The science is very clear that the biodiversity crisis and species extinction are as big a threat to our existence as the climate crisis. A new report, Bankrolling Extinction, shows how financial institutions are fueling the freefall of biodiversity.
In 2019, the world’s 50 biggest banks provided $2.6 trillion in loans and other credit to sectors with a high impact on biodiversity, such as forestry and agriculture. The report authors found that bankers had a “cavalier ignorance of – or indifference to – the implications, with the vast majority unaware of their impact on biodiversity.”
Influential thought leaders are urging the financial industry and governments to restrict the flow of capital to the carbon economy and help slow down the climate crisis.
Mark Carney, former governor of the central banks in England and Canada and a UN advocate on climate change, is calling for the finance industry to change their business models to recognize the risks of the carbon economy and the climate crisis. He has also called for CEO compensation to be tied to performance against the Paris climate goals.
Carney joins Sir David Attenborough and influential finance leaders in a powerful documentary called Our Planet: Too Big To Fail, designed to persuade the finance industry to be part of the solution. The new film, co-produced by the World Wildlife Fund and Jeremy Coller, Founder of the FAIRR investor coalition, lays out five ways the finance industry can help solve the climate crisis.
The influential scientist Sir Robert Watson has a three-part plan to tackle the issue. (Watson is the former chair of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), and former chair of the Intergovernmental Panel on Climate Change). He says governments should first set an example in biodiversity-positive finance, by diverting harmful agricultural subsidies to promote a shift to less damaging activities.
Watson says that “agriculture is the leading cause of biodiversity loss today.” Agricultural subsidies, at $450 billion annually, are harmful to biodiversity and exceed the cost of paying farmers to use nature-friendly practices. Watson says that diverting harmful subsidies to pay farmers to protect biodiversity can lead to a net saving.
Second, governments should direct their development banks, which invest $2 trillion globally a year, to use their cash and influence to become global role models for reporting and reducing their impacts on biodiversity. And third, financial regulators and central banks could make biodiversity-risk-reporting a condition of licensing financial institutions.
100 influential environmentalists including Dr. Jane Goodall and Bill McKibben, founder of 350.org, recently called for the world’s top banks – including the IMF, World Bank and commercial banks — to stop funding factory farms due to the environmental damage inherent in the industrialized animal agriculture system, and the industry’s role in past and future pandemics from zoonotic sources.