There are several nature-positive policies that financial institutions can adopt now.
Fair Finance International (a Civil Society Network active in 14 countries) lays out best practices and assessment criteria for measuring biodiversity, forestry, fisheries, food-related risks (including forest risk commodities like soy, palm oil and timber) that banks can adopt in addition to policies for climate change, energy, and human rights. It recommends that financial institutions use these to adopt nature-positive policies. For example, recommended best practices include ensuring clients:
- refrain from trade in species on all appendices of the CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) list;
- adhere to AWS’s (Alliance for Water Stewardship) International Water Stewardship Standard;
- or do not undertake agricultural endeavours in areas listed in the Ramsar Convention on wetlands.
Other key indicators for best practice include whether a financial institution publishes a sustainability report that contain disclosures from the GRI Standards, or whether an institution discloses the names of all outstanding project finance transactions and project-related corporate loans, including the information required by the Equator Principles.
In several countries Fair Finance ranks financial institutions against its best practices and assessment criteria. Rankings of financial institutions according to the extent of their adoption of the sorts of policies outlined above is identified as a key means to incentivise greater uptake of such policies and tools by the industry. An expansion of Fair Finance’s banking sustainable finance policy league tables to the UK and the US is recommended and welcomed by financial institutions.
For asset owners, ShareAction published a ranking in 2020 that assessed the extent to which the 75 largest global asset managers consider biodiversity loss in their investment decisions and stewardship of companies and laid out recommendations for what more could be done. It recommends that asset manager and asset owners:
- adopt a cross-sectoral biodiversity policy which includes good practice principles;
- prioritise conservation during the early stages of project planning; and
- engage with operators of infrastructure assets
Institutional investors also report that they would benefit from asset managers applying such principles to fund development in order to better support asset owners in their desire to allocate capital to a nature-positive transition.
Other guidance around due diligence and best practices can be found within the PRI’s Biodiversity discussion paper.
Click here to return to the Pathway for Action homepage, or to move on to Recommendation 4: Engage with and require sustainable supply chain certification schemes.
For a pdf of the full report click here.
RECOMMENDATION IN PRACTICE:
Ranking Netherlands' Financial Institutions
The Dutch Fair Bank Guide was launched in 2009. It consists of five civil society organisations: Oxfam Novib, World Animal Protection, Pax, Friends of the Earth and Amnesty International. Fair Finance Netherlands has published 18 policy assessments and 20 case studies during its 11 years, starting with banks and expanding to insurance companies and pension funds in the last five years.
The continued engagement with financial institutions in the Netherlands has attributed to Dutch institutions being at the forefront of many international initiatives, such as Partnership for Carbon Accounting Financials (PCAF) and PBAF. Dutch banks are also very active in international supply chain initiatives such as the RSPO, RTRS, MSC and FSC.
According to Fair Finance Netherlands’ rankings, Dutch banks have shown a continuous improvement in the policy assessments which are conducted every two years in which the banks policies are assessed on 15 different themes. Currently the highest ranking banks are Triodos and Volksbank.