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Financial sector publishes report on combating deforestation
As a financial institution, how do you assess whether you are financing deforestation? What financial risks do you face as a result? And how can you limit your impact on deforestation? In a report published by the Biodiversity working group of the Sustainable Finance Platform, eight financial institutions provide answers to these questions.
The report provides an overview of available services and tools that financial institutions can use to identify, analyse and combat deforestation related to their financial activities. As well as an action plan, the report sets out several best practices from the Dutch financial sector.
Deforestation is a major problem for the environment, societies and economies. The destruction of forests worldwide is an important indicator of biodiversity loss, and has direct and indirect negative implications for natural habitats, local communities, supply chains and consumers. There is also a strong link between deforestation and climate change. Trees remove CO2 from the atmosphere. As CO2 is released when trees are burned, deforestation contributes to climate change.
Financial institutions contribute to deforestation if they invest directly or indirectly in companies that are responsible for deforestation. At the same time, such investments also create financial risks for financial institutions. For example, the profitability of companies may be affected by new legislation or regulations on deforestation, or consumer preferences may change as awareness of deforestation increases.
Financial institutions can mitigate these risks, and are already doing so, by for example setting up funds for ecologically responsible agriculture, setting targets to reduce deforestation, and integrating deforestation monitoring into their primary processes.
Financial institutions can use the report to get acquainted with this theme, or if they are already actively engaged - for further inspiration and deeper engagement.
About the Biodiversity Working Group
There is growing awareness, as is the case with climate change, that rapid action must be taken to curb the loss of biodiversity. In order to address the importance of biodiversity for financial institutions, Actiam, APG, ASN Bank, a.s.r., FMO, Rabobank, Robeco and NWB Bank together with the Dutch Ministry of Nature and Food Quality and the Erasmus Platform for Sustainable Value Creation set up a working group under the auspices of the Sustainable Finance Platform. The working group is headed by Lidwin van Velden, chair of the Management Board of NWB Bank.
In June this year, the working group published a report outlining the relationship between biodiversity and the financial sector. In this report, the working group members contributions include concrete examples of how they have integrated biodiversity into their organisation and activities.
About the Sustainable Finance Platform
The Sustainable Finance Platform is a cooperative venture of the Dutch Association of Insurers, the Federation of the Dutch Pension Funds, the Dutch Fund and Asset Management Association, the Dutch Banking Association, the Dutch Ministry of Finance, the Dutch Ministry of Economic Affairs and Climate Policy, Invest-NL, the Sustainable Finance Lab, the Dutch Authority for the Financial Markets and De Nederlandsche Bank. The aim of this platform, set up by DNB in 2016, is to promote and raise awareness for sustainable funding in the financial sector. Twice a year, the Platform members meet to discuss the new and ongoing sustainability initiatives in the Dutch financial sector. The Platform's working groups also concentrate on various themes.