Nature Positive Corporate Assessment Guide for Financial Institutions 2025

The momentum for assessing corporate nature performance is building This report aims to outline a practical approach that financial institutions can apply to assess company efforts to align their strategies with the protection and restoration of nature. This approach will help them to identify key information related to their portfolio companies. In a recent survey conducted by Oliver Wyman and the World Economic Forum, financial institutions identified areas where they believe more guidance is required to support further capital allocation to nature. Overall, four key areas were identified by more than 70% of surveyed financial institutions: –Quantification of risks –Quantification of opportunities –Understanding financing needs for real-economy companies (including the analysis of key trends, sectors and technologies) –Methodology to evaluate corporate performance on nature and company nature transition plans Motivated by this finding, this report advises responding to the need for guidance by providing a collective perspective on how financial institutions can assess companies’ nature efforts and impacts.Sector reports BOX 1 The World Economic Forum, together with the World Business Council for Sustainable Development and Business for Nature, has issued 17 sector reports analysing nature-related business opportunities. These reports identify four to five priority business actions for each sector, grounded in each sector’s key nature-related impacts and dependencies, and risks and opportunities. Tackling these opportunities will require substantial investments of over $4.6 trillion. For example, one priority action for the automotive sector is to expand circularity to avoid and reduce material waste across the value chain. This will require investments in new technologies and efficiency-increasing mechanisms enabling companies to enhance processes and reuse more materials. This would lower the sector’s negative effects on nature. For more information on sector-specific opportunities to unlock value through nature-positive transitions, please see the Nature Positive Transitions: Sectors report series. Financial institutions survey – areas of guidance FIGURE 4 Which areas would you like guidance from industry standard setters and think tanks on, to enable your organization to increase financing to the nature-positive transition? 0PercentageBusiness case: quantification of risks/risk scenario analysis (quantification of financial risk under different scenarios) Business case: quantification of opportunities Financing needs from real economy companies (e.g. analysis of key trends/key sectors/technologies/themes to finance) Methodology to evaluate corporates’ nature-positive transition plan and their performance on nature Case studies of other financial institutions’ nature-specific projects/ deals/transactions Case studies of other financial institutions’ investment/lending/ underwriting policies (e.g. how to define “nature-related green business”) Nature-related metric and target setting for financial institutions Impact and dependency assessment Financing/investment/insurance mechanisms/instruments/blueprints (e.g. nature-related financing products/services to offer) Understanding of sector-specific material risks and opportunities, and priority actions for real economy sectors Target setting for financial institutions irrespective of disclosures/targets set by real economy Case studies of other financial institutions’ stewardship on nature Case studies of other financial institutions’ governance structures for nature78% 75% 75% 72% 67% 67% 67% 64% 61% 58% 56% 47% 47% Source: World Economic Forum; Oliver Wyman. Nature Positive: Corporate Assessment Guide for Financial Institutions 9