Biodiversity tool unveiled to help FIs manage extinction, ecological risk

A biodiversity module has been introduced to help financial institutions (FIs) explore to what extent their portfolios may impact species extinction and ecological integrity.

The free tool – called Encore (Exploring Natural Capital Opportunities, Risks and Exposure) – has been launched by the Natural Capital Finance Alliance (NCFA) and has received backing from the UN.

According to the NCFA, the module enables banks and investors to analyse the potential impact of their financing and investment activities in agriculture and mining on biodiversity loss.

Banks and investors will be able to use the module to map their current exposure as well as explore potential future scenarios which could help them discover potential ways to increase their positive impact within agricultural and mining portfolios.

Users of the Encore tool will also be able to receive guidance on company engagement, which will allow FIs to collaborate with other stakeholders in high-priority areas to acclimatise practices to make them more nature-positive.

Currently, over 50% of global GDP is moderately or highly dependent on nature and its services. In the Encore module, over 30 FIs have taken part in its development – including UBS, Citi and Barclays.

UN environment programme finance initiative head Eric Usher said, “The Encore biodiversity module lies at the cutting edge of sustainable finance, allowing financial institutions to take material action to pivot the real economy towards a nature-positive future.”

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