Climate Risk Blake Goud Climate Risk Blake Goud

New Guidance On Nature Targets Will Increase Finance For The ‘Blue Economy’

  • New guidance from the Science Based Targets Network provides companies with a framework for assessing their impact on nature and helps them set nature-related targets

  • Nature risk impacts half of all global economic activity, and the blue economy where the RFI Foundation’s Blue Finance Challenge is focused, has been particularly challenging for financial institutions

  • As financial institutions increase their focus on nature risk – including risks related to the ‘blue economy’ – they will rely on technology to provide tools to measure, manage and disclose risks as well as to improve their ability to offer innovative solutions like ‘blue finance’

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Climate Risk Blake Goud Climate Risk Blake Goud

Nature-Related Disclosures Will Widen Data Gaps In The Financial Sector That Technology Will Be Critical In Filling

  • The Task Force on Nature-related Financial Disclosures is taking final feedback ahead of a September 2023 release

  • Financial institutions already challenged by climate-related risks & disclosures will face an added burden to incorporate nature risks

  • Technology will play an important role in understanding, measuring and disclosing nature risks, a key rationale for the RFI’s Blue Finance Challenge

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Climate Risk Blake Goud Climate Risk Blake Goud

Emerging Market Banks Are Highly Vulnerable To Nature Risk

  • Financial institutions in emerging & developing markets have 45-55% of their financing assets exposed to at least one ecosystem service risk

  • Nature risks are often linked with climate risks, which has raised regulatory concerns about their impact on financial stability risks, as well as microprudential risks that banks should consider

  • Because nature risks are so embedded throughout global supply chains, they may attract capital to mitigate the risks that have been more limited in response to climate change, and banks will need to understand the sources of their nature & climate risks

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