Today’s report calls for greater integration of natural capital considerations in financial decision making in the public and private sectors
January 31, 2018, Brussels, BEL. Today, the EU High-Level Expert Group (HLEG) on Sustainable Finance will present their much anticipated report to the European Commission.
Established by the Commission in 2016 to develop an overarching and comprehensive EU roadmap for green finance, the Group was tasked with providing practical policy recommendations with the aim of integrating environmental considerations more effectively into the EU’s financial policy framework, while protecting the stability of the financial system from risks related to environmental degradation.
Containing 24 recommendations, eight of which are key, the report is broad and ambitious, and the Commission will now draw on these recommendations before announcing a formal action plan in the coming months.
It is encouraging that the HLEG have chosen to include a section on natural capital in this report, and a recognition that it is “critical for virtually all kinds of production, and [that] most of the SDGs are either directly concerned with or strongly dependent on natural capital”.
More encouraging still is the recommendation that the Commission should support the use of the Finance Sector Supplement to the Natural Capital Protocol (among other frameworks) as a means for financial institutions to ‘quantify, report and manage natural capital risks and opportunities in their decision making’.
The Coalition applauds the recognition in this report that a natural capital approach provides much more than a simple exercise in impact measurement, and that organizational dependencies on natural capital must also be identified, measured and valued, in order to achieve a true understanding of an organization’s relationship with the natural world.
Investor attitudes have undergone a rapid evolution over the last several years, with many wishing to align their long-term ideals with their investment returns. More recently, initiatives like the Task Force on Climate-related Financial Disclosures (TFCD) and Climate Disclosure Standards Board (CDSB) have re-energized this movement.
The Natural Capital Coalition encourages the Commission to retain the natural capital recommendations in this report, and to go further with the integration of natural capital, ecosystem services and nature-based solutions in policy and application, by taking advantage of the work that is going on around the world.
Mark Gough, Executive Director of the Natural Capital Coalition said;
“The power of the financial sector to shape and position the global economy can catalyze and drive a shift towards a global market where organizations truly understand their relationships with nature and natural systems, leading to better outcomes for all. The recommendations in this report, if retained by the Commission, would put the EU in a strong position to lead the debate around sustainable finance at the international level.”
Joseph Harris-Confino – Head of Communications – Natural Capital Coalition
M +44 (0) 7855 516 654
About the Natural Capital Coalition (The Coalition):
The Natural Capital Coalition has developed the Natural Capital Protocol (hereafter “the Protocol”) to make the value of natural capital visible in business decision making. The Coalition is made up of over 270 organizations from a wide range of stakeholder groups including conservation, science and academia, business, associations, standard-setting, finance, accountancy and policy/government. While the Coalition is primarily directed towards solutions for business, it is also a broad ‘Coalition’ as its name suggests, creating a space where all interested parties from all stakeholder groups can work together to create vibrant societies and productive economies through the recognition of the value of natural capital, and the inclusion of this value in organizational decision making.
The Coalition’s Natural Capital Protocol and associated sector guides have been developed through a unique collaborative process, with 38 organizations coming together under contract to develop something for the public good. The Protocol, along with sector guides for the Apparel and Food & Beverage sectors were launched in July 2016. The Protocol aims to support better decisions by including how business interacts with natural capital.
The Protocol is freely available at https://capitalscoalition.org/protocol/.