[P2P-F] Fwd: PRESS RELEASE-Finance for Biodiversity - Aligning Development Finance with Nature's Needs: Protecting Nature's Development Dividend

Tue Nov 10 03:13:47 CET 2020

---------- Forwarded message ---------
From: Hazel Henderson <hazel.henderson at ethicalmarkets.com>
Date: Tue, Nov 10, 2020 at 3:52 AM
Subject: PRESS RELEASE-Finance for Biodiversity - Aligning Development
Finance with Nature's Needs: Protecting Nature's Development Dividend
To: Larae Long <larae.long at ethicalmarkets.com>

Dear Esteemed Global Advisory Board and Judges Panel,

Informational material below with PDF attached:

*IMMEDIATE RELEASE: 00.01 GMT Monday Nov. 9*

*World’s development banks endangering vulnerable ecosystems worth US$1.1
trillion/year*

LONDON, Nov. 9 (F4B) – Development finance institutions (DFIs) worldwide
are endangering nature worth an estimated US$1.1 trillion annually, and
more than a quarter of their total US$11.2 trillion loan book is highly
dependent on vulnerable ecosystems, found a study by Finance for
Biodiversity (F4B), published on Wednesday.

Globally, there are more than 450 development finance institutions (DFIs),
which invest about US$2 trillion annually. Almost all are accountable to
one or several governments, and ultimately to their citizens, and their
core purpose is to facilitate sustainable development.

Sustainable development is inextricably linked to nature, because of the
benefits that nature provides for businesses, including sustaining the
quantity and quality of air, water and soils, regulating the climate,
providing pollination and pest control, and reducing the impact of natural
hazards such as storms and floods. Biodiversity is declining at an
unprecedented rate, however, and the drivers of these losses are
intensifying.

Wednesday’s report, “Aligning Development Finance with Nature’s Needs:
Protecting Nature’s Development Dividend”, found that DFIs are endangering
nature with an expected value of US$1.1 trillion annually. This is the
first analysis to date to place a monetary value on a financial
institution’s potential impact on nature.

In addition, the report found that DFIs are exposing themselves to
extraordinary risks by failing to account for their dependence on declining
biodiversity, a “dependency risk” estimated at US$3.1 trillion.

These dependencies and nature impacts are two sides of the same coin – one
firm’s damage to nature can lead to financial loss for another dependent on
that nature. This feedback loop shows why these biodiversity-related risks
are important leading indicators of material financial risk, and why
immediate action is needed to address the issue.

DFIs are holding their first ever global conference on November 11-12, at
the Finance in Commons Summit, convened by French President Emanuel Macron,
in what should be a key moment to assess how the global DFI community is
performing.

“The world’s government-owned banks are meant to be at the leading edge of
development finance practice, a symbol of progressive lending practices for
the world’s private investors,” said Simon Zadek, chair of F4B, which
produced the report.

“But mostly their investments are dependent on precious, vulnerable
biodiversity resources, and too often place these resources further at
risk. F4B’s calculations point to the urgent need for DFIs to commit to
lending practices that deliver positive nature gains.”

Wednesday’s report recommended that all DFIs commit, and undertake within
the next year, to publish a balance sheet-wide stress test of
nature-related financial risks and impacts, and so catalyse similar action
by private financial institutions and generate wider sustainable
development benefits.

Dependency risk refers to the extent that the financing activities of DFIs
are highly dependent on nature which is already vulnerable. Almost all
businesses in some way depend upon benefits from nature. For example,
fishers rely on healthy stocks of fish, and many farmers on wild
pollinating insects. If these ecosystem services are already vulnerable and
declining, businesses are more at risk.

The F4B report applied an assessment of nature dependency by economic
sector, where agriculture and forestry score highly, for example. It
combined this with country risk scores, according to biodiversity
abundance, the strength of local environmental laws, and national resource
intensity, to calculate a dollar risk value.

DFIs are also putting nature at risk, for example by driving deforestation,
and in doing so, are exposing themselves to tighter environmental laws, or
to litigation and reputation harm. To estimate the risk DFIs pose to
nature, F4B estimated the land and water footprint associated with DFI
financing, and valued the resulting expected damage to biodiversity and
ecosystem services, if not effectively mitigated.

The report found that, by region, Asia had the highest dependency risk,
reflecting the vulnerability of its remaining, high-value biodiversity, and
the relatively larger DFI exposure to this region. Asia also placed the
most nature at risk, reflecting the large water footprint of lending in the
region. Among sectors, the report found agriculture put most nature at
risk, as a key driver of land use change including deforestation, while
energy and water utilities scored the highest dependency risk, reflecting
their high reliance on reliable freshwater.

*CHART. Collective DFI balance sheet, dependency risk and nature at
risk*[image:
Diagram Description automatically generated]

*Media contact*

Gerard Wynn (press at f4b-initiative.net)

*About Finance for Biodiversity*

Finance for Biodiversity (F4B) aims to increase the materiality of
biodiversity in financial decision-making, and so better align global
finance with nature conservation and restoration. F4B is advancing five
workstreams that create and amplify the feedback signals that increase the
value of biodiversity in private and public financing decisions:

   - Market efficiency and innovation
   - Biodiversity-related liability
   - Bridging biodiversity policy and financial rules and behaviour
   - Citizen engagement and public campaigns

·         Responses to the COVID crisis

For more information, visit www.f4b-initiative.net.

Hazel

-- 
P2P Foundation: http://wiki.p2pfoundation.net <http://p2pfoundation.net>  -
http://blog.p2pfoundation.net

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