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A study published by the Association of Investors for Sustainable Development (VBDO), reveals that investors are paying increasing attention to the crucial issue of biodiversity. The study among 60 Dutch, financial institutions, shows that more than 2 in 5 financial institutions do not yet give biodiversity a place in investment decision-making.
VBDO’s report emphasizes the growing role of investors in protecting biodiversity and the urgency that a healthy planet is essential for a healthy economy. Yet a good portion of the parties surveyed are not yet paying attention to this. The report also calls for a coordinated effort by all stakeholders to include biodiversity in financial strategies and decision-making.
Loss of biodiversity major risk for financial sector
According to the World Economic Forum’s (WEF) Global Risks Report 2023, biodiversity loss and ecosystem collapse, is the fourth most pressing risk of the next decade. The only risks deemed greater are all three related to climate change. This makes the decline of global biodiversity one of the most pressing issues today.
Last year, WWF released a report that further underscores the urgency of biodiversity loss: the global animal population has declined by as much as 69% since 1970. Christine Wortmann, Greening Finance Netherlands Lead at the World Wildlife Fund (WWF NL), links the importance of biodiversity to the financial sector and emphasizes, ‘Biodiversity is the backbone of our planet and an integral part of our economy. It is good to see that this urgency is landing with more and more organizations; we welcome that. At the same time, there is still a large number of organizations that need to get to work. Therefore, we urge them not to wait any longer. Preserving biodiversity is both an ethical duty and essential for the stability and resilience of our financial markets.’
Importance penetrates boards to a lesser extent
The investors surveyed by VBDO seem to be increasingly aware of this. For example, 58% of the financial institutions surveyed now take biodiversity into account when making investment decisions. While it is encouraging that investors are showing more interest in this topic, VBDO’s report also reveals some important thresholds.
For example, the term “biodiversity integration” is interpreted in different ways, leading to a lack of uniformity in approach and measurement. In addition, the report reveals that a majority of financial institution executives still do not prioritize biodiversity, despite the growing recognition of its importance.
Lack of data no excuse for lack of action
Another reason often cited by institutions for not addressing the issue is the lack of available data. Jacqueline Duiker, Sr. sustainability manager at VBDO, emphasizes, ‘Too little available data should never be an excuse for not getting to work on biodiversity. There are still plenty of steps to be taken. Consider the development of uniform terms and transparent measurement methods. Or at all, putting the urgency of biodiversity conservation more strongly on the agenda within the financial sector.’
