The German government’s nature department would like to see regulation on biodiversity progress so that the financial sector is better equipped to tackle the environmental crisis.
Speaking during a sustainable finance conference hosted by the German government on Wednesday, Thomas Graner, vice president of the German Federal Agency for Nature Conservation (BfN), said his agency is concerned that regulation “in its current state is not yet sufficiently developed”.
“The topic of biodiversity should play an even deeper role. We hope that this will be adapted in future. The EU taxonomy has offered us a significant window of opportunity,” he added.
The EU’s taxonomy of sustainable activities extended last year to include areas including biodiversity, but some market onlookers are dissatisfied with the result.
Furthermore, BfN has been finding it “challenging” to promote a way for financial institutions to measure biodiversity systematically, Graner said.
“Which data is actually needed or can be used by financial markets?” he asked, adding that more standardised information can help financial decision makers to address the risks and opportunities of nature-related investments.
During the conference, Nathalie Borgeaud, TNFD lead of financial markets stakeholder engagement, called on financial institutions to use external data providers to assess their impacts on nature across their value chains.
Lack of unified global agreement on nature-related metrics is often said to be the greatest barrier holding back the scaling of investments in biodiversity, though the level of detail on indicators across standards has ramped up significantly over the last year.
BfN is working on sustainable reporting, the biodiversity part of the EU’s Corporate Sustainability Reporting Directive, and the integration of ecosystem services into environmental accounting, Graner said.
“The integration of nature conservation into future financial decisions, is still in its infancy. And we still have a lot of work to do,” he added.
“Due to the complexity of the topics, biodiversity and financial experts need to work more closely together to build expertise, knowledge and capacity. The protection and restoration of nature requires the commitment of many stakeholders.”
Simon Zadek, co-CEO of NatureFinance, highlighted that Germany has a key role to play in global biodiversity action because of its influence over the EU.
“Germany has to be a player, notwithstanding the fact that you don’t have one of the world’s largest financial communities,” Zadek added.
By Thomas Cox – t.cox@carbon-pulse.com
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