Biodiversity offsets and the mitigation hierarchy: a review of current application in the banking sector

 

All businesses, irrespective of their size, sector and location, depend, and consequently have an impact, on biodiversity and ecosystems. Whilst some industries have a direct impact on biodiversity, others are reliant on ecosystem services to support their supply chain. Through its investments and loans to these businesses, the financial industry has an indirect but influential link to biodiversity issues in these and other sectors.

 

This study was jointly commissioned by the United Nations Environment Programme Finance Initiative (UNEP FI) and the Business and Biodiversity Offsets Programme (BBOP), to explore the following themes:

  • Familiarity and awareness among the financial sector of the biodiversity ‘mitigation hierarchy’, a tool which aims to help manage biodiversity risk and is commonly applied in Environmental Impact Assessments (EIAs), and biodiversity offsets;
  • Corporate policy approaches of banks in understanding and addressing biodiversity issues;
  • Roles and responsibilities within banks relating to the management of biodiversity risks and opportunities; and
  • The extent to which tools, resources and training are used in the management of biodiversity risks and opportunities.

 

The PwC Sustainability & Climate Change team was selected to conduct analysis based on 28 discussions with banks, environmental consultants, NGOs and bank clients.