This book analyzes the financial implications of biodiversity loss and the critical role banks play in both amplifying and mitigating this risk. Drawing on recent academic contributions, central bank reports, and empirical insights, the book frames biodiversity loss as both a source of physical and transition risk, and a driver of financial contagion through disrupted supply chains, asset devaluation, and credit defaults in nature-dependent sectors. The volume describes banking exposure to biodiversity-related risk and evaluates existing tools to measure and manage this exposure, including biodiversity-adjusted ESG ratings, Corporate Biodiversity Footprints (CBF), and the TNFD framework. It then turns to the transformative role that banks can play, through conditional lending, biodiversity-linked instruments, and stewardship strategies, in reversing ecological harm and supporting nature-positive transitions. Targeted at scholars, regulators, and financial practitioners, this book provides a novel framework for integrating biodiversity risk into financial decision-making, prudential supervision, and impact finance. It concludes with actionable policy recommendations and an agenda for future research on nature-related financial risks.

Autorentext

Giuseppe Rimo is a Research Fellow at the Alma Mater Studiorum University of Bologna, Italy. He earned his PhD at the University of Salento, Italy, with a dissertation on biodiversity loss and banks’ financial stability. His research interests include emerging risks in the banking sector, biodiversity finance, and corporate governance. Simona Cosma is an Associate Professor at the Alma Mater Studiorum University of Bologna, Italy. She earned her PhD at the University of Rome Tor Vergata, Italy, with a dissertation on operational risk measurement techniques. At the University of Bologna, she teaches risk management, economics of insurance companies, and financial instruments and markets. Her research interests are in risk management of financial institutions, sustainable corporate governance, and sustainable finance.

Inhalt

1. Introduction.- 2. BiodiversityRelated Risks: Impacts, Dependencies And Regulation.- 3. Banking Activity In The Age Of Biodiversity Risk: Insights From Academic Literature.- 4. Quantifying Biodiversity Exposure: Metrics, Methods, And Limitations.- 5. The Role Of Banks In Halting Biodiversity Loss.- 6. The Effect Of Biodiversity And Environmental Risks On Banks' Performance.- 7. Conclusions.