Embedding environmental risk in finance: Current methods and ongoing challenges

embedding

Embedding environmental risk in finance: Current methods and ongoing challenges

embedding
By combining desktop analysis, survey results, and workshop data from the United Nations Environment Programme Finance Initiative (UNEP FI) network, we provide an overview and analysis of the current suite of environmental risk management tools and guidelines in this paper. It focuses specifically on those that address biodiversity and ecosystem services as well as water-related risks by exploring who they service and locating gaps in service in an effort to help lenders and investors understand weak spots.
Significant challenges remain to embedding a growing market for innovative environmental risk frameworks into existing financial processes such as credit risk analysis and investment decision making. Despite the many significant and apparent barriers to their implementation, the paper suggests a number of internal and external steps that finance institutions could take to foster a deeper operationalization of environmental risk into the sector as a whole. Read More

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