Central banks underestimate the economic threat posed by the loss of biodiversity and its wealth, on which businesses and financial institutions depend.

This is the conclusion of a report made public on Thursday.

The impacts of climate change are increasingly integrated into the assessment of economic risks.

This is much less the case for similar threats from the destruction of nature, according to this report compiled by researchers and the network of central banks NGFS (Network of Central Banks and Supervisors for Greening the Financial System).

Financial systems depend on the nature

"Biodiversity is the basis of life on our planet", summarizes Ravi Menon, president of the NGFS.

“But we are eroding biodiversity at a rate that is harming the ecosystems that provide us with food, water and clean air.

This could cause significant risks to economic, financial and social stability.

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The text underlines the impact of the financial system on nature via the choices of loans, investments and insurance.

He also notes the dependence of these systems on functioning and healthy ecosystems.

For example, agricultural yields are threatened by the reduction of the populations of pollinators victims of pesticides or the reduction of their habitats.

"Inaction is also a choice"

The Inter-American Development Bank estimates that policies aimed at protecting the Amazon and preventing it from reaching the tipping point could generate around $340 billion in additional wealth.

The report highlights that making the transition to a nature-saving global economy is a challenge.

“Government policies are not necessarily wrong,” notes Nick Robins, who co-edited this report.

“It just may be that current investments by businesses and financial institutions are not consistent with a healthy ecosystem.

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Some countries have begun to take action, the study notes.

It still calls on central banks to develop a coordinated approach to respond to the global biodiversity crisis.

“Inaction is also a choice”, underlines Nick Robins, insisting on the fact that threats to nature should be integrated into the risk assessment of central banks.

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  • central bank

  • Planet

  • Global warming

  • Economy

  • Biodiversity

  • finance

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