For many investors, biodiversity and ecosystem services are an important part of understanding and analyzing risks and opportunities. The World Economic Forum’s Global Risk Framework 2018, based on a survey of nearly 1000 thought leaders in business, government and civil society, shows that biodiversity loss and ecosystem collapse is recognized to be among the top ten major global economic risks.
The World Bank and International Finance Corporation, other multilateral and bilateral development banks, commercial banks, asset managers, and a range of other financial institutions periodically review their policies and engagement on social and environmental issues.
Many of them have standards and procedures related to biodiversity. For instance, the 94 financial institutions from 37 countries that are members of the Equator Principles Association have performance standards that subject project finance to conditions of ‘No Net Loss of biodiversity’ (for impacts on natural habitats) and ‘Net Gain of biodiversity’ (for impacts on critical habitat). Other financial institutions are developing tools and approaches so they can work towards a net gain of biodiversity across their entire investment portfolios.
- How to consider Biodiversity Net Gain (or a similar goal) for financial institutions, through investment strategy and engagement? This issue forms part of the Business Roadmap.