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Banking and Financial Services

About this sector

The finance industry constitutes the largest group of companies in the world. Banking is the largest financial services sector (24% of total assets in 2005), followed by securities (21%), insurance (18%), pensions (17%) and government related services (13%)168. The role of the sector in biodiversity loss and, indeed, in its conservation is increasingly being recognised. By providing financing to projects and companies, the sector has an indirect reliance and impact on biodiversity and ecosystem services.

Impacts

  • Indirect impacts through investment/ provision of financial services to company’s which mismanage biodiversity.
  • Potential for positive impact through incentivising development of biodiversity related products e.g. biodiversity offsets, offsets, REDD, payments for ecosystem services.

Opportunities/Risks

  • Development of new financial products e.g. carbon credits or biodiversity offsets.
  • Differentiation and branding e.g. HSBC’s Climate Partnership.
  • New investment opportunities e.g. biodiversity banking.

Case Studies


Handling of the Yamato River water quality improvement support time deposit “Yamato River Time Deposit”

Handling of the Yamato River water quality improvement support time deposit “Yamato River Time Deposit”

This project is based on the “Yamato River time deposit”, a product marketed by Yamato Shinkin Bank and designed to improve the water quality of the Yamato River, which flows through the basin of Nara. Additional interest is paid to deposits when prescribed improvements are seen in water quality, specifically the BOD (biological oxygen demand) levels.

Testing the first habitat banking project in Europe

Testing the first habitat banking project in Europe

New market mechanisms targeting biodiversity conservation are emerging worldwide, and among others, the biodiversity offset market size is expected to increase in the coming years. The French company CDC Biodiversité has seized this opportunity and is testing the first habitat banking project in Europe.

Utilizing financing mechanisms to protect Japanese satoyama biodiversity

Utilizing financing mechanisms to protect Japanese satoyama biodiversity

Aware of the role finance has to play in the field of biodiversity projects funding, Sompo Japan has developed a loan mechanism that fosters investments in ecological housing and finances a charity fund dedicated to Japanese specific landscape protection.

Yogyakarta Special Province Wildlife Reserve Restoration and Recovery

Yogyakarta Special Province Wildlife Reserve Restoration and Recovery

This project is designed to restore a natural reserve that has been ravaged by illegal logging and, over the long term to contribute to the local economy through the planting of trees. This has resulted in the planting of some 300,000 trees across nearly 350 hectares of highland area.


Tools and Mechanisms


Timber Trade Federation (TTF)

Timber Trade Federation (TTF)

http://www.ttf.co.uk/

The TTF provides environmental services to its members including briefings, training, tools, research data, and policy making. Additionally, they promote the positive environmental benefits of using wood products and encourage environmentally responsible trading practices. Furthermore, they offer guidance on all relevant environmental matters and regularly publish material for members and their customers. Finally, the TTF advises the government on timber procurement through the Reference Board for the Central Point of Expertise in Timber (CPET).
  • To download the Business Support Services brochure,  Click here (Download time is approximately 30 seconds).

Investment Screening Guidelines for Financial Investors

http://gftn.panda.org/practical_info/financial_ins...

The WWF has been working with financial institutions since 2005 to develop responsible investment policies addressing sector-specific investments impacting the forest industry.  The initiative helps shape internal banking policies on how these institutions manage their responsibilities in safeguarding the environmental and social qualities of projects impacting forests.Additionally provided is capacity building and training for frontline bankers to screen investment proposals based on social/environment principles.
Forest Footprint Disclosure

Forest Footprint Disclosure

http://www.forestdisclosure.com/

The Forest Footprint Disclosure Project (FFD) is a new UK government-supported initiative created to help investors identify how an organisation’s activities and supply chains contribute to deforestation, and link this 'forest footprint' to their value.
DamRight! An Investor’s Guide to Dams (WWF)

DamRight! An Investor’s Guide to Dams (WWF)

http://assets.panda.org/downloads/investorsguideda...

Provides investors – officials of commercial and multi-lateral development banks, government aid agencies, export credit agencies and governments – with an overview of the benefits, costs, and risks associated with dam investments, as well as options for mitigating impacts. A checklist to aid decision-making is provided.
Palm Oil Financing Handbook Practical guidance on responsible financing and investing in the palm oil sector (WWF)

Palm Oil Financing Handbook Practical guidance on responsible financing and investing in the palm oil sector (WWF)

http://assets.panda.org/downloads/the_palmoil_fina...

This guide aims to help financial institutions reduce the environmental and social risks associated with transactions in the palm oil sector.  It focuses on developing and implementing a responsible palm oil finance and investment policy.

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Banking and Financial Services

Case studies
Tools and Mechanisms