Home Banking Development banks linked to nature loss worth $800 BLN per year

Development banks linked to nature loss worth $800 BLN per year

Every year, the investments made by public development banks around the world could destroy nature worth $800 billion. Stating this, the researchers urged that there is greater testing and transparency of the institutions. And, that lends to reduce the risks to biodiversity. Researchers estimated potential damage to nature from the banks’ financing could cost society $800 billion annually.

F4B chair Simon Zadek said that the research measured nature-related risks, meaning the potential for activities backed by the banks to harm nature. And or, conversely how their reliance on plants, animals, etc., could cut the value of their investments. The banks are lending to nature-sensitive sectors such as food, mining and infrastructure. In infrastructure construction, mining or agriculture, surrounding areas could be destroyed. This leads to pollution of local water supplies, said Zadek. A major meat producer in Brazil or a palm oil company in Liberia could be profiting from operations supported by public development banks. He added that it may be even on illegally deforested land.

In managing their relationship with nature, as per the report, many public banks are developing. Investments highly dependent on nature which are already vulnerable include those in the fishing industry. Although development banks do follow environmental safeguards. It urged public banks to conduct and publish, within the next 12 months. Public banks are owned by governments at international, regional and national levels. 10% of global investment, ar mad up by their assets.

Examples are such as the World Bank, the Inter-American Development Bank, the Asian Development Bank and China Development Bank. Wealthy G7 governments are especially influential shareholders in these institutions. G7 leaders pledged to protect at least 30% of their land and oceans by 2030. F4B ambassador Jeremy Eppel said that these publicly-owned banks should be fulfilling their mandate to foster development. And that too in a way that protects the environment. It is now time for these (G7) governments to use their influence and powers to ensure nature is considered across the work of these development banks.

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