At the Launch Event of the NGFS Conceptual Framework on Nature-related Financial Risk Klaas Knot called for urgent action to assess and reduce the risks the nature crisis poses to the economy and the financial system.Read more
Biodiversity Working Group
Biodiversity loss and deforestation require rapid action, including from the financial sector. The financial sector could step up investments in the conservation and restoration of biodiversity. Eight Dutch financial institutions have joined forces in the Biodiversity Working Group, which shares its plans and best practices.
Biodiversity loss results in huge economic damage
Biodiversity is declining rapidly worldwide. If we do not take action now, up to one million species could disappear. Many economic sectors depend directly or indirectly on the world's diversity of plants, animals and insects. This is why biodiversity loss leads to huge costs, of between €1.7 trillion and €3.9 trillion each year. It is therefore crucial for future generations that we do our utmost to conserve and restore biodiversity.
Causes of biodiversity loss
In recent years, biodiversity has been declining dramatically, mainly due to human activities such as land use changes leading to deforestation, intensive monoculture and urbanisation. Other causes are climate change and environmental pollution. Combined, they mean that ever fewer plant and animal species can survive on earth.
Investing in biodiversity
There is growing awareness across the Dutch financial sector that rapid action must be taken to conserve and restore biodiversity. This requires major investments. According to the Sustainable Finance Platform's Working Group on Biodiversity, it is up to financial institutions to take the lead here. This working group shares plans and good practices in its paper entitled Biodiversity; Opportunities & Risks for the Financial Sector. One of its plans is for financial institutions to make their impact on biodiversity measurable and develop new investment models that take account of biodiversity.
Financial institutions accelerate deforestation if they invest in corporations that engage in such practices. At the same time, such investments also expose them to financial risks. A growing number of financial institutions are committing themselves to forest conservation. The working group's Deforestation Guideline Document offers practical tools to combat deforestation and mitigate risks, such as setting up funds for ecologically responsible agriculture.
Roadmap for the protection of biodiversity
The Working Group on Biodiversity of the Sustainable Finance Platform has developed a roadmap to help financial institutions counter biodiversity loss. It provides guidance for all financial institutions, from absolute beginners to the the very advanced.
Financing regenerative agriculture
Intensive agriculture is a primary driver of biodiversity loss. A good alternative is regenerative agriculture, which is a radically different way of growing crops that contributes to the preservation or restoration of biodiversity. The Working Group on Biodiversity has studied impediments to financing regenerative agriculture and looked into solutions already available. It produced a new framework that will better enable financial institutions to finance regenerative agriculture. This can be done by removing the barriers so that the financial sector can contribute to the preservation of biodiversity. The study was undertaken together with the Erasmus Platform for Sustainable Value Creation. Read more
About the working group
The Working Group on Biodiversity consists of eight financial institutions and two other organisations. Its members are Actiam, APG, ASN Bank, a.s.r., FMO, ING, van Lanschot Kempen, NWB Bank, Rabobank, Robeco, the Dutch Ministry of Agriculture, Nature and Food Quality, and the Erasmus Platform for Sustainable Value Creation. It is headed by Lidwin van Velden, chair of NWB Bank's Executive Committee.
Biodiversity basics for professionals of financial institutions
Financing Regenerative Agriculture
Guide: From Pledges To Action (2021)
Paper: A Guideline on the use of Deforestation Risk Mitigation Solutions for Financial Institutions
Paper: Biodiversity Opportunities and Risks for the Financial Sector (2020)
Infographic: biodiversity, opportunities and risks for the financial sector (2020)
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