Nature in Green Finance

Financial institutions (FIs) do not take into account nature-related dependencies, risks, and opportunities in their financial decision-making, according to "Nature in Green Finance," a recently published report by CDP.

The report, which identifies important gaps in the way financial institutions monitor, implement, manage and measure nature-related impact compared to climate change, urges that action must first start with system-wide recognition of the intrinsic link between climate impacts and impacts on nature.

The CDP concludes that success in building a green and resilient financial system requires leadership and action by financial institutions based on credible and comprehensive data.

FACTS OF INTEREST

• Most financial institutions systematically overlook nature in financial decision-making, despite intensifying climate considerations.
• Gaps in nature information are reported in the governance, strategy and implementation, risk management, and metrics and target mechanisms of most financial institutions.
• Financial institutions identify greater opportunities than risks in climate, forests, and water, with climate and natural opportunities identified and reported, estimated at more than $5 trillion, mostly untapped.
• Increasing data on combined climate and nature-related opportunities enhances green finance solutions to help companies mitigate deforestation and water loss.
• Financial institutions must increase their accountability to demand credible and comprehensive data that drives transformative change across the financial system