How the Finance Community Engages with Natural Capital

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Over the past decade, green finance has been embraced as a key to the future of sustainable development. Banks, corporations, states, and other financial actors are attracted to this new economic sector, but what are the risks and opportunities? And what’s new?

These are the questions GEDB research assistant Amar Causevic attempts to answer in a commentry titled 'Five Ways the Finance Community Engages with Natural Capital' published in lthe most recent addition of ReThink an in-depth online publication on resilience thinking and global deveopment run by the GRAID programme at the Stockholm Resilience Centre.

"The concept that the financial sector might help countries and other clients get to sustainable outcomes might seem counter-intuitive. On the global list of many environmentally damaging activities, banks, investors, and other financial actors have, for example, been behind the destruction of rainforests – “the lungs of the planet” – such as the Amazon, parts of which have been turned to grazing land for profits.

Yet “green finance” has been in existence for the last three decades: investments by financial intermediaries can help mitigate climate change, promote biodiversity, and more in the name of protecting the biosphere. Green finance encompasses many practices and, despite some faults, five main practices show promise for the future: debt-for-nature swaps, mitigation and conservation banking, impact investment, biodiversity offsets, and climate bonds." 

Read the full commentry on the Rethink website.