In recent years, financial institutions (FIs) have increasingly recognized climate as an important driver of financial risks and opportunities yet nature has received comparably little attention. Climate and nature interact in a number of complex ways, in some cases compounding risks and opportunities and in others working against each other. These interactions have implications for risk exposure and future investment returns that to date are largely unexplored.

Against this backdrop, the Finance for Biodiversity (F4B) Initiative has launched a programme of work seeking to unpack the climate-nature nexus for the financial sector. It takes a practical look at which elements of nature are picked up by current financial sector approaches to climate, and which elements are left off the table. To do this, it examines where climate- and nature-related risks and opportunities overlap; what that means for the investment potential of different sectors and solutions; and how these map onto current thinking on climate within risk management and broader investment strategies. This will lead to a roadmap for how financial institutions can build out their nature capability, drawing from the lessons offered by climate, and leveraging existing infrastructure.

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