Life on land
Episode 2/7
Key facts and figure
According to the United Nations Environment Programme (UNEP), more than 80% of the human diet is covered by plant based products. Only three cereal crops – rice, maize and wheat – provide 60% of energy supply
The total value of the global economic provided by these ecosystems, according to the World Economic Forum, is $125 trillion to $140 trillion per year, which corresponds to 7 times the GDP of the US
The World Economic Forum estimates that environmentally sustainable structural change measures could create an annual economic value of over $10 trillion and up to 395 million jobs within the next decade.
How the challenge is addressed by the financial industry:
- Principles for Responsible Investment (PRI), the world’s biggest industry body for sustainable investing, said investors have “limited awareness” of the biodiversity-related financial risks and few commitments or policies to address it. In a report issued in 2020 they highlighted how “biodiversity and ecosystem service loss impacts businesses as a result of transition, physical, litigation and regulatory and systemic risks, which have the potential to affect investment value in the short, medium and long term”.
- De Nederlandsche Bank NV, the Dutch central bank, is the first central bank to highlight biodiversity as a material financial risk. In June 2021 they released a landmark study which highlights that:
- Country’s financial institutions held 510 billion euros of investments that were highly or very highly dependent on one or more “ecosystem services,” a term that refers to the benefits that nature provides to society and the economy such as food and water;
- The assets at risk represent as much as 36% of the assets the central bank assessed across Dutch banks, pension funds and insurers;
- An initiative to bring together a Taskforce on Nature-related Financial Disclosures (TNFD) was announced in July 2020. The TNFD aims to build upon the success of the Task Force on Climate-related Financial Disclosures (TCFD), to give companies and financial institutions a complete picture of their environmental risks, and to direct investment and capital expenditure to activities that support biodiversity. Endorsed by the G7 finance ministers, and sponsored by the United Nations, the framework has been officially announced on June 10, 2021; it will be tested and refined in 2022 before its launch and dissemination in 2023.
How BNP Paribas addresses the issue:
- In 2018, the BNP Paribas Group participated in the launch of act4nature, an initiative which brings together corporations, the public sector, scientific researchers and environmental associations, with the aim of creating an international collective movement to protect, promote and restore biodiversity
- Since 2020, BNP Paribas has been one of the sponsors of the Taskforce on Nature-related Financial Disclosures (TNFD) and is an active member of the Informal Working Group, which defined the scope and work plan of the TNFD co-chaired by Antoine Sire, Director of Company Engagement and Member of the Group Executive Committee.
- In 2021 BNP Paribas is strengthening its commitments to contributing to the preservation of biodiversity. By 2025, the Group aims to achieve €3bn in financing linked to the protection of the Earth’s biodiversity, to evaluate its corporate clients on criteria linked to biodiversity, and to invest in €250m in start-ups committed to environmental change.
- Since 2010, the BNP Paribas Foundation has funded the Climate & Biodiversity Initiative, providing €18 million for 27 research projects.
Discover our other episodes throughout the summer. Around the theme of sustainability, they address the role of the financial sector in different Sustainable Development Goals, and allow you to identify how you, as an investor, can act for a better and more sustainable future.