In recent times, the awareness and understanding of biodiversity within the banking and financial sectors have undergone a significant transformation. There is a growing recognition of the importance of addressing environmental issues, particularly in the wake of heightened interest in these topics.
During a discussion with FinextraTV after a recent COP15 event, Jessica Smith, nature lead at UNEP Fi, noted the remarkable increase in engagement from the financial community. “Despite the COP’s location in Cali, which presented accessibility challenges relative to Montreal, we experienced a noteworthy turnout from the finance sector, with around 5,000 participants from both the green and blue zones,” she remarked.
Although discussions surrounding ESG may not be as prominent as they once were, topics like ethical finance and biodiversity continue to hold relevance for many industry professionals. Alongside measurable efforts such as investments in regenerative practices, conservation, and ecosystem restoration, Smith highlighted critical areas that remain overlooked.
She pointed out, “The larger challenge centers around Goal D, which assesses the alignment of financial activities with the objective of halting and reversing biodiversity loss. Alarmingly, we still observe a disparity with approximately 140 times more detrimental finance compared to beneficial initiatives. A pressing concern is the need to exclude deforestation from investment portfolios, as it appears there are numerous straightforward actions we have yet to take.”
The ramifications of overlooking these ‘low-hanging fruit’ and maintaining harmful financial practices could severely hinder the industry’s potential for positive change and regulatory enhancement. Smith emphasized the growing urgency for financial institutions to act swiftly in their responses: “Ultimately, it’s about risk management for these organizations. Society will not tolerate a lack of transparency regarding supply chains or their inability to obtain data. We’ve heard these justifications for far too long; tangible action is necessary to address areas where our efforts in achieving net-zero are undermined by financing practices that harm intact ecosystems. The Amazon is perilously close to reaching a tipping point, making the need for harm avoidance a top priority.”
Smith’s emphatic statement resonates with concerns voiced by biodiversity specialists and climate advocates alike. Her insights and calls for action provoke an essential question for those capable of effecting change: If the opportunity exists, why delay?