Nature loss is increasingly recognised as a material financial issue, creating both risks and opportunities for banks. Our new publication outlines practical ways for financial institutions to integrate nature considerations into decision-making and financing activities through circular economy approaches.
More than half of global GDP, equivalent to approximately USD 44 trillion, is moderately or highly dependent on nature and the ecosystem services it provides.[1] At the same time, nature-related financial risks are gaining regulatory attention, with at least 29 jurisdictions representing more than USD 77 trillion in banking assets considering such risks within prudential frameworks.[2]
The report, Circular Solutions to Achieve Nature Targets, explores how the linear “take-make-waste” economy contributes to biodiversity loss, pollution and ecosystem degradation, while highlighting opportunities to address these challenges through more circular and resource-efficient business models. By reducing resource extraction, waste and pollution while supporting the regeneration of natural systems, circular solutions can contribute to positive outcomes for nature, climate and long-term economic resilience.
Aimed primarily at commercial banks, particularly signatories to the Principles for Responsible Banking (PRB), the publication focuses on three ecosystems: ocean and marine, freshwater and terrestrial & land ecosystems. It helps institutions address nature-related impacts and dependencies by integrating circular economy considerations into governance, policies and processes, risk management, sector strategies, client engagement, financing decisions and stakeholder relationships.
The guidance encourages banks to work with clients to incorporate circularity into transition plans, lending and investment policies and nature-related strategies and targets. It also helps identify opportunities to finance circular business models that contribute to positive outcomes for nature while strengthening long-term portfolio resilience.
To support implementation, the publication includes examples of high-impact sectors for portfolio screening and prioritisation, practical actions banks can take across their operations and portfolios and real-world case studies illustrating emerging banking practices across the three ecosystems.
Developed through UNEP FI’s Circular Economy-Nature Nexus workstream, with contributions from member banks and experts from industry and academia, the publication is designed to be adapted to local contexts, including varying regulatory environments, data availability and ecosystem conditions. The guidance can also support implementation of PRB nature targets.
- Download the guidance here.
To understand the interlinkages between circularity and climate, nature, pollution and inclusive economies, as well as with the four Principles for Responsible Banking action categories (internal policies, client engagement, portfolio, advocacy), please consult the Circular Economy as an Enabler for Responsible Banking series, including the report Circular Solutions to Achieve Climate Targets and supplements on the agrifood, buildings and construction, and textile sectors.
[1]World Economic Forum (2020). Nature Risk Rising. Available at: weforum.org/publications/nature-risk-rising-why-the-crisis-engulfing-nature-matters-for-business-and-the-economy/
[2] UNEP FI, WWF (2024). Navigating Nature-related Regulations for Banks: Mapping the Policy Landscape. Available at: unepfi.org/industries/banking/navigating-nature-policy/
