It is clear that policymakers and regulators, including central bankers and financial supervisors, need to develop comprehensive strategies to manage nature-related financial risks. These risks include those related to the interactions between climate change and biodiversity loss, and to biodiversity loss resulting from other human pressures such as habitat degradation and over-exploitation. This report is designed to help central banks and financial supervisors understand the issues in the context of existing science, theory, policy and practice, and to recommend steps that could begin to address biodiversity-related risks in financial systems.
This report is the third output of the NGFS-INSPIRE Study Group on Biodiversity and Financial Stability, following the publication of a Vision Paper in June 2021 and Interim Report in October 2021. The Group was established to help central banks and financial supervisors fulfil their mandates of price and financial stability in the face of financial risks stemming from biodiversity loss, or ‘biodiversity-related risk’.
This Final Report provides the Study Group’s conclusions on the scale of the threats, and reviews the actions that central banks, supervisors and other financial actors are already taking in response. It identifies a suite of policy options for central bankers and financial supervisors to evaluate and mitigate financial risks arising from biodiversity loss and makes recommendations for near-term action. It also includes a research agenda to respond to the gaps in knowledge and understanding.