Greening finance for nature: Nature-related risk and impact

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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

  • 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, through the NERC-funded Integrating Nature-Climate Scenarios & Analytics for Financial Decision-Making (INCAF) project
  • 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.

Report

The green scorpion: the macro-criticality of nature for finance

Dr Nicola Ranger, Dr Jimena Alvarez, Dr Anna Freeman, Dr Thomas Harwood, Prof Michael Obersteiner, Estelle Paulus, Juan Sabuco

Resilience & development
December 2023

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.

Estelle Paulus
DPhil student
Emma O'Donnell
DPhil student