Sebastian Pichler, Unsplash

Cutting-edge biodiversity module enables banks and investors to transition agriculture and mining sectors towards nature-positive outcomes

26 May 2021

In a critical decade for climate and nature, banks and investors can now explore their portfolio’s impact on species extinction risk and ecological integrity, and take immediate action to reverse biodiversity loss.

  • New UN-backed ENCORE biodiversity module has been launched, enabling financial institutions to explore to what extent their financial portfolio indirectly drives species extinction risk and impacts ecological integrity.
  • Focused on the mining and agriculture sectors which are particularly exposed to biodiversity risks, the tool includes guidance for engagement, enabling financial institutions to take immediate action to transition these sectors towards a nature-positive future.
  • Analysis using the new module suggests that:
    • Over 40% of mining activity globally occurs in ecoregions with strong declining trends in ecological integrity.
    • 50% of the mining sector’s potential for reducing species extinction risk lies with just over 2% of mines globally. Ambitious biodiversity management within these locations is crucial for avoiding species extinctions.
    • Over 60% of the global potential for reducing species extinction risk across all land area falls within cropland.
  • The module allows financial institutions to identify pathways to increase positive impacts within agricultural and mining portfolios, as well as transition mining portfolios to a low energy future.
  • Over 30 financial institutions have taken a pioneering role in the development and testing of the module (full list in ‘notes to editor’).

Geneva, 26 May 2021: New ENCORE biodiversity module launched today by the Natural Capital Finance Alliance a collaboration between the UN Environment Programme World Conservation Monitoring Centre, the UN Environment Programme Finance Initiative and Global Canopy, enables banks and investors to analyse the potential impact of their financing and investment activities in agriculture and mining on biodiversity loss, in particular species extinction and the loss of ecological integrity.

Financial institutions face escalating risks from nature loss. US$44 trillion of economic value generation, over 50% of global GDP, is moderately or highly dependent on nature and its services, but the world’s ecosystems have declined by 47% globally on average compared to their earliest estimated states, with 1 million species at risk of extinction. This creates material risks and opportunities for banks, asset owners and asset managers, as they invest in and lend to companies facing increasing physical, market, regulatory and reputational threats associated with biodiversity loss.

Biodiversity loss is fast rising up the global policy agenda with an ambitious post-2020 global biodiversity framework expected to be agreed by governments in Kunming in October 2021. Momentum is building and leading financial institutions are increasingly taking biodiversity into account, seeking ways to align financial flows to global biodiversity goals. Over 30 financial institutions took a pioneering role participating in the development of the ENCORE biodiversity module.

The new module lies at the cutting-edge of sustainable finance, allowing financial institutions to take immediate action, activate stakeholder engagement, and transition their portfolios towards a nature-positive future. Banks and investors can use the module to map their current exposure, and explore future scenarios, identifying potential pathways to increase positive impacts within agricultural and mining portfolios, as well as transition mining portfolios to a low energy future. The module provides guidance on company engagement, enabling financial institutions to work with stakeholders in high-priority areas to adapt production practices with the aim of making them nature-positive.

The ENCORE biodiversity module is an extension of the free-to-use, online ENCORE tool (‘Exploring Natural Capital Opportunities, Risks and Exposure’) which assists the finance sector in visualising the links between the economy and nature. ENCORE allows banks, investors and insurers to identify nature-related risks, opportunities and exposure in their activities by setting out how each industry and sub-industry depends and impacts on nature. The ENCORE tool and biodiversity module are available by signing up here.

Media Contact: Miranda Barham | [email protected] | +44 (0)7899 030304

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