8. Recommendations

Despite the fact that there is undoubtedly greater interest in biodiversity issues in the financial sector, there is clearly a huge effort needed to continue to build the biodiversity business case and increase the awareness of biodiversity as a significant business factor within the financial sector. The following recommendations can contribute to this:

Continue to build the biodiversity business case for FIs

  1. A Stern-like review97,sss of the economic costs of biodiversity loss and benefits of biodiversity conservation can lift the issue up the international political and business agenda. The need for such a study was also highlighted during the G8 meeting of environment ministers in Potsdam, March 2007.There is a big role to play here for government agencies, research institutes, as well as for the NGO community.

  2. Greater focus on quantifying the business case from a risk perspective. Though this project provided a wide-range of case studies expressing evidence of the business case, it is important to link biodiversity business risks (BBRs) as much as possible to tangible financial metrics, such as default risk, shareholder value or market capitalization, in a systematic way.

  3. With respect to biodiversity business opportunities (BBOs), a stronger effort should be undertaken from the NGO community (in collaboration with FIs that are recognizing potential business opportunities) towards identifying BBOs, as well as start pilot projects to assess their financial viability.

Diversify communication & raise awareness of the materiality of biodiversity to FIs

  1. Diversify the communication channels about the business case for biodiversity to FIs. Governments, multilateral institutions and NGOs as well as those FIs that have already started to address biodiversity are examples of stakeholders that can participate in such a process.

  2. Building capacity within FIs to mitigate BBRs and identify BBOs. As this issue is rather new for the sector there is a need for FIs to build capacity to deal with this emerging issue. This can for example be achieved through training of staff, engaging in partnerships with NGOs and multilateral organizations or by hiring consultancies that possess the technical capacity. UNEP FI has already initiated a working stream on the issue.

Develop tools that day-to-day users can use

  1. Biodiversity should be integrated in such a way that it becomes practical by people using such tools on a day-by-day basis. This includes, for example, client relation managers, credit analysts, and fund mangers.

Focus on the entire financial sector

  1. Focus on other segments of the financial sector. This project focused on commercial banking, asset managers/investors and insurance. In an effort to increase awareness throughout the entire sector, there is a business rationale to include other segments of the financial sector as well.

sss The Stern review outlined that future loss of GDP as a result of climate change is projected to be in the range of 5% to even 20% each year, whereas the costs of action now is estimated to cost about 1% GDP per year.

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