Moderator: François Antoine D. Gardin, PhD Researcher, BSoG
Speakers:
- Marianne Haahr, TNFD and Nature Finance lead at Global Canopy
- Sébastien Godinot, WWF European Policy office, Economist
- Arne Klug, Director of Biodiversity research, MSCI
- Jessica Smith, Nature Lead at the United Nations Environment Program - Finance initiative (UNEP FI)
Calls and initiatives for greater integration of nature-related risks and opportunities into the financial system have multiplied over the last decade, reaching new momentum for biodiversity in the wake of COP15. Addressing these risks requires more than direct policy interventions aimed at reducing public subsidies to activities which are harmful for the environment. They also require a rethink of capital allocation decisions, with the aim to minimise the adverse impact of private capital flows into activities that are exposed to the natural environment, whilst supporting investments for a sustainable environmental transition and adaptation which includes the protection and restoration of biodiversity. To that extent, the EU Green Deal and its Sustainable Finance Package explicitly aim at effective capital allocation towards more sustainable activities and meeting the funding gap for financing the transition towards sustainability green activities.
In this context, financial authorities and market participants have started to review their exposure to a wider set of environmental risks, the integration of objective criteria and new risk assessment practices including biodiversity, and to address increasing disclosure requirements. For example, financial institutions must increasingly integrate new regulations aiming at greater disclosure and integration of nature-related risks, such as the Sustainable Finance Disclosure Regulation (SFDR) introduced in the EU in 2019. Complimentarily, some market-led initiatives have emerged, such as the special Taskforce on Nature-related Financial Disclosures (TNFD), which aims to develop a risk management and disclosure framework for organisations to report and act on evolving biodiversity risks.
These initiatives bring to the front the following questions: how can biodiversity risks and opportunities be assessed more coherently and consistently, and are the regulatory and market frameworks effective? Is the nature of these risks sufficiently understood by financial institutions and are the formulated responses adequate? How to best define and develop sustainable investments in terms of protecting and restoring biodiversity? What type of regulatory and market incentives to have biodiversity better integrated by the financial sector?
