Bees and banks: nature loss as a financial risk

The Network for Greening the Financial System (NGFS), a global network of institutions, mainly central banks and financial supervisors, has just published the 2026 Nature Package, a very useful toolkit for anyone seeking to understand and address the financial risks stemming from nature.
This toolkit consists of three notes available on the NGFS website, freely accessible. The document is intended for banking supervisors, a rather limited audience. However, it makes it clear that the issue of nature-related financial risks has now entered the radar of those who oversee banking activity, something that was not the case in the past. This means that banks are now required to scrutinize the nature-related risks embedded in their portfolios, leading them to look more closely at whether the companies to which they lend are particularly exposed.

Ecosystem services

This is the case, for example, in the agri-food sector. As Sabine Mauderer, Chair of the NGFS, wrote in a post, 75% of the world’s food depends on pollination by bees and other insects; this is why “protecting nature means protecting our economies.” Other sectors are also dependent on the ecosystem services provided by nature: fashion relies on textile fibers (cotton, cashmere, silk) and various types of leather; construction uses gravel, sand, and wood. Nature provides raw materials and regulates temperatures and climatic events. In many regions, wetlands and riverbanks protect against flooding, while soil sealing, drought, and the shrink-swell of clay soils threaten homes and industrial facilities. Ignoring these risks or dismissing environmental concerns in the name of a narrow and short-sighted notion of competitiveness ultimately comes at a higher cost in terms of material damage, and sometimes even human lives. Similarly, tourist regions have a strong interest in preserving their natural capital, which contributes to the attractiveness and beauty of landscapes.

Scenarios

The note on scenarios is relevant to a broader audience. Given the complexity of the subject, it is difficult to calculate the risks associated with the degradation of nature, which is often linked to climate disruption. A scenario-based approach makes it possible to consider different hypotheses and, for companies and financial institutions, to model the relationships between nature, climate, and the economy. Because they invest over multi-year horizons, companies seek to understand under which conditions their value chains might be at risk, and why, so as to mitigate the effects of climate deterioration or water scarcity, for example. Scenarios also help guard against so-called natural disasters, which are often driven by human activity (sea-level rise, heavy rainfall, drought, etc.).

Metrics

Finally, the note on data identifies the metrics that make it possible to assess nature-related risks, drawing in particular on the work of the Taskforce on Nature-related Financial Disclosures. This note includes four case studies illustrating how data on changes in nature can contribute to financial analysis, relating to Malaysia, the Oder region, and the euro area—including one focused on initiatives in Milan involving green infrastructure designed to reduce the impact of rainfall in urban areas. All these cases highlight the need for reliable, accurate data. While mentioning several databases (such as ENCORE), the note also points out existing gaps in this area.

Who is onboard?

Thus, central banks and financial supervisors echo what scientists have been saying: high-quality data are essential for making sound business management and public policy decisions. When European legislation made the disclosure of non-financial data mandatory (CSRD), it triggered strong opposition on the grounds that the burden would be too heavy for companies. While efforts to simplify are commendable, they should not result in depriving companies and public decision-makers of the means to manage new risks that could be severe for the economy and society. It is not regulation that creates the burden, but the seriousness of the degradation of living systems linked to our economic model, something we have ignored for too long.

There is an urgent need to act, as this issue is neither minor nor secondary. As early as 2021, the World Bank estimated that the consequences of a collapse in certain ecosystem services (timber production, fisheries, pollination) could lead to a potential decline in global GDP of around USD 2.7 trillion per year.