How can financial services protect and restore biodiversity
Exploring the pivotal role of financial services in helping to solve the biodiversity crisis.
Nature is our most precious asset, underpinning human livelihoods, prosperity and wellbeing. Our global society rests on the ecosystem services provided by nature – air, food, water and other natural resources – and biodiversity plays a critical role in delivering these services.
Financial institutions depend on and impact biodiversity through their operational activities, supply chains, financing and investment decisions. They are uniquely placed in their financing, investing, and underwriting role to be a driver for good and to safeguard, restore and protect the natural world for decades to come.
This paper explores the risks and opportunities facing the financial services sector, outlines industry initiatives and frameworks, and offers tangible steps that businesses can take now to accelerate positive change.
Our EY and Microsoft strategic collaboration is grounded in scientific consistency and underpinned by a deep understanding of financial services and sustainability themes. It brings together the right blend of experience and professionalism in this field to help deliver on each of the recommendations presented in this paper. EY teams are proud to have collaborated with Earth Knowledge to produce this content.
The primary contributors for this article are Sandy Trust, UK Sustainable Finance Consulting Lead, Ernst & Young LLP and Katie Henry, UK Sustainable Finance Biodiversity Solution Lead, Ernst & Young LLP.
A perspective from the Luxembourg market
Biodiversity and nature ecosystem services are essential and irreplaceable. However, compared to climate risk awareness and mitigation, the risk of biodiversity loss is still not fully assessed and considered across the financial sector. Biodiversity is highly impacted by operating models, financing and investment decisions and as climate change contains turning points beyond which it may not be possible to recover.
In Luxembourg we see an increasing interest for natural capital fund setups and green bonds issuance, aimed to protect biodiversity and sustainable land-use. It is very important that financial market participants start including nature positive outcomes in their sustainable finance strategies.