On September 20, 2023, the European Investment Bank (EIB) announced that it was developing a methodology to assess its clients’ exposure to nature-related impacts and risks. The EIB reinforced its commitment to address biodiversity loss and the threats posed by climate change and presented the measures at events taking place during the United Nations General Assembly held in New York between September 18-22, 2023.
The EIB stated that it recognizes the pressing threats that climate change poses to biodiversity and ecosystems. As a result, the Bank is implementing measures to assess and manage these risks, which will play a pivotal role in shaping future investments and support for biodiversity. The bank’s Vice President, Ambroise Fayolle, unveiled the EIB's "nature-positive" framework, emphasizing the importance of supporting investments that protect biodiversity and manage risks associated with threats to nature and biodiversity. To understand and manage the financial risks associated with biodiversity loss and ecosystem degradation, the EIB is developing a biodiversity risk screening system. This system will evaluate financial risks within the EIB's portfolio and at the counterparty level. It is expected to be finalized in 2024, with implementation for EIB counterparties scheduled to commence in 2025.
In a related initiative, the EIB has also announced its intention to collaborate with Multilateral Development Banks (MDBs) to shape its approach to the impact its projects have on biodiversity. In 2021, numerous MDBs collectively adopted the "Joint MDB Statement on Nature, People, and Planet," demonstrating their commitment to nature conservation. The collective effort aims to protect and support nature while simultaneously managing the risks associated with biodiversity loss in EIB projects.
Taking the Temperature: The steps taken by the EIB build on its earlier joint announcement with the European Commission to jointly provide €18 billion in funding to finance projects covering a variety of climate-related issues, including an initiative to reverse deforestation, as we reported on in April. We have also previously discussed how the EIB is working with the European Commission to enhance public and private investment in and financing of strategic net-zero technology projects within the InvestEU Program.
MDBs are considered to be key to combating climate change and loss in biodiversity. To achieve these aims, MDBs will need to be able to identify, track and maximize the potential of nature-positive investments, assess nature-related risks and approaches, and identify opportunities for valuing nature in economic planning and decision making. As we reported in February, U.S. Treasury Secretary Janet Yellen urged the World Bank to “evolve” and be “bolder and more imaginative” in its operational approach to tackling global challenges such as climate change.