August 3, 2020

The emergence of foreseeable biodiversity-related liability risks for financial institutions: A gathering storm?

Recent economic literature identifies liability as a key category of foreseeable financial risk associated with biodiversity loss. However, it has not, to date, provided further guidance on the nature and extent of litigation and legal risks that should be considered in determining the potential materiality of relevant risks for a given financial actor or system. This report complements and extends the economic literature by proposing a framework by which biodiversity-related liability risks should be considered by financial sector supervisors and participants in their broader assessment of biodiversity-related financial risks.