Being at the top of the corporate food chain, financial institutions (banks, investors, insurers and reinsurers) can have significant indirect impacts on biodiversity and ecosystem services through their customers, and direct impacts through their purchasing decisions.
Now, in the build-up to Rio+20, a growing group of leading financial institutions are preparing to launch the Natural Capital Declaration, as a firm step towards a financial system that is more accountable in terms of the protection and sustainable use of nature. Signed by the CEOs of banks, investors and insurance firms, it demonstrates a far-reaching commitment from the sector to work towards embedding natural capital criteria into financial products and services, and supply chains.
Its launch also reflects broad and growing recognition that natural capital underpins the long-term health of the global economy, and by extension, the growth of businesses serviced by the financial industry. As one endorsing CEO puts it, “all companies are dependent on ecosystem services, either through their supply chains, around their operating sites or via their customers.”
Convened by the United Nations Environment Programme Finance Initiative (UNEP FI), the Global Canopy Programme (GCP), and the Fundação Getulio Vargas (FGV), the Declaration will be launched at Rio+20.
Starting late last year with endorsement by Rabobank (The Netherlands) and National Australia Bank, the Declaration already has the endorsement of 20 financial institutions in Australia, Ecuador, Guernsey, Italy, Mexico, the Netherlands, New Zealand, Paraguay, the British Isles and the US.
And although it is led by, and focused on, the finance sector, it has been welcomed by other stakeholders, including a number of leading international NGOs.
It was also recently hailed by the UK Sustainable Investment and Finance Association (UKSIF) as a ‘key investor initiative’ in the run-up to Rio+20.
Signatory institutions specifically commit to collaborate on a global scale with other stakeholders to:
1.Build an understanding of the impacts and dependencies of natural capital relevant to their operations, risk profiles, customer portfolios, supply chains and business opportunities;
2. Support the development of methodologies that can integrate natural capital considerations into the decision making process of financial products and services;
3. Collaborate with the International Integrated Reporting Committee (IIRC) and other stakeholders to build a global consensus around the development of integrated reporting, which includes natural capital as part of the wider definition of resources and relationships key to an organisation’s success; and
4. Work towards building a global consensus for the integration of natural capital into private sector accounting and decision-making supporting, when appropriate, the related work of the TEEB for Business Coalition, and other stakeholders.
This week, at the April informal informal negotiations on the zero draft of outcome document in New York, Mr Bas Rüter, Director of Sustainability of NCD signatory Rabobank, will be presenting the private sector view during the side event ‘Natural Capital Accounting: Better Decisions for Sustainable Development’ from 13:15- 14:45pm on 3 May in Room 3, North Lawn Building. The event is co-sponsored by Botswana, France, World Bank and UN-DESA.
The Natural Capital Declaration is the cumulative result of over 18 months of engagement with the finance community, and complements existing initiatives, such as the Principles for Responsible Investment, the Equator Principles, and the Principles for Sustainable Insurance.
For the full text of the Declaration, latest news, and updates on NCD events at Rio+20, please visit the website www.naturalcapitaldeclaration.com, join the LinkedIn group ‘Natural Capital Declaration’, or follow the NCD on twitter @NCDeclaration.
The Natural Capital Declaration – a statement by financial institutions for Rio+20