Nature Positive Corporate Assessment Guide for Financial Institutions 2025

Introduction The state of nature has been declining rapidly over the last century; wildlife populations have been shrinking by an average of 69% over the last 50 years.7 Three-quarters of the Earth’s land surface has been severely altered by human activity. This represents an environmental crisis, but it also poses a significant risk to economic stability.8 A majority of the vital ecosystem services on which the global economy and society depend are in rapid decline. While tackling climate change has been the main focus of financial institutions and companies to date, those efforts must now be expanded to include all five drivers of nature change. These include climate change, land, freshwater or ocean use change, resource use or replenishment, pollution or pollution removal, and invasive species introduction or removal.9 These drivers touch the four major realms of nature – land, ocean, freshwater and atmosphere.10Financial institutions must embed nature into risk assessment frameworks to secure economic stability and shape a nature-positive future. The five drivers of nature change FIGURE 1 Climate changeLand/ freshwater/ ocean use changeResource/uni00A0use/ replenishmentPollution/ pollution removalInvasive alien species introduction/ removal Source: Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES); Science Based Targets Network (SBTN); Taskforce on Nature-related Financial Disclosures (TNFD). In 2022, 196 countries adopted the Kunming- Montreal Global Biodiversity Framework (GBF) to halt and reverse nature loss by 2030, with a vision of living in harmony with nature by 2050. As part of this landmark agreement, signatory countries are required to translate the GBF into national biodiversity strategies, action plans and sectoral guidance, and urge all parts of society to tackle nature loss alongside the climate crisis. Financial investments are critical to ensuring the GBF’s success. Even though the term “nature positive” is not explicitly defined in the GBF, companies, financial institutions and non- governmental organizations (NGOs) are increasingly rallying around the concept as a means of contributing to the GBF. The Nature Positive Initiative defines “nature positive” as contributing to the “global societal goals ... to halt and reverse nature loss by 2030, using a 2020 baseline, and achieve full recovery by 2050”.11 Investments in nature remain deeply underfunded, however, with $1.2 trillion worth of annual investment12 in direct and nature-adjacent projects required by the private sector to reverse the decline in natural systems. The focus of nature finance – that is, finance contributing to the nature-positive goal of halting and reversing nature loss13 – needs to broaden from conservation and restoration to include the reduction and avoidance of negative impacts in company value chains across all sectors of the economy. To that end, reducing negative impacts and striving towards a systemic transformation of real-economy company operations and value chains are at the core of financing the nature-positive transition, and represent the focus of this report. Nature Positive: Corporate Assessment Guide for Financial Institutions 6