We work with financial institutions, Central Banks and regulators to develop data, scenarios and tools to map the two-way relationships between nature, the economy and finance and help embed nature within risk management and investment decisions.
More than half of global gross domestic product is dependent on nature, yet the past decades have seen unprecedented biodiversity declines due to human activities. Financial institutions (FIs) play an important role in securing a nature-positive future; decisions by FIs over capital allocation and risk pricing influence structural shifts in the real economy that have profound and irreversible impacts on nature.
We work with policy makers, financial institutions, Central Banks and regulators to develop data, metrics, scenarios and tools to map the interrelationships between nature, the economy and finance, help embed nature within risk management and investment decisions, and explore new innovative mechanisms to mobilise finance for nature in emerging and developing economies.
Our work
- Leading the Greening Finance for Nature Initiative of the UK Integrating Finance and Biodiversity Programme.
- Better understanding the dependencies and impacts between nature, economy and finance and developing metrics and tools to quantify risks and impacts.
- Working with financial institutions to develop analytics and scenarios for nature-related risks and impacts, including working with the Network for Greening the Financial System (NGFS) Nature Task force to develop foundations for scenario-based analysis of complex and cascading physical nature-related financial risks.
- Assessing nature-related risks and opportunities in the UK with the Green Finance Institute, the University of Reading, NIESR and UNEP-WCMC.
- Building understanding of effective financing modalities for nature in emerging and developing economies, with partnerships including the Global Center for Adaptation.
Reports
The green scorpion: the macro-criticality of nature for finance
New study reveals in excess of 5 Trillion USD in nature-related risks to the global economy that will amplify the impacts of climate change. Shocks to the global economy related to biodiversity loss and ecosystem damage could cost upwards of five trillion USD. Human activities, such as pollution, deforestation, land-use change and overextraction, are fundamentally eroding the natural capital upon which are societies and economies are built – including our water, clean air, fertile soils and pollinators – and act as ‘risk amplifiers’ on the impacts of climate change. Study by the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) and the Environmental Change Institute at the University of Oxford.
Assessing the Materiality of Nature-Related Financial Risks for the UK
The deterioration of the UK’s natural environment could lead to an estimated 12% loss to GDP, according to new analysis. In comparison, the financial crisis of 2008 took around 5% off the value of the UK GDP, while the Covid-19 pandemic cost the UK up to 11% of its GDP in 2020. The UK is one of the most nature-depleted countries in the world – three quarters of the UK has a high level of ecosystem degradation, with risks to financial services and the wider economy as a result. The analysis shows however, that half of the UK’s nature-related financial risks originate overseas. Within the analysis, a new inventory charts these domestic and international nature-related risks to the economy, many of which are not currently captured in national risk assessments. The inventory captures financial risks arising from the deterioration of nature and biodiversity, including: soil health decline; water shortages; global food security repercussions; zoonotic diseases that pass from animals to humans, like bird flu, swine flu, and Covid-19; and antimicrobial resistance, where bacteria and viruses no longer respond to medicines; as well as transition and litigation risks.
People
