The Natural Capital Finance Alliance (NCFA), together with the Natural Capital Coalition and VBDO, has launched a groundbreaking guide to help financial institutions understand and assess their reliance on natural capital — i.e. the clean air, oceans, ecosystems and minerals that most of our goods and services depend on.
Connecting Finance and Natural Capital: A Supplement to the Natural Capital Protocol was launched at an event hosted by ICAEW in London on October 12.
“But the report also concludes that a 1.5° world is possible if we act quickly and undertake rapid and far-reaching transitions in energy, land, urban, infrastructure and industrial systems. The implications of this for financial institutions are monumental, with entire industries needing to change business models and rethink their relationship with natural capital.
“The supplement is an important step to helping financial institutions start the journey of measuring and valuing natural capital risks and opportunities.”
Today’s guidance is the first of two major launches this year to help financial institutions understand natural capital risk. In November, NCFA will launch its Natural Capital Explorer —the world's first comprehensive knowledge base and tool enabling banks, asset managers and insurers to screen their portfolios for natural capital risks. The tool will deliver a simple 'heat map' to financial institutions, detailing how companies they lend to or invest in — across 167 business sectors — depend on nature to enable their production processes, what the associated risks may be, and the data that can be used to qualify and quantify risk exposure at a global and national level.