Advancing biodiversity in ESG: asset owners' integration of nature-related risks

In conversation, Pensions for Purpose's Research Manager explores the integration of nature-related risks in finance. The discussion highlights the urgency for financial institutions to disclose biodiversity risks that align with the global biodiversity framework’s goals of COP16. The main challenges included data standardisation, the economic impacts of ecosystem loss, and the need for scaled-up nature-based investments. Asset owners are increasingly aware of the relationship between climate and biodiversity and the role each plays in resilience and economic stability.

Points covered:

The link between climate and nature: addressing climate and biodiversity as connected issues is essential, given the economy’s reliance on natural ecosystems.

Challenges of integration: effective solutions require consistent metrics and overcoming the tendency to prioritise climate over nature.

Economic impact of ecosystem loss: potential gross domestic product declines highlight the need to bridge the funding gap for biodiversity.

Risks of inaction: failing to invest in biodiversity could slow job creation and undermine sustainability goals.

This conversation aims to inspire asset owners to consider biodiversity, strengthening resilience and accountability across financial systems.