New analysis led by the Green Finance Institute aims to estimate the scale of nature-related financial risks to the UK economy for the first time.
The analysis was supported by the Department for Environment, Food and Rural Affairs (Defra) and the Bank of England, alongside the UN Environment Programme World Conservation Monitoring Centre and the Universities of Oxford and Reading.
In a report to be published later this year, the Green Finance Institute says its “first-of-its-kind” analysis will reveal the materiality of nature-related financial risks and the potential financial impact of biodiversity loss and ecosystem degradation on UK business and financial institutions.
This builds on work carried out by the Banque de France and De Nederlandsche Bank to understand and quantify their portfolio exposure to nature degradation.
When the costs of neglecting nature are revealed through this analysis, we will be able to see for the first time, the impact this will have on the UK economy.
The Green Finance Institute says the analysis builds on the UK government’s support for the Taskforce on Nature-related Financial Disclosures (TNFD).
The TNFD is developing a nature-related risk management and disclosure framework, launching in September, which aims to enable organisations around the world to report and act on evolving nature-related risks in a “credible, clear and consistent” way.
The Green Finance Institute continues that these new insights will add to the growing recognition that a reallocation of capital to nature-positive investment is needed to support a sustainable economy.
Dr Rhian Mari-Thomas OBE, CEO of the Green Finance Institute, said: “When the costs of neglecting nature are revealed through this analysis, we will be able to see for the first time, the impact this will have on the UK economy, making it clear that conserving and enhancing the natural environment is the only intellectually coherent path to growth.”
