Biodiversity loss is currently one of the most urgent and complex systemic risks we face. It is a challenge that can only be tackled through a serious re-assessment of our production and consumption patterns, and of the economic assumptions underlying individual and collective decision-making. Triodos Bank is acutely aware of this. We see it as our duty, as a financial institution and as individuals, to preserve and restore nature and biodiversity. Triodos Bank recently published the paper ‘Biodiversity - Beyond risk and return’ in which we explain how the financial sector can contribute to this and present our approach to this challenge.
From overview to a more step-by-step approach for financial institutions
The 'PBAF Standard 2022', which you can find on the PBAF website, describes by way of requirements and recommendations what is needed to carry out a biodiversity footprint: an assessment for financial institutions to measure, manage and report on the negative and positive impact of their loans and investments (e.g. shares, bonds and green bonds) on biodiversity. For example, fund managers can estimate the loss of biodiversity from an investment in an international food company and gain insight into the underlying causes.
Besides important preconditions, the standard explains various methodologies and tools that financial institutions can use to map out their impact. Innovative examples are the use of satellite images to map deforestation and the detection of certain animal species through DNA traces in rivers.
The standard is harmonised as much as possible with other initiatives in the financial sector, such as the Taskforce for Nature Related Disclosures (TNFD), the Science Based Targets Network (SBTN) and the EU Align project.
Biodiversity loss
Biodiversity, the variety of life and the ecosystems in which this life occurs, is the basis of everything that keeps us and our society alive. Recent studies show that life and ecosystems worldwide are being affected at a rapid rate, with deforestation, the intensification of agriculture, overfishing, hunting, pollution and climate change being major causes. Sweeping economic, political and social changes are necessary to prevent the extinction of one million plant and animal species in the coming decades. This requires additional measures from governments, businesses and the financial sector.
About PBAF: moving towards a global standard for the sector
The Partnership for Biodiversity Accounting Financials (PBAF) was established in 2019 by founding partners ASN Bank (part of de Volksbank), ACTIAM, FMO, Robeco, Triodos Bank and Triple Jump. The foundation's objective is to contribute to a harmonised approach to assessing and measuring biodiversity impact by the financial sector through knowledge exchange and the development of the 'PBAF Standard'. This will allow for the protection and restoration of nature to proceed in a targeted manner. PBAF has grown in a relatively short period of time into an alliance of 36 financial institutions from 9 countries, with total financial assets of 8.2 Trillion US dollars. In 2021, the initiative was transformed into an independent foundation. PBAF is a sister initiative of the Partnership for Carbon Accounting Financials (PCAF), which now has a membership of 264 financial institutions worldwide. For more information:www.pbafglobal.com