The Network for Greening the Financial System (NGFS) discusses in this report (March 2022) on the role that central banks and supervisors need to play with regard to the financial and economic risks stemming from biodiversity loss, setting out the links between biodiversity loss and the macroeconomic and financial systems.
This Report explores and analyses different approaches to the design of nature-related scenarios. It also considers current gaps in knowledge, sets out a research agenda, identifies near term policy options, and makes recommendations for action by central bankers and supervisors on biodiversity loss. In line with scientific consensus, it emphasises the need to consider the nexus between climate and biodiversity so that we can develop coherent strategies to address these environmental issues.
The NGFS has issued a clear Statement: “Biodiversity loss could have significant macroeconomic implications. Failure to account for, mitigate, and adapt to these implications is a source of risks relevant for financial stability.”
- Paper ‘Climate Transition Risk: Quantifying the Impact of Carbon Taxation on the Investment Portfolio of Financial Institution’ (MFSA, November 2021).
- ECB’s Economy-Wide Climate Stress Test shows Firms and Banks to benefit from early adoption of green policies (September 2021).