Monetizing biodiversity, banks hire senior ESG figures

Roles dedicated to nature, biodiversity and sustainability to make themselves “responsible” for the ongoing financial change

Banks are hiring senior ESG roles within their organizational realities. The assumption emerges from the desire to monetize biodiversity by investing in financial innovation. Compliance with European parameters is a warning throughout the world that aims to make more attractive those companies that are able to evaluate the risks and incentivize those who “produce” or defends sustainabilityBanks are hiring senior ESG roles within their organizations. The assumption emerges from the desire to monetize biodiversity investing in financial innovation. Relative respect for European parameters it is a warning throughout the world that aims to make more attractive those companies that are able to evaluate risks and incentivize those who “produce” or defend sustainability.

As Bloomberg reports, in fact, the banks that are making these acquisitions range from London to Wall Street and are JPMorgan Chase & Co., Lloyds Banking Group Plc, NatWest Group Plc and Standard Chartered Plc.

The role of banks

More and more roles related to nature and to biodiversity: these are senior figures who will be responsible for the change underway and towards which banks and other companies have focused their attention. “It will become a scalable model once we can break down the big numbers into predictions of a specific market or business opportunity growth, both from a solutions and enterprise perspective,” Gwen Yu told the blog , head of biodiversity, newly hired at JPMorgan.

In 2021, Credit Suisse, for example, became the first bank to design i debt-for-nature. They are climate swaps and imply agreements that allow a country, basically rich in nature and biodiversitybut which over time has accumulated huge debts at an international level, to restructure its debt by repurchasing it and placing it again on the market.

Since then, banks have been lining up to make deals in this direction, such as Barclays Plc, which is among the global banks that estimates it will reach $800 billion in this market alone.

At the same time, a growing number of investors have begun to delve deeper rewilding projects. This term refers to the form of ecological restoration aimed at increasing biodiversity and restoring natural processes. It differs from other forms of ecological restoration in that rewilding aspires to reduce human influence on ecosystems by contributing – in the case of the banks’ commitment – to generating a new market for so-called biodiversity credits.

A survey of investors conducted by Morgan Stanley showed that 72% globally are “very” or “somewhat” interested in their portfolios taking into account nature and biodiversity risks. The main concern is water solutions, for 74% of investors. According to the World Economic Forum, the market for such securities could reach almost $70 billion by 2050.

New roles for biodiversity

In the UK, Lloyds appointed Katie Leach as its first nature manager last year. Formerly head of the United Nations Environment Program and biodiversity lead at ShareAction, a London-based non-profit, Leach said the financial sector is “starting to understand that it plays a really critical role in addressing the loss of nature together with climate change”.

Other examples from the banks mentioned above include StanChart hiring Oliver Withers as head of biodiversity in a similar role at Credit Suisse last year, and which has since been absorbed by UBS Group AG. As well, NatWest has appointed Rhona Turnbull, a former Royal Bank of Scotland banker who also worked in the British navy, as head of nature. Others that are creating similar roles include Lombard Odier Investment Managers, which recently appointed Marc Palahi as its chief nature officer. Previously, he worked at the European Forestry Institute.

European attention

“A warmer climate and the degradation of natural capital they are forcing change in our economy and our financial system. We must understand and keep pace with this change to continue to fulfill our mandate – said ECB President Christine Lagarde -. By broadening and intensifying our efforts we can better understand the implications of these changes and, in doing so, help sustain stability and support the green transition of the economy and financial system.” To this end, concrete measures have been agreed which are based on pillars of sustainability, transparency and attention to investments and consumer protection that show their commitment to nature.