Biodiversity and Financial Stability: Exploring the Case for Action

June 18, 2021Published by Network for Greening the Financial System

The Network for Greening the Financial System and Inspire have established a joint study group on biodiversity and financial stability, with the aim of understanding the potential implications of biodiversity loss for financial stability. This paper outlines the rationale for establishing a group to work on this issue.

Biodiversity is declining faster than at any time in human history, with policy efforts having so far failed to arrest the decline. The report explains this could pose risks to the financial system; both from the transition risks of government measures to tackle the problem, and physical risks to economic activities that depend on biodiversity.

According to the paper, the study group will explore whether and how central banks and supervisors can, within the remit of their mandates, play a role in addressing the challenge of biodiversity loss itself and the knowledge gaps around it. This could include assessment and monitoring of the relationship between biodiversity loss and financial stability, and consideration of including conservation goals in central bank mandates.

The group is soliciting feedback on the vision set out in this document and will publish an interim report before Cop15 of the Convention on Biological Diversity, with a final report to be published in early 2022.

This page was last updated October 22, 2021

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