Integrating Nature’s Loss and its Risks within the Finance Sector: A Look at India’s Finance Landscape
Nature-related risks, similar to climate-related risks, include physical risks (reduced natural services), transition risks (changes to combat nature loss), and liability risks (litigation for biodiversity loss). The financial sector can drive a shift towards a low-carbon, nature-positive economy. India's commitments, such as the Kunming-Montreal Global Biodiversity Framework and its NDCs, offer opportunities for policy development aligned with nature-positive outcomes.
Integrating Nature’s Loss and its Risks within the Finance Sector: A Look at India’s Finance Landscape calls for coordinated action from the government, central bank, and financial institutions. The government should establish a finance sector roadmap and foster a nature-positive financial ecosystem. The central bank should integrate nature-related risks into supervision and encourage regulated entities to adopt a "Double materiality approach." Financial institutions must recognise and disclose nature-related dependencies. An environmentally conscious finance sector can redirect investments towards sustainable projects, accelerating the transition to a sustainable economy and driving sustainable finance through innovative instruments.
