Home > Sectors > Banking and Financial Services

Sectors

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


Central American Markets for Biodiversity

Central American Markets for Biodiversity

http://www.proyectocambio.org/english/index.html

Project activities are designed to ensure that SMEs of Central America increasingly contribute to sustainable development and environmental protection, incorporating ways of addressing issues related to the loss of biodiversity in their business practices. The project removes barriers in banking, business, policy, and legislation to create an enabling environment that can catalyze biodiversity-friendly investments within sectors such as organic agriculture, sustainable forestry, agroforestry, silvopastoral systems, sustainable tourism, aquaculture certified, and sustainable fishery.
Finance Alliance for Sustainable Trade (FAST)

Finance Alliance for Sustainable Trade (FAST)

http://www.fastinternational.org/

FAST is an internationally focused, member driven, non-profit association representing financial institutions and producers dedicated to the sustainable production and trade of products.
European Investment Bank

European Investment Bank

http://www.eib.org/about/index.htm

The European Investment Bank (EIB) is the European Union's financing institution. Its shareholders are the 27 Member States of the Union, which have jointly subscribed its capital. The EIB's Board of Governors is composed of the Finance Ministers of these States. The EIB's role is to provide long-term finance in support of investment projects.
Measuring Up: Synchronizing Biodiversity Measurement Systems for Markets and Other Incentive Programs

Measuring Up: Synchronizing Biodiversity Measurement Systems for Markets and Other Incentive Programs

http://willamettepartnership.org/measuring-up

Emerging environmental markets, in tandem with existing incentive programs, have the potential to make effective contributions to conservation, but little is known about how these programs quantify biodiversity. This report, prepared for the U.S. Department of Agriculture (USDA) Office of Environmental Markets, focuses on two areas of action that could help improve effective investments for biodiversity:
  1. Standardizing systems for measuring the outcomes of current incentive programs, and
  2. Providing options for how federal agencies and others might support biodiversity incentives, particularly markets for biodiversity.
Biodiversity Quickscan (VBDO and CREM)

Biodiversity Quickscan (VBDO and CREM)

http://www.vbdo.nl/

A Dutch organization of investors for sustainable development. They developed a tool for the financial and food sectors that uses a number of steps to quickly measure the biodiversity impact of a company for the purpose of investment evaluation.

Choose another sector


Banking and Financial Services

Case studies
Tools and Mechanisms