Loss of biodiversity and ecosystems poses risks for financial institutions

Biodiversity and intact ecosystems are necessary prerequisites and beacons of hope for climate protection - this was repeatedly emphasized at last year's UN climate conferences. However, the loss of biodiversity is currently progressing at a rapid pace, which not only has an impact on our planet and human livelihoods, but also on the global economy.

The statement in the Global Risk Report 2024 from the World Economic Forum is unequivocal: the risk of biodiversity loss and the collapse of ecosystems will increase sharply and continuously over the next few years and will be one of the three most dangerous risks for the global economy by 2034 - including for banks and other financial organizations.

Driven by these developments, political measures for nature conservation are increasing. It is to be expected that the corresponding regulatory requirements for companies and financial institutions will continue to increase. In November and December 2023 alone, the ECB published two publications on the topic of biodiversity, which outline approaches and methods for measuring and operationalizing biodiversity risks.

In order to be able to assess risk exposure as accurately as possible, the disclosure of biodiversity-related information and raw data by the bank's individual customers will be an essential prerequisite in future. In addition to their direct operations, banks will also be required to include supply chains in their risk assessment.

Our white paper on assessing biodiversity and ecosystem loss risks for financial institutions analyzes the current market situation and provides an overview of the increasing regulatory requirements, including from the European Central Bank and the European Banking Authority (EBA). We also present our comprehensive range of solutions and advisory services to help financial institutions understand, measure and integrate biodiversity risks into their risk management.

Download our white paper now to learn how to assess and manage biodiversity risk.