
Let's discuss nature with climate: Engagement guide
This guide supports investors in integrating nature and climate considerations into investment strategies. It offers insights and frameworks for addressing the interconnected challenges of climate change and biodiversity loss, promoting holistic and sustainable investment approaches.
Please login or join for free to read more.

OVERVIEW
Overview
The guide equips financial institutions to engage portfolio clients and investee companies on integrating nature-positive actions with climate commitments. It highlights critical issues such as the 69% decline in animal populations since 1970 and ecosystem disruptions contributing 5.8 billion tonnes of CO2 annually. The guide underscores finance’s role in addressing these dual crises.
Why: The business case for action
Nature loss presents material risks, including operational, regulatory, and reputational threats. For example, droughts impacting the Panama Canal increased shipping costs by 36%, while deforestation in the Amazon shifted it to a carbon emitter. Addressing these risks offers opportunities, such as Belize’s $364 million debt-for-nature swap. The World Economic Forum projects $10.1 trillion in economic value and 395 million jobs by 2030 from nature-positive actions.
How: Leveraging climate action
Climate stability and biodiversity protection are deeply interconnected. Climate mitigation supports ecosystem services, while protecting biodiversity enhances carbon sequestration. The guide advises financial institutions to integrate nature-related risks into climate strategies using frameworks like the Taskforce on Nature-related Financial Disclosures (TNFD) and Kunming-Montreal Global Biodiversity Framework. This dual approach strengthens risk management and aligns with global goals.
What: Evolving Engagement Approaches
The guide introduces a five-phase engagement framework:
- Set the scene: Introduce nature topics into climate discussions.
- Assess: Evaluate clients’ nature-related risks and dependencies.
- Design: Assist clients in creating nature-positive transition plans.
- Support: Develop financial and non-financial solutions.
- Review: Monitor progress and adapt strategies for systemic change.
Set the scene
Financial institutions are encouraged to position themselves as trusted advisors by initiating discussions on nature-related risks and opportunities. Foundational elements include understanding the interplay between climate and nature and aligning strategies with existing climate efforts.
Assess
Institutions are advised to leverage existing climate data to evaluate nature-related risks and dependencies, analysing impacts along value chains. Collaboration with internal teams and clients is essential for aligning strategies with broader sustainability goals.
Design
Support clients in developing science-based nature-positive strategies aligned with climate goals. This includes setting measurable metrics, identifying financing needs, and linking to collective efforts. For example, Nespresso built on its climate initiatives by addressing deforestation and agrochemical pollution through biodiversity goals.
Support
The guide emphasises innovative financial solutions, such as sustainability-linked bonds and loans, to meet transition goals. Non-financial support, such as connecting clients to resources and sector coalitions, complements these efforts. Belize’s debt-for-nature swap and Coca-Cola’s water regeneration efforts serve as illustrative case studies.
Review
This phase involves monitoring client progress, consolidating insights, and adapting solutions to evolving needs. Financial institutions should share learnings internally, refine engagement strategies, and escalate actions for clients who fail to progress on nature goals.
Sector-specific focus
The guide highlights eight sectors, including agriculture, chemicals, and forestry, as priorities for addressing biodiversity loss. Financial institutions should target these sectors for maximum impact.
Regulatory momentum
Key frameworks like the Kunming-Montreal Global Biodiversity Framework, EU Corporate Sustainability Reporting Directive (CSRD), and Sustainable Finance Disclosure Regulation (SFDR) drive the integration of nature-related considerations in financial decision-making.
Barriers and solutions
Challenges such as varying client maturity, sector complexities, and data gaps are acknowledged. Strategies to address these include capacity building, aligning incentives, and embedding sustainability into internal systems and product development.
Capacity building and incentives
Education and training are essential for empowering client-facing staff to engage on complex nature-related topics. Aligning incentives with long-term sustainability outcomes ensures these goals remain a priority.
Conclusion
The guide calls for urgent action to address the intertwined climate and biodiversity crises. Financial institutions are uniquely positioned to catalyse systemic change, fostering a nature-positive economy through innovative solutions and meaningful client engagement. By integrating nature into existing frameworks, institutions can future-proof portfolios while addressing global sustainability challenges.