ESG Viewpoint: Banking on biodiversity
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ESG Viewpoint: Banking on biodiversity

Biodiversity loss - why it is material and relevant for banks

Biodiversity is the variability of living organisms, including diversity within and between species. This biodiversity, together with water and soil, forms the ecosystems and the services these provide, which underpins the economy and sustains life on earth. These ecosystem services include climate, soil fertility and air quality regulation, water storage and filtration, pest and disease control, among other services. However, global wildlife populations have plummeted by 69% on average since 1970, painting a sobering picture on the current state of nature and biodiversity.

As biodiversity loss continues and awareness of the implications grows, companies will increasingly face a range of potential risks. The World Economic Forum have also estimated that over half of the world’s total GDP is dependent on nature and the associated ecosystem services it provides, representing a potential systemic risk to the global economy.

This is the particularly the case for banks, who have wide and diverse exposure across a range of economic sectors, as well as more direct exposure to some higher biodiversity impact and dependency sectors, such as agriculture. It is positive to see that banks globally are already recognising these potential risks and calling for greater biodiversity protection. In October 2021, over 50 banks signed a declaration, coordinated by the China Banking Association, supporting biodiversity conservation, and seeking to strengthen biodiversity risk management and disclosures.

Interested in learning more?

Given their exposure to a range of economic sectors, banks need to account for biodiversity impacts across their operations. We’ve found however, that many need to improve their approach. Read about our best practices following engagement with the banking sector, including a robust approach to governance, a clear approach to evaluation and disclosure, and target setting.  Download the full viewpoint to discover more.

14 February 2023
Tom Barron
Senior Associate, Responsible Investment
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ESG Viewpoint: Banking on biodiversity

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For professional investors and qualified investors only.
Reserved for professional clients as defined by the European Directive 2014/65/EU (“MiFID II”) and is not for retail distribution.
This material should not be considered as an offer, solicitation, advice, or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness. Actual investment parameters are agreed and set out in the prospectus or formal investment management agreement. Financial promotions are issued for marketing and information purposes; in the United Kingdom by Columbia Threadneedle Management Limited, which is authorised and regulated by the Financial Conduct Authority; in the EEA by Columbia Threadneedle Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); and in Switzerland by Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited. In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.

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Risk Disclaimer

For professional investors and qualified investors only.
Reserved for professional clients as defined by the European Directive 2014/65/EU (“MiFID II”) and is not for retail distribution.
This material should not be considered as an offer, solicitation, advice, or an investment recommendation. This communication is valid at the date of publication and may be subject to change without notice. Information from external sources is considered reliable but there is no guarantee as to its accuracy or completeness. Actual investment parameters are agreed and set out in the prospectus or formal investment management agreement. Financial promotions are issued for marketing and information purposes; in the United Kingdom by Columbia Threadneedle Management Limited, which is authorised and regulated by the Financial Conduct Authority; in the EEA by Columbia Threadneedle Netherlands B.V., which is regulated by the Dutch Authority for the Financial Markets (AFM); and in Switzerland by Columbia Threadneedle Management (Swiss) GmbH, acting as representative office of Columbia Threadneedle Management Limited. In the Middle East: This document is distributed by Columbia Threadneedle Investments (ME) Limited, which is regulated by the Dubai Financial Services Authority (DFSA). For Distributors: This document is intended to provide distributors with information about Group products and services and is not for further distribution. For Institutional Clients: The information in this document is not intended as financial advice and is only intended for persons with appropriate investment knowledge and who meet the regulatory criteria to be classified as a Professional Client or Market Counterparties and no other Person should act upon it.

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