The loss of biodiversity poses an increasing threat not only to the survival of ecosystems but also to economies and societies that depend on these ecosystem services. Banks are exposed to significant risks associated with biodiversity decline and are at the same time in a unique position to accelerate positive change (double materiality). To protect biodiversity, capitalise on opportunities and mitigate risks, banks need to gain insights into their biodiversity impact: as a result, many banks have started, or want to start, assessing the impact of their activities. Capturing the largely indirect biodiversity impact of a bank’s portfolio can be complex and challenging. The BFI holds the position that banks can, nonetheless, start assessing their biodiversity impact by screening their portfolio using a tiered approach. Furthermore, to integrate biodiversity into decision-making, monetary valuation is key.

This paper, part of a wider series of discussion papers, sets out the position of the Banking for Impact (BFI) working group on measuring and valuing biodiversity. In particular, it elaborates on three key challenges related to assessing biodiversity impact and how these can be addressed. The paper represents a joint vision of the BFI and its members, but it does not necessarily represent the current practices of individual members.

The aim of the BFI is not to add yet another methodology on how biodiversity can be assessed; rather, it seeks to build on the existing debate by emphasising and showcasing the value of tiered approaches for portfolio screening and monetary valuation in assessing biodiversity. For this, we build on publications and overviews of approaches that already exist, such as the Partnership for Biodiversity Accounting (PBAF) and the Finance for Biodiversity pledge.

Download the Biodiversity Impact of Banks paper