Central banks network launches research project on biodiversity and financial stability

On the 04/07/21 at 7:58AM


Tuba Raqshan

The Network of Central Banks and Supervisors for Greening the Financial System (NGFS) announces study to understand and address implications of broader nature-related risks.

The NGFS, representing 89 central banks and supervisors and launched at the Paris One Planet Summit in 2017, has teamed up with the International Network for Sustainable Financial Policy Insights, Research, and Exchange (INSPIRE), its research stakeholder, for this study. The research stems from growing number of central banks and supervisors recognising the need to extend focus from climate change to understanding and implications of broader nature-related risks, conservation of nature and biodiversity. It aims to establish an evidence-based approach to how central banks and supervisory authorities could fulfil their mandates in the context of biodiversity, with a focus on land-use and deforestation.

This project will be co-led by the Chair of the NGFS Workstream on Research (overseen by Dr Ma Jun, managed by Dr Tianyin Sun) and INSPIRE (overseen by Prof Nick Robins, managed by Dr Simon Dikau). Dr Ma Jun, Chair of the NGFS Research Workstream, co-Chair of the G20 Sustainable Finance Study Group, and Chairman of China Green Finance Committee, said that the impact of biodiversity loss on the economy and financial system is of systematic importance but poorly understood.

Companies are highly dependent on the services that ecosystems provide, but may at the same time have a harmful impact on the environment, said Frank Elderson, chair of the NGFS and member of the ECB’s Executive Board. “The financial risks that stem from a loss in biodiversity are a serious threat to the financial sector that urgently require better understanding by policy makers and regulators to which the new NGFS/INSPIRE Study Group will provide an important contribution,” he added.  

The Study Group will complement existing initiatives by setting out recommendations that financial authorities can take in the near-term as well as produce a long-term research agenda on biodiversity, said Professor Nick Robbins, Grantham Research Institute on Climate Change and the Environment. Recently the United Nations Principles for Responsible Investment (PRI) launched a survey to understand how institutional investors and their stakeholders currently use biodiversity-related data.

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