The economy both impacts nature and depends on nature. 70% of the world’s largest listed companies have assets in protected areas, and half of global GDP is at least highly dependent on nature. Nature risks can be economic risks, and these risks can cascade into the financial system. At the same time, the Global Biodiversity Framework Target 19 calls for increasing nature restoration funding by at least USD 200 billion annually, coming from both public and private finance.
Newly adopted European legislation such as The Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD) requires that financial institutions identify and report on their principal adverse environmental impacts, and legislation such as the EU Sustainable Finance Taxonomy aims to redirect financial flows toward nature positive. Still, recent surveys in the financial sector show that financial institutions are not prepared to manage nature-related risks, and there is still limited established practice on how to drive nature-positive investment.
In CircHive project tools and approaches are tested to help financial institutions understand how they can assess and manage nature-related impacts, dependencies and risks in a way that is aligned with emerging regulatory and voluntary requirements. Another focus is on how to capitalise on nature-related opportunities and develop nature-positive investment criteria, test the value of nature markets, and investigate how finance can deliver nature protection.
