Driving a significant share of global assets under management, financial institutions at the Building Bridges event were waking up to the nature’s critical role in our financial system. The Capitals Coalition brought the global conversation on nature-related risks—and opportunities—directly to this influential group of financial actors, who have the power to shape the future of our economic system.
The understanding of nature as a financial risk has moved to the forefront for stakeholders with a long-term view, such as insurers, pension funds, and regulators. A plethora of methodologies and tools are out there to support this understanding, and we were pleased to share relevant outputs from the SUSTAIN project during the “Exploring nature-related risks and opportunities: ENCORE and beyond” session.
In the different rooms in Geneva, discussion centered around creating opportunities to invest in nature, so embedding the inherent value that nature holds within our economic system.
The hidden value of nature is being explored by thought leaders like Nordea, Aviva, and Pictet, who demonstrated their innovation in the space. Whilst most of the market is focused on risks, many of which remain unaddressed and ‘long-term’, they have evidenced the business case for investing in nature through reduced insurance costs, increased resilience in landscapes, and better revenue generation and financial flows.
According to a new GlobeScan Survey, the integration of various forms of capitals into core accounting systems is now ranked as one of the top three most promising solutions in global sustainability challenges. During the “Pricing Nature” session, we discussed exactly this: how natural capital valuation provides confidence to decision-makers, enabling them to make more informed choices. The piece of the puzzle that is missing is how transactional values can be provided to nature without undermining the intrinsic value that nature holds. The realization at Building Bridges couldn’t be clearer: a balance sheet isn’t truly balanced if nature isn’t accounted for. It is a challenge and the work that the Nature on the Balance Sheet Initiative is doing represents a push to advance holistic impact accounting, making sure that nature’s true value is finally recognized not as a cost or a risk just, but as foundational to prosperity. Partnered with the Building Bridges team, we brought together senior leaders in asset management at the conference unearthing the barriers to recognising nature in financial accounts. This has the potential to unlock solutions, and reduce risk in financial portfolios, whilst building resilience in landscapes and ecosystems.
The Capitals Coalition is driving awareness about bringing nature into the heart of private sector decision making. Through bringing nature and social-related externalities into the boardroom, into financial accounts and directly onto the balance sheets, the most resilient and valuable businesses of the future will be built. Senior leaders in asset management came together during the conference to discuss mobilizing the broader enabling environment needed to incentive action on nature; price signals, stewardship, and policy engagement emerged as important leverage points.
As old systems unwind, and new ones emerge, the bridges we build will define how we land.
