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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


Dams and Development Project (DDP). A Framework for Decision Making

Dams and Development Project (DDP). A Framework for Decision Making

http://www.unep.org/dams/Practical_Tools/

The DDP was developed in conjunction with World Bank and IUCN, and sets out recommendations for the sustainable construction of dams. Its aim was improving the decision-making processes, planning, and management of dams and their alternatives. The recommendations from the World Commission on Dams form the basis for many decision-making processes for dams around the world and constitute international soft law. They are also being adapted to national contexts in various public dialogue processes around the world. Additionally, a set of practical, non-prescriptive tools to help decision-makers have been developed in accordance with the main objectives of Phase 2.
High Conservation Value Forest Toolkits

High Conservation Value Forest Toolkits

http://www.hcvnetwork.org/resources/global-hcv-too...

A series of toolkits to enable the identification of areas of high conservation value forest – many commodity standards require this.
Natural Value Initiative – The Ecosystem Services Benchmark (Fauna & Flora International, FGV and UNEP Finance Initiative

Natural Value Initiative – The Ecosystem Services Benchmark (Fauna & Flora International, FGV and UNEP Finance Initiative

http://www.naturalvalueinitiative.org/

Tool to enable institutional investors to better understand the risks and opportunities associated with their investment’s management of their impacts and dependence on biodiversity and ecosystem services. Focus on the food, beverage and tobacco sectors but relevant for companies with agricultural supply chains. Developed with investors Aviva Investors, F&C Investments, insight Investments, Pax World, Grupo Santander and VicSuper. Collectively these have assets under management of approximately Euro 400 billion.
Ecosystem Marketplace

Ecosystem Marketplace

http://www.ecosystemmarketplace.com/

The Ecosystem Marketplace, a project of Forest Trends, is a leading source of news, data, and analytics on markets and payments for ecosystem services (such as water quality, carbon sequestration, and biodiversity).
Species Banking

Species Banking

http://www.speciesbanking.com/

Speciesbanking.com is a global information clearinghouse for biodiversity offsetting, compensation and offset banking. SpeciesBanking.com provides information at two levels: at the Program level and at the level of individual biodiversity Banks.

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Banking and Financial Services

Case studies
Tools and Mechanisms