Climate change and nature loss are deeply interconnected but they have been historically discussed and addressed separately including in the financial sector. However, if financial institutions' engagement and support for the clients with their emissions reduction plans do not address nature loss as well, a number of risks and opportunities will be missed.
This paper details the rationale for integrating climate and nature in financial institutions. It includes materiality of nature-related risks, over and above climate-related financial risks, unintended consequences for nature when actions focus exclusively on climate mitigation and adaptation and compounding effects from interactions between climate change and nature loss.
This paper aims to inform the design of a corporate engagement guide for use by financial institutions and incorporate nature-related financial risks into existing climate agendas.