A new biodiversity module, supported by the United Nations, has been introduced to assist financial institutions in assessing how their portfolios contribute to species extinction risks and affect ecological integrity.
This module is part of the Encore (Exploring Natural Capital Opportunities, Risks, and Exposure) tool, developed by the Natural Capital Finance Alliance. It empowers banks and investors to evaluate the implications of their financing and investment activities in sectors like agriculture and mining on biodiversity.
With over 50% of the global GDP significantly reliant on nature and its services, the financial services industry is increasingly recognizing the importance of biodiversity. More than 30 financial institutions, including Barclays, Citi, and UBS, have actively participated in the module’s creation.
The biodiversity module allows banks and investors to assess their current exposure while exploring future scenarios. It identifies pathways to enhance positive impacts within agricultural and mining investments and guides the transition of mining portfolios toward a low-energy future. Additionally, it offers strategies for engaging with companies, enabling financial institutions to collaborate with stakeholders in critical areas to adapt production methods for a nature-positive approach.
Eric Usher, head of the UN Environment Programme Finance Initiative, stated, “The Encore biodiversity module represents a pioneering effort in sustainable finance, equipping financial institutions to implement tangible actions that steer the real economy toward a nature-positive future.”