From Awareness to Action: Sector-Based Biodiversity Risk in Investments
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Biodiversity underpins the resilience of global markets, yet its decline is accelerating, driven by land-use change, overexploitation and pollution. Companies depend on healthy ecosystems for water, fertile soil and pollination, but many simultaneously erode these services, creating risks from stranded assets and regulatory penalties to supply-chain disruption and reputational damage.
In this report, we carried out a sector-based analysis that highlighted agriculture, mining, forestry and energy as key biodiversity risk drivers. The findings can help investors to pinpoint concentrated exposures, guide engagement and reduce impacts.
The implications are twofold: Unmanaged biodiversity risks can erode portfolio value and amplify systemic vulnerabilities, while proactive integration of biodiversity factors enhances resilience and opens opportunities. As markets reward companies aligned with nature-positive strategies, capital allocation that accounts for biodiversity may deliver both downside protection and potential upside.
Source: Adapted from “Nature-related Financial Risks: A Conceptual Framework to Guide Action by Central Banks and Supervisors,” Network for Greening the Financial System technical document, September 2023.
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An Investor's Guide to Nature and Biodiversity Risks and Impacts
Investors thinking about biodiversity are asking questions such as, how do I know which holdings are most vulnerable to biodiversity loss? And, can I measure biodiversity risk exposure across my portfolio? We aim to help them start finding answers.
Nature and Biodiversity
Identify and measure nature- and biodiversity-related risks and impacts.
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