Financial institutions need to pay more attention to biodiversity loss, especially as they prepare for a post-pandemic economic recovery, according to a report released Tuesday by the Natural Capital Finance Alliance, a collaboration between the United Nations Environment Program Finance Initiative and Global Canopy, a non-profit organization working toward a global deforestation-free economy.
The report offers a guide for setting biodiversity targets and implementing them through investments in ecosystem restoration, biodiversity conservation and sustainable use of natural resources.
"The emergence of COVID-19 has underscored the fact that, when we destroy biodiversity, we put our lives, livelihoods and economies at risk," said Eric Usher, head of UNEP FI, in a statement. "This report provides a pathway for financial institutions to build back better and contribute to halting and reversing the biodiversity crisis, enabling them to bring their assets and decision-making in line with global policy developments."
Biodiversity underpins all economic activities "and is experiencing dangerous and unprecedented declines due to the current model of economic development," said the report, “Beyond 'Business as Usual': Biodiversity Targets and Finance.” Globally, ecosystems have declined 47% in size and condition compared with estimated baselines, and continued degradation could cost an estimated $479 billion each year.
Part of the report is based on the online ENCORE tool — Exploring Natural Capital Opportunities, Risks and Exposure. Later this year, the organizations will release a new ENCORE biodiversity module developed with 27 financial institutions that will enable banks, insurers and investors to assess how their portfolios align with global biodiversity goals.
