Summary
The planet’s ecosystems underpin our economic system, with estimates of over half of the world’s GDP being moderately or highly dependent on nature and its services. However, despite their clear importance, they are being destroyed at a rapidly accelerating rate. Given the financial sector’s integral role in underpinning the global economic system, financial institutions are highly exposed to the risks of ecosystem loss through their financing of and investments in companies. This report summarises the risks into three types: physical risk; transition risk; and systemic risk. The report then provides a 5-step guide for financial institutions on how to address these risks in their portfolios.