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Bundesamt für Naturschutz

Biodiversity and finance: Managing the double materiality

Economic activities are at the heart of biodiversity loss. At the same time, most economic sectors are heavily dependent on ecosystem services. Nature's degradation is challenging the integrity of the biosphere, ultimately endangering human survival, and also representing a significant threat to the financial system's stability. Understanding and managing biodiversity-related physical and transition risks will enable financial institutions to avoid losses and reputational damage. Furthermore, understanding the complexities of biodiversity and ecosystems may also enable financial market actors to take advantage of rising business opportunities that are nature-positive.

Description

Regulation touching upon biodiversity and ecosystems already in place or being planned may only push firms to comply rather than instiating the dynamic needed to transform the economy to operate within the planetary boundaries. Moving beyond compliance is essential if financial institutionare to comprehensively manage risks and play a role in efectiely restoring and protecting biodiversity and ecosystems.

This paper will present a series of recommendationsfor financal institutionso "go beyond regulation" and transform how they think about and act on biodiversity – based on scientifievidence and reflectin the vision for a full recovery of nature by 2050.

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