Trade and Development) | https://unctad.org/ | Intergovernmental Organization | Global | UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively. It helps equip them to deal with the potential drawbacks of greater economic integration. To do this, UNCTAD provides analysis, facilitate consensus-building, and offer technical assistance. This helps the developing countries to use trade, investment, finance, and technology as vehicles for inclusive and sustainable development. |
| 62 |  |
Innovate4Nature | https://i4n.ch/ | NGO | Switzerland | Innovate4Nature's approach involves creating and incentivising a diverse portfolio of nature-positive solutions, building relationships between nature-positive solutions and strategic partners, embedding solutions in an ecosystem bolstered by their network, and providing thought leadership to inform and inspire the uptake of nature-positive solutions. The vision of I4N is to achieve a nature positive future where business thrive, ecosystems flourish and our planet is regenerated for generations to come. |
| 63 |  |
E4S (Enterprise4Society) | https://e4s.center/ | Research Institute | Switzerland | The E4S Center is the laboratory where its founding institutions jointly explore new ways of fulfilling their mission in the fields of economics and management, previewing and experimenting new developments in training, research and outreach in these disciplines. E4S lays claim to the following values: scientific excellence, an alliance between management and technology, a focus on major societal challenges, particularly with regard to the environment, the need for democratic acceptance of economic and scientific innovations, the social responsibility of companies and entrepreneurs, and the requirements of ethical management. |
| 65 | |
WWF (World Wildlife Fund) | https://www.worldwildlife.org/ | NGO | Global | WWF works to help local communities conserve the natural resources they depend upon; transform markets and policies toward sustainability; and protect and restore species and their habitats. Their efforts ensure that the value of nature is reflected in decision-making from a local to a global scale. WWF connects cutting-edge conservation science with the collective power of our partners in the field, more than one million supporters in the United States and five million globally, as well as partnerships with communities, companies, and governments. |
| 66 |  |
Matter | https://www.thisismatter.com/ | Data Provider | Global | Matter is a sustainability data and analytics provider. Matter has expanded its data offering to cover nature-related requirements for asset owners and managers. The data solution enables investors to quantify the degree to which their portfolios are exposed to nature-related criteria, analysing revenue streams coming from companies’ products and services. The tool’s features include layered analysis from asset to portfolio level, and access to granular insights based on rule-based methodologies aligned with reporting requirements. The solution builds on Matter’s data offering, encompassing key metrics and actionable insights on multiple ESG themes – including the climate transition. |
| 67 |  |
REDD+ | https://www.un-redd.org/about/about-redd#:~:text=REDD%2B%20is%20a%20climate%20change,enhancement%20of%20forest%20carbon%20stocks. | Intergovernmental Organization | Global | REDD+ is a climate change mitigation solution developed by Parties to the United Nations Framework Convention on Climate Change (UNFCCC). REDD+ goes beyond simply deforestation and forest degradation and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks. The framework is commonly referred to as the Warsaw Framework for REDD+ (WFR) adopted at COP 19 in Warsaw, December 2013 and provides the complete methodological and financing guidance for the implementation of REDD+ activities. REDD+ is also recognized in Article 5 of the Paris Agreement. |
| 68 |  |
UNFCCC (United Nations Framework Convention on Climate Change) | https://unfccc.int/ | Intergovernmental Organization | Global | The UNFCCC secretariat is the United Nations entity tasked with supporting the global response to the threat of climate change. The Convention has near universal membership (198 Parties) and is the parent treaty of the 2015 Paris Agreement. The main aim of the Paris Agreement is to keep the global average temperature rise this century as close as possible to 1.5 degrees Celsius above pre-industrial levels. |
| 69 |  |
BIOFIN | https://www.biofin.org/ | Collaboration | Global | BIOFIN was initiated ten years ago at the CBD COP 11, by UNDP and the European Commission, in response to the urgent global need to divert more finance from all possible sources towards global and national biodiversity goals. Now present in 40 countries, BIOFIN is working with governments, civil-society, vulnerable communities, and the private sector to catalyse investments in nature. |
Opportunities for Investors
Source: UNPRI
Align investments with nature conservation and restoration.
Investors should adopt policies that follow the Kunming-Montreal Global Biodiversity Framework, managing risks and seizing opportunities for positive impacts on nature.
Promote sustainable corporate practices through active ownership.
Investors can drive transformative change by ensuring investees disclose nature-related risks, adopt corporate practices to halt biodiversity loss, and align with global sustainability goals.
Advocate for nature-friendly policies.
Public policies should align with the Kunming-Montreal Global Biodiversity Framework, removing harmful instruments like agricultural and fishery subsidies. Investors have power as key economic players and therefore can play a role in shaping policy reform by engaging with governments, UN entities, and global standards.
Opportunities for Companies
Source: PwC
Measure your nature baseline.
To effectively measure nature baseline performance, or the extent of nature dependency and impacts, start by establishing your baseline using tools like IBAT, the ENCORE database, and the Aqueduct water-risk tools.
Identify risks, dependencies, and opportunities.
Once the baseline is determined, translate dependencies into potential risks and opportunities, envisioning scenarios where ecosystem failures could disrupt business operations or finding better nature management practices that can save costs and improve efficiencies.
Set ambitions and targets.
Once nature dependencies and impacts have been identified, companies should consider setting targets for improvement. Frameworks like the Science Based Targets Network (SBTN) offer structured approaches ranging from minimizing harm to achieving net positive impacts on biodiversity across the value chain.
- WHY NATURE?
-
Why Nature Finance?
Natural ecosystem degradation is accelerating, leading to significant biodiversity loss and runaway climate change. Our US$100 trillion global economy is dependent on nature, from basic necessities such as food, water, and medicine through to technology, energy, and real estate (NatureFinance). Nature loss threatens an estimated USD$44 trillion of global GDP (IUCN).
Despite this, close to $7 trillion annually is invested globally into activities that have direct negative impacts on nature from both public and private sector sources – equivalent to roughly 7% of global GDP (UNEP).
To sustain biodiversity, annual funding of between USD$600 and 800 billion is required. Currently, funding deployed to biodiversity sits at less than US$150 billion. The majority of this funding gap can be closed by eliminating or repurposing agriculture, fossil fuel and fisheries subsidies that are harmful to nature; but globally new resources totalling approximately US$200 billion will need to be generated (IUCN).
Effective nature finance is a key tool and can help protect habitats, support sustainable land use practices, and restore natural landscapes, which in turn addresses environmental challenges, enhances resilience against climate impacts, and ensures the long-term health of our planet’s ecosystems (KPMG).
What is Nature Finance?
Nature finance refers to public and private capital flows that finance or invest in improvements and regeneration of the natural environment (Ecosystems Knowledge Network).
Nature finance encompasses a range of financial practices and services that account for nature-related financial risks and/or value natural capital and ecosystem services. This can include eliminating financial flows that undermine nature (for example, removing harmful subsidies or limiting financing to companies causing environmental degradation) or directing financial resources towards conservation and sustainable management of nature.
From an investment perspective, nature finance can include investing in companies that prioritize environmental sustainability in their operations, supply chains, and products or services; investing in companies that contribute to the conservation of natural resources, biodiversity, and ecosystems; or investing in ventures that develop and deploy innovative solutions for environmental challenges and in the bioeconomy (European Investment Bank, The Nature Conservancy).
KPMG provides a helpful outline of different public and private nature finance strategies as follows:
Risks
Financial institutions that neglect nature considerations are exposed to a range of risks.
In the realm of finance, many diversified investment portfolios are highly exposed to nature-related risks, often through supply chains of large corporations (WWF). TNFD has categorized nature-related risks into physical, transition, and systemic. In addition, the TNFD explores dependencies on nature and the risks arising from relying on ecosystem services.
- Physical risks result from the degradation of nature. For example, increased flood-risks from the loss of protective coastal habitats such as mangroves. The World Bank estimates that loss of ecosystem services could result in a USD 2.7 trillion contraction of the world’s GDP in 2030, with USD 400 billion decline in crop outputs alone. Physical risks materialize due to dependencies, which come from businesses relying on ecosystem services for operations, such as water flow or hazard mitigation. These risks become significant when ecosystems decline, affecting businesses’ ability to operate. Understanding the level of reliance and ecosystem condition is crucial for risk assessment (UNEP).
- Transition risks occur due to a misalignment of economic activities, often prompted by changes in regulation and policy, legal precedent, technology, or investor sentiment and consumer preferences. Transition risks may include reputational risks, commercial risks from changing demands, and technological shifts favoring environmentally friendly alternatives.
- Systemic risks arise from the breakdown of the entire financial and natural systems. The Network for Greening the Financial System has noted that nature-related risks could have significant macroeconomic implications, and that failure to account for, mitigate, and adapt to these implications is a source of risk for financial stability (UNPRI).
Companies and the finance industry must consider double materiality when it comes to nature-related risks. Double materiality refers to how nature may immediately impact financial performance (outside-in) and how the organization impacts nature, as well as the consequences for both the organization and society (inside-out) (UNEP).
Opportunities
Investing in nature can be a source of significant value.
Managing and investing in nature can generate positive economic returns. Generally, there are two main areas of nature-related business opportunity – nature-based solutions and the bioeconomy – that will require significant investment in the coming decades.
Nature-based solutions are defined as techniques that involve using nature as part of the solution to environmental issues such as mitigating or adapting to climate change, managing flood and coastal erosion risk, providing healthy, social, and liveable cities, or improving water quality (Ecosystems Knowledge Network). According to UNEP, finance for nature-based solutions needs to double by 2025 to meet global targets such as limiting climate change to 1.5°C and protecting 30% of land and sea by 2030, emphasizing the urgent need for increased investment.
The term bioeconomy is typically used to describe the process of converting renewable biological resources (inputs) into useful outputs in a manner that is compatible with sustainable management of nature. It is applicable to a range of industries including agriculture and animal technology, chemicals, materials, health and pharmaceuticals. (NatureFinance) The World Bioeconomy Forum estimates the total value of the bioeconomy to be approximately US$4 trillion and predicts it will rise to US$30 trillion by 2050, representing significant investment potential.
Impact
Protecting the natural environment is essential for the well-being of both people and the planet.
Investments in environmental sustainability have the potential to catalyse economic growth, foster innovation, and create long-term value for society. By aligning financial objectives with nature-based goals, investors can help accelerate the transition to a sustainable and resilient economy (KPMG). Protecting natural ecosystems and biodiversity not only safeguards essential resources for future generations but also supports human health, livelihoods, and well-being. By prioritizing nature and biodiversity, financial institutions can contribute to a more equitable and prosperous future for all (UNEP).
- NATURE DATA
-
Nature Data
Biodiversity is highly localized and specific to a given region and ecosystem. This means that most global statistics are quite general and aggregated. We have therefore provided data on nature and biodiversity in Switzerland as it is the most relevant and local to our community. Here are some key statistics on the state of nature, categorized by land, water, air, and climate.
Land
Biodiversity Footprint
From 2000 to 2019, per capita pressure on biodiversity caused by Swiss consumption increased by 9%. This has led to a significant rise in species loss, with Switzerland’s biodiversity footprint exceeding sustainable limits. The situation is worsening, particularly due to high impacts from imported foodstuffs and animal feed.
Source: BAFU
Diversity of Species in Meadows and Pastures
The overall diversity of the species communities in meadows and pastures has declined since the early 2000s. This decline is indicative of a standardisation of the meadows/ pastures habitat throughout Switzerland, which is tantamount to biodiversity loss.
Source: BAFU
Agricultural Area
Approximately a quarter of Switzerland’s land area consists of agricultural land, and this area is slowly decreasing. As the area decreases, the remaining agricultural land is often used more intensively. This puts pressure on animals and plants that live on agricultural land that is extensively farmed.
Source: BAFU
Organically Farmed Area
An increase in organic farming is good for biodiversity. Organically farmed area increased considerably up to 2003, after which the increase slowed. In view of the rising sales of organic products, potential remains for the creation of more organically farmed area. The development is considered positive but the state could still be improved.
Source: BAFU
Water
Biological Status of Surface Waters
The diatom index shows good to very good water quality at over 90% of the monitoring sites, showing good nutrient levels. However, the assessment of the biological status of surface waters using fish and aquatic plants as indicators is particularly poor. Both indicators react to a number of different pollutants and depict the complexity and amount of human influence overall.
Source: BAFU
Phosphorus Concentration in Lakes
With the economic boom after 1945, phosphorus pollution of surface waters increased. Since the 1980s it has been declining, thanks largely to the water protection measures since 1970. Further improvement cannot be guaranteed in all the lakes because the soil phosphorus levels continue to be high, particularly in regions with high livestock densities. Reducing the soil reserves is a slow process which takes decades.
Source: BAFU
Nutrients in Watercourses
82% of monitoring stations for nitrate are in good or very good condition. Targets are however being exceeded locally in agricultural and developed regions. Problems occur mainly in small streams with a high wastewater content or a high proportion of intensive farming in the catchment. As no significant improvement is observed between 2011 and 2022, the evolution of nutrients in watercourses is considered unsatisfactory.
Source: BAFU
Bathing Water Quality
Thanks to various preventive measures and major efforts in waste water treatment over the last few decades, the bathing water quality of Swiss rivers and lakes is very good today. Only after heavy rainfall or during flooding is it advisable not to bathe in rivers, as bacteria adhere to suspended particles and these may be ingested by bathers if they swallow the water.
Source: BAFU
Air
Nitrogen Dioxide Emissions
Ambient limit levels in urban areas are consistently exceeded, whereas in rural areas concentrations are usually below the specified limits. Concentrations in suburban areas are around the limit level. However, nitrogen oxide pollution is still a serious problem that affects large areas of Switzerland.
Source: BAFU
Particulate Matter Emissions (PM10)
The level of PM10 has been substantially reduced in the last 20 years, due to the adopted air pollution control measures. Nevertheless, the annual and daily limits are still occasionally exceeded in cities and along heavily trafficked roads. The status is thus classified as medium. Only at monitoring stations located above 1,000 metres are the measured levels of PM10 significantly below the limit.
Source: BAFU
Switzerland’s greenhouse gas inventory
The greenhouse gas inventory details all of Switzerland’s greenhouse gas emissions. As well as carbon dioxide (CO2) emissions from the use of fossil energy sources, these also include CO2 emissions from industrial processes and waste incineration, emissions of the other greenhouse gases methane (CH4), nitrous oxide (N2O) and synthetic gases from a wide range of sources.
Source: BAFU
Trends in Greenhouse Gas Emissions Over Time (1990-2022)
Switzerland’s total greenhouse gas emissions have steadily decreased from 1990 to 2022, with the most significant reductions seen in CO₂. Methane and nitrous oxide emissions have also declined but at a slower pace. Synthetic gases, while a smaller contributor, have remained relatively stable. Peaks around the mid-2000s reflect higher emissions across all gases, but steady improvements since then indicate effective mitigation efforts.
Source: BAFU
Composition of Greenhouse Gas Emissions in 2022
In 2022, CO₂ accounted for the majority of greenhouse gas emissions in Switzerland, making up over 75% of the total. Methane (CH₄) was the second-largest contributor, followed by nitrous oxide (N₂O) and synthetic gases, which together represented smaller portions.
Source: BAFU
Sectoral Trends in Greenhouse Gas Emissions Over Time (1990-2022)
Transport remains the largest emitter by sector, with emissions peaking at 16.64 million tonnes in the early 2000s before gradually declining to 13.58 million tonnes. Industry emissions have steadily fallen while agricultural emissions have remained steady. Emissions from households and services have declined significantly due to energy efficiency measures, and waste emissions have dropped sharply with improved recycling efforts.
Source: BAFU
Composition of Greenhouse Gas Emissions by Sector in 2022
In 2022, 32.9% of the total greenhouse gas emissions were produced by Transport. Industry accounted for 23.1% including waste incineration GHG emissions, while agriculture represented 15.5% – equivalent to the share of Households. Commercial and institutional services accounted for 8%. Waste and synthetic gases together made up a small fraction of total emissions.
Source: BAFU
- TOOLS & GUIDANCE
-
Tools & Guidance
wdt_ID Resource Name Author(s) Type Audience Link Description 48 Climate Adaptation and Protected Areas Initiative: Nature-Based Solutions for Climate Adaptation IISD Guidance Note Businesses https://www.iisd.org/publications/guide/capa-nbs-climate-adaptation-infographic Nature-based solutions for adaptation (NbS) can play a vital role in helping people and biodiversity build resilience to climate risks. Learn more about what effective NbS for adaptation are and their practical application across different ecosystems to strengthen their resilience. 49 Investing in Africa: Investing in Nature NatureFinance Report Investors https://www.naturefinance.net/resources-tools/investing-in-africa-investing-in-nature/ Investing in Africa: Investing in Nature, a report by NatureFinance – explores the potential of nature credit instruments to drive private finance into African conservation and restoration. It was undertaken with the support of Advancing Green has been made possible with support from FSD Africa. 50 Assessing National Oil Companies' Transition Plans: An Essential Tool for Banks, Investors, and Regulators IISD Assessment Tool Investors https://www.iisd.org/publications/brief/assessing-national-oil-companies-transition-plans-tool This brief, developed by the World Benchmarking Alliance, International Institute for Sustainable Development, and University of California Santa Barbara, builds on previous work from its authors, including an assessment of how investors can jumpstart energy transitions for NOCs and how NOCs themselves fare with their decarbonization strategies. It focuses particularly on internationally exposed NOCs (those that are more dependent on debt or equity financing or those that are listed). 51 The Global Bioeconomy NatureFinance Report Businesses https://www.naturefinance.net/resources-tools/global-bioeconomy-g20-stocktake/ This stocktake looks at challenges and opportunities, as well as highlighting emerging themes that could be the focus for further research by the G20 Initiative on Bioeconomy. The new report is a response to the highly significant growth potential of the bioeconomy and aims to contribute to the inaugural G20 Initiative on Bioeconomy, launched by the Brazilian Presidency – whom will head the G20 until November 2024 and will then pass the baton to South Africa – to foster dialogue, international cooperation and, ultimately, a set of agreed High-Level Principles on Bioeconomy. 52 Climate-Nature Scenario Development for Financial Risk Assessment NatureFinance Assessment Tool Investors https://www.naturefinance.net/resources-tools/climate-nature-scenario-development-for-financial-risk-assessment-invitation-for-feedback-on-scenario-development-framework/ The degradation of nature, including biodiversity loss, is a substantial threat not only to ecosystems and humanity, but also to the broader economy and financial stability. This is why financial stakeholders can benefit from scenarios that provide a comprehensive understanding of integrated climate- and nature-related economic and financial risks. 53 Kunming-Montreal Global Biodiversity Framework UNEP Framework Businesses https://www.unep.org/resources/kunming-montreal-global-biodiversity-framework The conclusion of the 15th Conference of Parties to the UN Convention on Biological Diversity saw the adoption of the Kunming-Montreal Global Biodiversity Framework (GBF). Amidst a dangerous decline in nature threatening the survival of 1 million species and impacting the lives of billions of people, the GBF aims to halt and reverse nature loss. The framework consists of global targets to be achieved by 2030 and beyond to safeguard and sustainably use biodiversity. 54 State of Finance for Nature 2023 Report UNEP Report Investors
Businesseshttps://www.unep.org/resources/state-finance-nature-2023 The State of Finance for Nature annual report series tracks finance flows to nature-based solutions (NbS) and compares them to the finance needed to maximise the potential of Nature based Solutions to help tackle climate, biodiversity and degradation challenges. For the first time, this edition estimates the scale of nature-negative finance flows from both public and private sector sources globally. Nature based Solutions (NbS) provide critical investment opportunities as they are cost-effective and provide multiple benefits. 55 Investment Portfolio Impact Analysis Tool UNEP FI Assessment Tool Investors https://www.unepfi.org/impact/unep-fi-impact-analysis-tools/investment-portfolio-impact-analysis-tool/ The Investment Portfolio Impact Analysis Tool was developed to enable financial institutions to holistically identify and assess the impacts associated with their investment portfolios. It requires users to input data about the nature, content and context of their portfolios. A set of in-built impact mappings is then combined with this data to help users identify the most significant impact areas of the portfolio and to reflect on their current impact performance , thus setting the basis for strategy development and target-setting. 56 TNFD Disclosure Recommendations TNFD Guidance Note Businesses https://tnfd.global/wp-content/uploads/2023/08/Recommendations_of_the_Taskforce_on_Nature-related_Financial_Disclosures_September_2023.pdf?v=1695118661 The TNFD takes its inspiration and approach from the Task Force on Climate-Related Financial Disclosures (TCFD) and builds on the significant developments in sustainability corporate reporting since the release of the TCFD’s recommendations in 2017. The International Sustainability Standards Board (ISSB), the GRI and other standards and reporting organisations have worked closely with the Taskforce as knowledge partners. The TNFD has worked to draw from, and feed into, these relevant standards that are already established and emerging as the new global baseline for
sustainability reporting.57 LEAP Approach TNFD Guidance Note
Assessment ToolBusinesses https://tnfd.global/wp-content/uploads/2023/08/Guidance_on_the_identification_and_assessment_of_nature-related_Issues_The_TNFD_LEAP_approach_V1.1_October2023.pdf?v=1698403116 This document provides detailed guidance on the four phases of the LEAP approach designed to be used by an assessment team in an organisation: Locate, Evaluate, Assess and Prepare. It provides guidance to help you:
- Scope your assessment
- Locate your interface with nature
- Evaluate your dependencies and impacts on nature
- Assess your nature-related risks and opportunities
- Prepare to respond to nature-related risks and opportunities and to report on your material nature-related issues.58 Natural Capital Protocol Capitals Coalition Framework Businesses https://capitalscoalition.org/capitals-approach/natural-capital-protocol/?fwp_filter_tabs=training_material The Natural Capital Protocol is a decision-making framework that enables organisations to identify, measure and value their direct and indirect impacts and dependencies on natural capital. All organizations to varying degrees are dependent on the health of the natural world. Organizations also impact on nature’s health, both positively and negatively. Understanding the complex and dynamic relationships that organizations have with the health of natural assets and the ecosystem services they provide enables organizations to make more informed decisions. A capitals approach empowers organizations to deliver benefits their employees, society, the broader economy and the natural world alongside their businesses. 59 Nature-related Financial Risks: A Conceptual Framework to Guide Action by Central Banks and Supervisors NGFS Framework Investors https://www.ngfs.net/sites/default/files/medias/documents/ngfs_conceptual-framework-on-nature-related-risks.pdf NGFS created this conceptual framework for nature-related financial risk to help guide policies and action by central banks and supervisors. Building on previous work, it establishes a common understanding of these risks to help central banks and supervisors navigate the complexities and challenges collectively. The conceptual framework charts an important first step towards an integrated assessment of climate and broader nature-related risks. While climate change may be the starting point for action, science also tells us that broader nature-related risks cannot be analysed or addressed in isolation. 60 Overview of Biodiversity and Finance Finance for Biodiversity Guidance Note Investors https://www.financeforbiodiversity.org/publications/overview-of-initiatives-for-financial-institutions/ The Overview of biodiversity-related initiatives for financial institutions is meant to help financial institutions understand what initiatives are out there, and who is doing what. It was launched in April 2021 by the Finance for Biodiversity Foundation, UNEP FI, the PRI, and the Finance@Biodiversity Community. Since the post-2020 Global Biodiversity Framework was adopted in December 2022, the momentum for biodiversity kept growing amongst financial institutions. Likewise, the number of communities, networks and initiatives dedicated to this topic evolved. This document provides a comprehensive overview of the main biodiversity-related initiatives currently targeting financial institutions, with the topics they address, as well as their activities and deliveries. 61 The Nature Target Setting Framework for Asset Managers and Asset Owners (beta version) Finance for Biodiversity Framework Investors https://www.financeforbiodiversity.org/publications/nature_target-setting_framework_for_asset_managers_and_asset_owners/ The beta version framework seeks to create a shared understanding and common language for investors on target setting, while steering private financial flows in alignment with the mission of the Global Biodiversity Framework to halt and reverse biodiversity loss by 2030. 62 The Voluntary Carbon Market Report: 2022-2023 SouthPole Report Businesses https://www.southpole.com/publications/the-voluntary-carbon-market-report-2022-2023 Many companies have recognised the powerful role of carbon credits within their climate strategies to drive meaningful action outside their value chains. But for both new market entrants and long-term buyers to tap into the evolving voluntary carbon market (VCM) for strategic advantage, they need to understand what's happening. This report explores key areas of the voluntary carbon market and aims to answer questions, such as:
What were the main themes emerging around supply and demand last year? And why?
What do companies need to know about the trends shaping the market in 2023?
Which actors are driving integrity in both the quality of projects and related-claims? Who are the ones to watch?
How is technology shaping parts of the market and what does it mean for businesses?
What is the future of REDD+?
What impact do agreements from COP27 have on the VCM?63 Decarbonising Investment Portfolios on the Journey to Net Zero SouthPole Guidance Note Investors https://www.southpole.com/blog/decarbonising-investment-portfolios-net-zero Blog - Matt Sprague and Charlie Brunel-Lister, climate strategy and sustainable finance experts at South Pole, explain how financial institutions can understand and tackle their scope 3 emissions to accelerate their climate journey. 64 TNFD-ESRS Correspondence Mapping ESRS
TNFDReport Businesses https://tnfd.global/wp-content/uploads/2024/06/TNFD-ESRS-Correspondence-mapping-Final.pdf Since 2022, EFRAG and the TNFD have worked closely
together to ensure continuous exchange in the development
of the European Sustainability Reporting Standards (ESRS)
environmental standards and the TNFD Recommendations
and guidance. This collaboration has ensured a strong level
of consistency in the language, approach and definitions in
the ESRS environmental standards and the TNFD
Recommendations and additional guidance. The MoU reflects their shared commitment to enhancing corporate
transparency related to nature, including biodiversity and ecosystems.65 Certificate of Advanced Studies in Nature Positive Economy IHEID Education Investors
Businesseshttps://executive.graduateinstitute.ch/programmes/nature-positive-economy This executive programme will allow you to acquire the knowledge, skills and tools required to address crucial sustainability challenges from economic, legal, social and ecological perspectives, from the local to the global and to drive impact in the public, private or non-profit sectors.
This course emphasises transversal, interdisciplinary approaches to developing solutions to address burning matters, including food security, energy transition, environmental and natural resource governance, and climate change. Alternative pathways to sustainable development and shared prosperity will be collectively debated, and actionable solutions will be developed during the programme.66 Accelerating Finance for Nature: Barriers and Recommendations for Scaling Private Sector Investment PwC Report Investors https://www.pwc.com/gx/en/nature-and-biodiversity/nature-fin-accelerator-mode.pdf By profiling over 80 global nature finance vehicles and conducting extensive interviews with stakeholders across the spectrum of market participants, this report assesses the key barriers and opportunities for scaling private sector investment in natural capital and provides recommendations to help drive financial flows towards nature – in particular, the establishment of a dedicated Nature Finance Accelerator 67 Managing Nature Risks: From Understanding to Action PwC Guidance Note Businesses https://www.pwc.com/gx/en/strategy-and-business/content/sbpwc-2023-04-19-Managing-nature-risks-v2.pdf Businesses face new risks from nature loss, and will need to address the emerging regulatory, consumer and investor response. By putting nature positive strategies in place and integrating them into their plans, business leaders can harness new opportunities that create sustainable outcomes for all. This publication offers guidance on how to manage such nature risks and take action. 68 Nature and Financial Institutions in Africa: A First Assessment of Opportunities and Risks VividEconomics Report Investors https://www.mckinsey.com/capabilities/sustainability/our-insights/nature-and-financial-institutions-in-africa-a-first-assessment-of-opportunities-and-risks This report applies a quantitative risk assessment and stress-testing framework for financial institutions to the opportunities and risks relating to nature. It builds on the pioneering nature-related risk assessments undertaken by Banque de France and De Nederlandsche Bank (DNB), which estimated the share of assets held in the French and Dutch financial systems considered at high risk from nature loss. 69 The Green Scorpion: The MacroCriticality of Nature for Finance Oxford Environmental Change Institute Report Investors https://www.eci.ox.ac.uk/sites/default/files/2023-12/INCAF-MacroCriticality_of_Nature-December2023.pdf The main objective of this report is to draw upon the science and economics of nature to help develop the scenario approaches for nature-related financial risks needed to assess the macrocriticality of nature for financial institutions, and inform action by Central Banks and financial institutions, and couple this with a preliminary assessment of the relative scale of risks across countries. 70 WWF Risk Filter Suite WWF Assessment Tool Businesses
Investorshttps://riskfilter.org/biodiversity/inform Understand, assess and respond to your biodiversity risks for enhancing resilience. This tool is a corporate and portfolio-level screening tool to help companies and investors to prioritise action on what and where it matters the most to address biodiversity risks for enhancing business resilience and contributing to a sustainable future
To get started, use the Biodiversity Risk Filter “Inform Module” and “Country Risk Profile” and the general associated Methodology Documentation.71 ENCORE ENCORE Nature Assessment Tool Businesses https://www.encorenature.org/en/explore ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) highlights how businesses may be exposed to accelerating environmental change. Start by selecting any economic sector or production process below to explore natural capital risks. 72 Sustainable by Nature: Our Biodiversity Roadmap 2021 BNP Paribas Asset Management Report Investors https://docfinder.bnpparibas-am.com/api/files/940B42EF-AFFF-4C89-8C32-D9BFBA72BF24 This paper details BNP Paribas' views on the nature and urgency of the crisis and how they are actively responding to it. They have developed a biodiversity roadmap based on the six pillars of their approach to sustainability. 73 NatureAlign Nature Finance Assessment Tool Investors https://www.naturefinance.net/making-change/nature-risk/naturealign/ NatureAlign is a suite of analytical modules developed by NatureFinance to support stakeholders within the financial system in aligning their financial flows with nature positive outcomes. The first module of NatureAlign is a free web app for private financial institutions. The app is being released as a beta version as it is still being developed and improved, with further steps and features on the way. It uses existing biophysical, spatial and financial datasets to provide financial institutions with a baseline analysis of their investments and loans with respect to nature. 74 Nature Finance Course EPFL Education Investors
Businesseshttps://edu.epfl.ch/coursebook/en/nature-finance-MGT-541 This course explores the many financial instruments that can come as a support for protection and regeneration of natural assets. This course starts with an introduction to the scientific fundamental knowledge of key natural assets and on their economic value for the society.
In a second phase, the course will review the current financial services offered to protect and develop and these assets. This includes traditional financial services (equity, credits, insurance, etc) but also an introduction to carbon an biodiversity credits.75 From ozone to oxygen: Opportunities and risks in natural capital UBS Report Investors
Businesseshttps://www.ubs.com/global/en/sustainability-impact/2022/sustainability-impact-natural-capital.html In this publication, sustainability specialists share their thoughts on the various aspects that we need to consider if we are to preserve and regenerate the earth’s limited stock of natural capital. They highlight different areas, including necessary policy innovations, the implementation of frameworks, and the role that investors and the private sector can play in improving our collective response to the impending challenges linked to natural capital. Our experts suggest thinking in systems could hold the key. 76 Bloom or Bust: Aligning technology and finance to address biodiversity challenges UBS Report Investors https://www.ubs.com/global/en/sustainability-impact/sustainability-insights/bloom-or-bust.html This paper makes the case that biodiversity has been ignored for too long and now is under stress. This undermines the safety of people and species as well as the economy. There is a need for more nature-related data and the technology exists to produce it, however it needs to be scaled up rapidly. This will require financing and partnership models. 77 Climate meets nature: Integrating biodiversity into the energy transition UBS Guidance Note Investors https://www.ubs.com/global/en/assetmanagement/insights/thematic-viewpoints/sustainable-impact-investing/articles/climate-meets-nature.html Climate and nature are so intertwined that impacts on one affect the other. The energy transition is crucial for meeting our climate goals and protecting nature. From 2019 to 2023, deploying key clean energy technologies helped us avoid around 2.2 billion tons of emissions annually.
The anticipated growth in these technologies is critical to addressing our emissions budget challenge. However, the scale of growth in clean technologies could negatively impact nature.
This paper explains why we must remove our carbon blinkers when planning and executing for the energy transition and offers practical steps to achieve this balance.78 Green Finance Institute Useful Resources Green Finance Institute Report Investors
Businesseshttps://hive.greenfinanceinstitute.com/gfihive/useful-resources/ This webpage provides a range websites
reports and articles that discuss nature and finance.79 Stocktake on Nature-related Risks Financial Stability Board Report Investors https://www.fsb.org/uploads/P180724.pdf At the request of G20 Finance Ministers and Central Bank Governors, this report takes stock of regulatory and supervisory initiatives associated with the identification and assessment of nature-related financial risks. The stocktake also enquires about the perceptions of central banks and supervisors regarding whether nature degradation, such as biodiversity loss, is a relevant financial risk. It draws on a survey of participating FSB members and the work done by international organisations, including the conceptual framework developed by the Network for Greening the Financial System (NGFS) and work done by the Organisation for Economic Co- operation and Development (OECD), and funded by the European Union, on nature-related risks. 80 Discussion paper on biodiversity footprinting approaches for financial institutions Taskforce on Nature-related Financial Disclosures (TNFD) Toolkit Investors https://tnfd.global/publication/discussion-paper-on-biodiversity-footprinting-approaches-for-financial-institutions/#publication-content This document is a discussion paper that presents an overview of the current landscape of biodiversity footprinting approaches, including their limitations and sets out six steps to help market participants select and disclose these approaches appropriate for their requirements.
TNFD developed this paper in partnership with the Partnership for Biodiversity Accounting Financials (PBAF). It builds on the significant work on biodiversity footprinting of PBAF, the Align project, the Finance for Biodiversity Foundation and others to help companies and financial institutions make informed decisions on where to start and the approaches to use as they navigate this area.81 Principles for Responsible Banking (PRB) Nature Target Setting UNEP FI Guidance Note Investors
Businesseshttps://www.unepfi.org/wordpress/wp-content/uploads/2023/11/PRB-Nature-Target-Setting-Guidance_2023.pdf This guidance assists banks to take action—through portfolio-wide targets and other efforts—in support of the policy goals established by Kunming-Montreal Global Biodi- versity Framework (GBF). The GBF, signed by more than 190 countries, calls for a global commitment by governments and all actors of society to take urgent and mean- ingful action to halt and reverse biodiversity loss by 2030, foster a sustainable and equitable use of nature, and achieve a vision of living in harmony with nature by 2050. As major financiers of economic activity, banks must be at the forefront of shifting financial flows to incentivise nature gain, rather than nature loss. Banks have a key role to play in achieving the 23 targets underpinning the goals specified within the GBF, in part due to their activities in high impact sectors, their high levels of financing in emerging markets, and their power to direct financial flows towards nature-positive activities 82 Bonds to Finance the Sustainable Blue Economy Asian Development Bank & International Finance Corporation Guidance Note Investors https://www.icmagroup.org/assets/documents/Sustainable-finance/Bonds-to-Finance-the-Sustainable-Blue-Economy-a-Practitioners-Guide-September-2023.pdf This voluntary Guidance is for broad use by the market
• to provide issuers with guidance on the key components involved in launching a credible “blue bond,”
• to aid investors by promoting availability of information to evaluate the environmental impact of their
“blue bond” investments, and
• to assist underwriters by offering vital steps that will facilitate transactions that preserve the integrity of
the market.83 Nature-related Financial Risks: a Conceptual Framework to guide Action by Central Banks and Supervisors Network for Greening the Financial System Framework Investors https://www.ngfs.net/sites/default/files/medias/documents/ngfs_conceptual-framework-on-nature-related-risks.pdf The objective of the Task Force is to help mainstream the consideration of nature-related financial risks across the NGFS. As part of this effort, the Task Force is mandated to develop a conceptual framework on nature-related financial risks to guide action by central banks and supervisors.10
This document contains the beta version of an NGFS Framework for nature-related financial risks (the “Framework”). It adopts an integrated approach, meaning that climate-related financial risks are strongly interconnected with the broader environmental-related financial risks, and therefore considered within the scope of nature-related financial risks (without prejudice to the relevance of the NGFS’ work on climate).84 Banking on nature: What the Kunming-Montreal Global Biodiversity Framework means for responsible banks UNEP FI Framework Investors https://www.unepfi.org/industries/banking/banking-on-nature/ s part of a series of publications to help financial institutions understand the relevance and implications of the Kunming-Montreal Global Biodiversity Framework (GBF), this briefing provides banks a first overview of how the GBF applies to their industry, through the axes of risk, opportunities, dependencies and impacts. It aims to support the industry in managing associated risks, capturing relevant opportunities and preparing for anticipated policy developments that will yield new compliance and disclosure requirements. 85 Biodiversity and Finance: A Preliminary Assessment of Physical Risks for the Banking Sector in Emerging Markets World Bank Group Study Investors https://openknowledge.worldbank.org/server/api/core/bitstreams/9609dc6f-8b6d-4333-9a84-d4f21653a894/content Economic activity depends on a flourishing biodiversity and intact environment through the provision of ecosystem services. The depletion of these services poses physical risks for the financial sector. This paper attempts to measure the potential exposure of the banking systems in 20 emerg- ing markets to nature loss through their lending portfolio. The results show that banks in emerging markets allocate around half of their credit portfolio to firms whose busi- ness processes are highly or very highly dependent on one or more ecosystem services. The results also provide initial
and preliminary evidence that points to a negative cor- relation between country income level and dependency on ecosystem services. Accounting for indirect dependencies on ecosystem services via supply chains and trade could change this observed relationship, however. Furthermore, the highest dependencies on ecosystem services across coun- tries tend to be on climate regulation and flood and storm protection, indicating the interconnectedness of climate change and nature loss.86 Act Now! The Why And How Of Biodiversity Integration By Financial Institutions Finance for Biodiversity Foundation Toolkit Investors https://www.financeforbiodiversity.org/publications/act-now-the-why-and-how-of-biodiversity-integration-by-financial-institutions/ Biodiversity is a relatively new topic for many, and a lot is currently ‘work in progress’: global targets are being negotiated, biodiversity footprinting tools are emerging, regulations and standards are being drafted. Amidst these developments, this operational guide aims to provide a pragmatic answer to the question: ‘What can financial institutions do now?’. Because, if we are to reverse nature loss in this decade, the finance sector needs to act now. This guide shows what action is possible with the data and tools currently available. 87 Exploring Nature Impacts and Dependencies
A Field Guide to Eight Key SectorsCeres Framework Businesses
Investorshttps://assets.ceres.org/sites/default/files/reports/2024-03/Ceres%20Exploring%20Nature%20Impacts%20and%20Dependencies%20Field%20Guide%202024.pdf This guide provides a framework for investors to understand how businesses impact and depend on nature so that they can begin engaging with companies in their portfolios on nature. Nature impacts and dependencies vary from sector to sector and even from company to company, creating different levels of risk exposure for companies. Investors can reduce portfolio risk by engaging with companies on nature impacts and dependencies. - RELEVANT ACTORS
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Relevant Actors
wdt_ID Logo Organisation Name Website Type of Organisation Location Description 39 
WWF (World Wildlife Fund) Switzerland https://www.wwf.ch/fr NGO Switzerland The global WWF network supports around 1,000 projects and operates in over 100 countries around the world. WWF Switzerland plays a leading role in this network. It is one of the largest donors for international programs and further develops nature and environmental protection work with professional knowledge. WWF Switzerland sets a good example in many areas, especially in child and youth work and in cooperation with companies for more sustainable products. WWF Switzerland is also well anchored at the local level with its cantonal sections. 40 
IISD (International Institute for Sustainable Development) https://www.iisd.org/ NGO Global The International Institute for Sustainable Development (IISD) is an award-winning independent think tank working to fulfil a bold commitment: to create a world where people and the planet thrive. It is guided by five core priorities—Climate, Resources, Economies, Act Together and Engage—which together form its CREATE strategy and guide its actions. 41 
WEF (World Economic Forum) https://www.weforum.org/ Industry Association Global The World Economic Forum is the International Organization for Public-Private Cooperation. It provides a global, impartial and not-for-profit platform for meaningful connection between stakeholders to establish trust, and build initiatives for cooperation and progress.
WEF also has its own "Centre for Nature and Climate" which is a multistakeholder platform that focuses on protecting the environment and fostering sustainable practices. The centre's goals include achieving Net Zero emissions, promoting responsible land and ocean use, and improving the management of key resources like food, water, and raw materials.42 
NatureFinance https://www.naturefinance.net/ NGO Global NatureFinance's vision is to align global finance with nature positive and equitable outcomes. Tackling climate change and reversing nature’s endangered state needs a reset of the nexus between nature and finance. They see an historic opportunity to re-shape tomorrow’s businesses and economies to ensure nature positive outcomes and equitable distribution of their economic benefits. 43 
UNEP (United Nations Environment Programme) https://www.unep.org/ Intergovernmental Organization Global The United Nations Environment Programme (UNEP) is the leading global authority on the environment. UNEP’s mission is to inspire, inform, and enable nations and peoples to improve their quality of life without compromising that of future generations. For over 50 years, UNEP has worked with governments, civil society, the private sector and UN entities to address humanity’s most pressing environmental challenges - from restoring the ozone layer to protecting the world's seas and promoting a green, inclusive economy. UNEP is driving transformational change by drilling down on the root causes of the triple planetary crisis of climate change, nature and biodiversity loss and pollution. 44 
UNEP FI (United Nations Environment Programme Finance Initiative) https://www.unepfi.org/ Intergovernmental Organization Global UNEP Finance Initiative brings together a large network of banks, insurers and investors that catalyses action across the financial system to deliver more sustainable global economies.
For more than 30 years the initiative has been connecting the UN with financial institutions from around the world to shape the sustainable finance agenda. They have established the world’s foremost sustainability frameworks that help the finance industry address global environmental, social and governance (ESG) challenges.45 
TNFD (Taskforce on Nature-Related Financial Disclosures) https://tnfd.global/ Collaboration Global TNFD is a market-led and science-based initiative supported by national governments, businesses and financial institutions worldwide. The Taskforce consists of 40 individual Taskforce Members representing financial institutions, corporates and market service providers with over US$20 trillion in assets. 46 
SSF (Swiss Sustainable Finance) https://www.sustainablefinance.ch/en Industry Association Switzerland Swiss Sustainable Finance (SSF) is the leading Swiss association in the field of sustainable finance. Founded in 2014, SSF has over 200 members and network partners including banks, asset managers, institutional asset owners, service providers, research and education providers and other organisations. SSF is based in Zurich with representation in Geneva and Lugano.
SSF supports the Swiss financial centre in achieving a leading position in sustainable finance by:
- Shaping Swiss frameworks,
- Engaging key stakeholders,
- Informing on best practice and
- Creating supportive tools.47 
Capitals Coalition https://capitalscoalition.org/ NGO Global The Capitals Coalition develops, advocates for and advances the capitals approach. They work with organisations and individuals spanning global systems to understand the value that flows from the capitals and to ensure that it is included in decision-making. The Capitals Coalition accelerates momentum, leverages success, connects powerful and engaged communities and identifies the areas, projects and partnerships where they can collaboratively drive transformational change. 48 
Green Finance Institute https://www.greenfinanceinstitute.com/ Research Institute Global The Green Finance Institute is accelerating the transition towards an environmentally sustainable and resilient economy by catalysing investment in net zero and nature positive outcomes. Uniquely positioned at the nexus of the public and private sectors, the Green Finance Institute is the UK and Europe’s principal forum for innovation in green finance. They partner with financial institutions, corporates, policymakers, academics, philanthropists and civil society experts to develop solutions that will redeploy capital at the pace and scale that science demands. 49 
Carbon4finance https://www.carbon4finance.com Data Provider Global Carbon4Finance offers climate data solutions covering both physical and transition risks, as well as biodiversity footprint. These proprietary methodologies allow financial organizations to measure the carbon and biodiversity footprint of their portfolio, assess the alignment with a 2°C-compatible scenario and measure the impacts that arise from events related to climate change and biodiversity loss. 50 
NGFS (Network for Greening the Financial System) https://www.ngfs.net/en Collaboration Global The Central Banks and Supervisors Network for Greening the Financial System (NGFS) is a group of Central Banks and Supervisors willing, on a voluntary basis, to exchange experiences, share best practices, contribute to the development of environment and climate risk management in the financial sector, and to mobilize mainstream finance to support the transition toward a sustainable economy. Its purpose is to define and promote best practices to be implemented within and outside of the Membership of the NGFS and to conduct or commission analytical work on green finance. 51 
Cambridge Institute for Sustainability Leadership https://www.cisl.cam.ac.uk/ Research Institute UK The Cambridge Institute for Sustainability Leadership is an impact-led institute within the University of Cambridge that activates leadership globally to transform economies for people, nature and climate. Through their global network and hubs in Cambridge, Cape Town and Brussels, they work with leaders and innovators across business, finance and government to accelerate action for a sustainable future. 52 
Finance for Biodiversity https://www.financeforbiodiversity.org/ NGO Global The foundation provides a forum for sharing best practices, gaining knowledge on biodiversity and collaborating together to develop solutions, and collectively taking action towards governments and companies. One single financial institution may not be able to change the current course of nature destruction. However, they believe that, when joining forces in their foundation, financial institutions can redirect financial flows to companies that do not harm the environment or that even support its recovery. They can also engage with companies to make their business models less destructive. 53 
Business for Nature https://www.businessfornature.org/ Collaboration Global Business for Nature is a global coalition bringing together influential organizations and forward-thinking businesses to reverse nature loss and restore the planet's natural systems. By harnessing the power of business, the coalition drives impactful actions and policies to create a sustainable future. 54 
Ceres https://www.ceres.org/ NGO Global Ceres is a nonprofit advocacy organization working to accelerate the transition to a cleaner, more just, and sustainable economy. Ceres makes the business case for action on the greatest sustainability challenges facing our world today: climate change, water scarcity and pollution, and nature and biodiversity loss.
Ceres also co-leads the Secretariat and Corporate Engagement Working Group of Nature Action 100, a global investor-led engagement initiative that aims to support greater corporate ambition and action on reversing nature and biodiversity loss.55 
IUCN (International Union for Conservation of Nature) https://www.iucn.org/our-work/business-finance-and-economics Intergovernmental Organization Global Human wellbeing depends on nature and economic development can no longer come at nature’s expense. IUCN works to help countries mainstream nature into economic decisions, including making the private sector part of the solution for people and nature. 56 
Nature Conservancy - NatureVest https://www.nature.org/en-us/ NGO Global NatureVest is the impact investment unit of The Nature Conservancy, which leverages private capital to advance conservation efforts. NatureVest creates and manages investment opportunities that deliver both financial returns and measurable environmental benefits. 57 
NatureAlpha https://www.naturealpha.ai/ Data Provider Global NatureAlpha provides data and analytics on biodiversity for investors, enabling them to assess and integrate nature-related risks and opportunities into their investment decisions. The organization helps bridge the gap between financial markets and biodiversity conservation. 58 
SouthPole https://www.southpole.com/projects/nature-based-projects Consultancy Global South Pole develops and implements comprehensive emission reduction projects and strategies that turn climate action into long-term business opportunities for companies, governments and organisations around the world.
SouthPole also has its own "Focus NbS" initiative that develops and implements nature-based solutions to address climate change and biodiversity loss. The initiative aims to harness the power of natural ecosystems to deliver sustainable environmental and economic benefits.59 
Vivid Economics (McKinsey) https://www.mckinsey.com/about-us/overview/alliances-and-acquisitions/vivid-economics Consultancy Global Vivid Economics is a leading consultancy that provides economic analysis and advisory services focused on sustainability. The firm helps clients navigate the transition to a low-carbon and nature-positive economy by delivering insights and solutions that drive impactful change. McKinsey acquired Vivid Economics in March 2021. 60 
Biodiversity Credit Alliance https://www.biodiversitycreditalliance.org/ Collaboration Global The Biodiversity Credit Alliance (BCA) exists to provide guidance for the establishment of a credible and scalable market that stands up to the scrutiny of multiple stakeholders. Key among them are Indigenous Peoples and Local Communities at the frontline of the biodiversity crisis. Together they are working to ensure strong foundations and principles exist and can be applied by all market participants going forward. 61 
UNCTAD (UN Trade and Development) https://unctad.org/ Intergovernmental Organization Global UNCTAD supports developing countries to access the benefits of a globalized economy more fairly and effectively. It helps equip them to deal with the potential drawbacks of greater economic integration. To do this, UNCTAD provides analysis, facilitate consensus-building, and offer technical assistance. This helps the developing countries to use trade, investment, finance, and technology as vehicles for inclusive and sustainable development. 62 
Innovate4Nature https://i4n.ch/ NGO Switzerland Innovate4Nature's approach involves creating and incentivising a diverse portfolio of nature-positive solutions, building relationships between nature-positive solutions and strategic partners, embedding solutions in an ecosystem bolstered by their network, and providing thought leadership to inform and inspire the uptake of nature-positive solutions. The vision of I4N is to achieve a nature positive future where business thrive, ecosystems flourish and our planet is regenerated for generations to come. 63 
E4S (Enterprise4Society) https://e4s.center/ Research Institute Switzerland The E4S Center is the laboratory where its founding institutions jointly explore new ways of fulfilling their mission in the fields of economics and management, previewing and experimenting new developments in training, research and outreach in these disciplines.
E4S lays claim to the following values: scientific excellence, an alliance between management and technology, a focus on major societal challenges, particularly with regard to the environment, the need for democratic acceptance of economic and scientific innovations, the social responsibility of companies and entrepreneurs, and the requirements of ethical management.65 WWF (World Wildlife Fund) https://www.worldwildlife.org/ NGO Global WWF works to help local communities conserve the natural resources they depend upon; transform markets and policies toward sustainability; and protect and restore species and their habitats. Their efforts ensure that the value of nature is reflected in decision-making from a local to a global scale.
WWF connects cutting-edge conservation science with the collective power of our partners in the field, more than one million supporters in the United States and five million globally, as well as partnerships with communities, companies, and governments.66 
Matter https://www.thisismatter.com/ Data Provider Global Matter is a sustainability data and analytics provider. Matter has expanded its data offering to cover nature-related requirements for asset owners and managers. The data solution enables investors to quantify the degree to which their portfolios are exposed to nature-related criteria, analysing revenue streams coming from companies’ products and services. The tool’s features include layered analysis from asset to portfolio level, and access to granular insights based on rule-based methodologies aligned with reporting requirements. The solution builds on Matter’s data offering, encompassing key metrics and actionable insights on multiple ESG themes – including the climate transition. 67 
REDD+ https://www.un-redd.org/about/about-redd#:~:text=REDD%2B%20is%20a%20climate%20change,enhancement%20of%20forest%20carbon%20stocks. Intergovernmental Organization Global REDD+ is a climate change mitigation solution developed by Parties to the United Nations Framework Convention on Climate Change (UNFCCC).
REDD+ goes beyond simply deforestation and forest degradation and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks.
The framework is commonly referred to as the Warsaw Framework for REDD+ (WFR) adopted at COP 19 in Warsaw, December 2013 and provides the complete methodological and financing guidance for the implementation of REDD+ activities. REDD+ is also recognized in Article 5 of the Paris Agreement.68 
UNFCCC (United Nations Framework Convention on Climate Change) https://unfccc.int/ Intergovernmental Organization Global The UNFCCC secretariat is the United Nations entity tasked with supporting the global response to the threat of climate change. The Convention has near universal membership (198 Parties) and is the parent treaty of the 2015 Paris Agreement. The main aim of the Paris Agreement is to keep the global average temperature rise this century as close as possible to 1.5 degrees Celsius above pre-industrial levels. 69 
BIOFIN https://www.biofin.org/ Collaboration Global BIOFIN was initiated ten years ago at the CBD COP 11, by UNDP and the European Commission, in response to the urgent global need to divert more finance from all possible sources towards global and national biodiversity goals.
Now present in 40 countries, BIOFIN is working with governments, civil-society, vulnerable communities, and the private sector to catalyse investments in nature. - TAKE ACTION
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Opportunities for Investors
Source: UNPRI
Align investments with nature conservation and restoration.
Investors should adopt policies that follow the Kunming-Montreal Global Biodiversity Framework, managing risks and seizing opportunities for positive impacts on nature.
Promote sustainable corporate practices through active ownership.
Investors can drive transformative change by ensuring investees disclose nature-related risks, adopt corporate practices to halt biodiversity loss, and align with global sustainability goals.
Advocate for nature-friendly policies.
Public policies should align with the Kunming-Montreal Global Biodiversity Framework, removing harmful instruments like agricultural and fishery subsidies. Investors have power as key economic players and therefore can play a role in shaping policy reform by engaging with governments, UN entities, and global standards.
Opportunities for Companies
Source: PwC
Measure your nature baseline.
To effectively measure nature baseline performance, or the extent of nature dependency and impacts, start by establishing your baseline using tools like IBAT, the ENCORE database, and the Aqueduct water-risk tools.
Identify risks, dependencies, and opportunities.
Once the baseline is determined, translate dependencies into potential risks and opportunities, envisioning scenarios where ecosystem failures could disrupt business operations or finding better nature management practices that can save costs and improve efficiencies.
Set ambitions and targets.
Once nature dependencies and impacts have been identified, companies should consider setting targets for improvement. Frameworks like the Science Based Targets Network (SBTN) offer structured approaches ranging from minimizing harm to achieving net positive impacts on biodiversity across the value chain.