Guide to assess natural capital risk in the banking sector

Summary

PwC approached Little Blue Research (LBR) to provide natural capital expertise for the Natural Capital Finance Alliance setting out the material natural capital dependencies of 169 sectors of the global economy.

Client description

Natural Capital Finance Alliance and PwC

4 pilot banks in 3 countries

Capitals

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NATURAL

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Client need

PwC approached LBR to support the development of the world's first step-by-step guide for financial institutions to conduct a rapid natural capital risk assessment for the Natural Capital Finance Alliance as part of the development of the Exploring Natural Capital Opportunities Risks and Exposure (ENCORE) model. The aim of the guidance was to improve banks foresight by uncovering and exposing risk that would otherwise have been undetected. The work also aimed to enable banks to better monitor the evolution of natural capital risk.

The challenge

The results

Inputting into a global assessment of the materiality of natural capital dependencies for 169 sectors of the economy.

Defining and agreeing materiality criteria and assessment framework.

Pilot risk assessments for four banks including: portfolio assessment, assessment of specific transactions and evaluation of current risk processes in relation to natural capital.

Input into the ENCORE model by consolidating and checking descriptions of natural capital dependencies.

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