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FfB Guide Outlines Climate and Nature Synergies

A new guide aims to help financial institutions manage the biodiversity and climate risks in their investment and lending portfolios on a more integrated basis. Titled  Unlocking the Biodiversity-Climate Nexus, the guide was written by members of a subgroup of the Finance for Biodiversity Foundation’s impact assessment working group for banks, insurers, asset managers and asset owners. The guide outlines the synergies and trade-offs between climate and nature of a sample of investment and lending solutions that are key to solving the nature and climate crises: agricultural solutions, alternative energy sources, circular economy and nature-based solutions (NbS). It recommends that financial institutions invest in synergy-generating solutions for the biodiversity and climate nexus and those minimising trade-offs. The guide also calls on firms to identify and prioritise sectors with a high impact on biodiversity and climate, engage with firms “by leveraging relevant and existing frameworks” and establish sector policies which take into account synergies and trade-offs between biodiversity and climate. It also proposes the integration of biodiversity into climate targets, policy and reporting. The guide said “the most common trade-offs of nexus themes such as nature-based solutions, alternative energy, regenerative agriculture and circular economy solutions can already be avoided by changing the way these projects are undertaken”. According to the authors, By using renewable energy to power solutions, taking a results-based approach and considering the impact of activities on both climate and nature at every step, financial institutions can help mitigate trade-offs and exploit synergies. Fiona Melrose, Head of Group Strategy and ESG at UniCredit, added: The economy must profoundly rethink certain paradigms to be truly sustainable, and financial institutions have their part to play in this.  This paper lays out the key pillars, linking the issues of climate change with those of the impacts on nature.” 

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