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Banks back tool to help portfolios correct extinction risk

Banks back tool to help portfolios correct extinction risk

A UN-backed biodiversity module has been launched to help financial institutions explore the extent to which their portfolios indirectly drives species extinction risk and impact ecological integrity.

Part of the free Encore (Exploring Natural Capital Opportunities, Risks and Exposure) tool, the biodiversity module has been launched by the Natural Capital Finance Alliance with UN backing.

The module enables banks and investors to analyse the potential impact of their financing and investment activities in agriculture and mining on biodiversity loss.

With over 50% of global GDP moderately or highly dependent on nature and its services, the FS industry is increasingly taking biodiversity into account, with over 30 FI firms - including Barclays, Citi and UBS - participating in the development of the new module.

Banks and investors can use the module to map their current exposure, and explore future scenarios, identifying potential pathways to increase positive impacts within agricultural and mining portfolios, as well as transition mining portfolios to a low energy future.

The module also provides guidance on company engagement, enabling financial institutions to work with stakeholders in high-priority areas to adapt production practices with the aim of making them nature-positive.

Eric Usher, head, UN environment programme finance initiative, says: "The Encore biodiversity module lies at the cutting edge of sustainable finance, allowing financial institutions to take material action to pivot the real economy towards a nature-positive future."

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