Large European banks’ dependency on – and exposure to – ecosystem services shows that considerable value is at risk

This study suggests that the risks associated with deforestation or pollution can later translate into financial risks for banks. It states that banks that invest in projects potentially affected by dependencies and risks related to ecosystem services are more exposed to a higher probability of default, a decrease in the value of assets, and an increase in the value at risk associated with nature, a metric used to measure the potential losses that a bank may incur due to adverse changes in ecosystem services.