Nature Positive Corporate Assessment Guide for Financial Institutions 2025

Financial institutions survey FIGURE 3 What would need to change in the wider ecosystem for you as a financial institution to increase financing to the nature-positive transformation? Increased data availability Policy change to incentivize action on nature Increased data quality Mandatory/regulatory requirements Increased corporate demand for fin ancing/ underwriting nature initiatives/projects Clearly attractive economics for financing nature Mechanisms to reduce risk/change risk profile (e.g. insurance, blended finance)86% 83% 78% 75% 69% 69% 58% Source: World Economic Forum; Oliver Wyman. A report by Business for Nature identified embedding nature in risk management systems as one of five key transformative actions financial institutions need to take to shape a nature-positive future.14 Nature-related financial risks are also a key concern for global financial system monitoring bodies, such as the international Financial Stability Board (FSB).15 Despite initial efforts to systematically examine nature- related opportunities (using opportunity categorization by the United Nations Environment Programme Finance Initiative and the Finance for Biodiversity Foundation16), many financial institutions tend to assess nature in their client portfolios through the lens of risk and compliance, rather than opportunity. For example, financial institutions based in the European Union (EU) are driven by Corporate Sustainability Reporting Directive (CSRD) disclosure requirements to act, and many respondents identified policy change (83%) and regulatory requirements (75%) as necessary for catalysing further financing for nature. However, some financial institutions are already beginning to view nature as a valuable opportunity. For instance, Legal & General’s asset management division emerged as the largest cornerstone investor in Ecuador’s debt-for-nature swap, contributing $250 million in marine conservation loans in 2023. Similarly, Emirates NBD (ENBD) has set a sustainable financing target, prompting the institution to guide its clients on blue and green bonds that emphasize water-related (and other) ecological initiatives. While regulatory requirements such as the CSRD are critical and have helped to drive progress on nature disclosure, leading financial institutions are already beginning to see beyond a regulatory compliance exercise to the compelling opportunities in nature investment. Survey respondents were asked how they perceive the future potential demand for nature-related opportunities (high/ medium/low). They saw the following as the most promising business opportunities, with more than 50% of respondents expecting high future demand: 1. Process re-engineering to achieve operational efficiencies, such as in waste or water use reduction 2. The mitigation of regulatory/environmental risks, such as pollution prevention and emissions reduction 3. Financing or insurance for regenerative agriculture Furthermore, sustainable forestry, land conservation and restoration, nature-based solutions and emerging nature technology are also expected to have high future demand by more than 43% of survey respondents. Leading financial institutions are already beginning to see beyond a regulatory compliance exercise to the compelling opportunities in nature investment.Barriers to capital allocation and the business case for nature Over the course of 2024, the World Economic Forum and Oliver Wyman engaged with financial institutions through interviews, roundtables and surveys. In one survey conducted during this engagement, financial institutions were asked about the changes in the wider ecosystem required to increase financing for the nature-positive transition. Overwhelmingly, they cited the need for increased data availability (86% of respondents) and data quality (78%) – among other factors – as foundational for increasing investment in the nature transition. This report demonstrates that the data needed by financial institutions to assess corporate nature efforts through a comprehensive set of indicators may already exist. Nature Positive: Corporate Assessment Guide for Financial Institutions 8