The financial sector can and must play a key role in driving the transition to sustainable and resilient economies. By leveraging their power to shift financial flows away from unsustainable activities and towards climate-resilient business models, financial institutions can help governments achieve sustainable development and contribute overall to the preservation and restoration of natural capital.
Financial institutions have varying scopes and modes of influence, but all can encourage companies operating in the real economy to adopt science-based sustainability practices that will ensure businesses operate within planetary boundaries and contribute to sustainable development.
Nature provides various important goods and services that enable economic production – and businesses across all sectors of the economy depend on nature. Examples for ecosystem services are pollination, good soil, water quality and quantity management, flood and storm protection, natural pest management, or the provision of fibres and other materials. These dependencies represent a business risk if environmental degradation disrupts them for companies as well as their financiers.
WWF can help redirect existing mainstream finance and also help develop and expand mechanisms and solutions including: SDG-focused investment vehicles, improved environmental focus in impact investing, expanding deployment of credible green bonds, lending incentives related to sustainability risk profiles, and other conservation finance asset class opportunities.