National Australia Bank: key customers vulnerable to loss of natural capital
Natural Capital Declaration webinar explains relevance to financial institutions
Today, National Australia Bank (NAB) explained in a webinar that it signed the Natural Capital Declaration (NCD) due to the vulnerability of banks and their customers to the world’s mounting loss of natural capital.
Rosemary Bissett, Head of Sustainability Governance and Risk at NAB, described efforts within the Bank to consider and raise awareness of the risks and opportunities associated with that loss.
Bissett said: “A number of NAB’s key customer segments, such as agribusiness and energy utilities, are vulnerable to the decline in natural capital. If these customers don’t manage their businesses well in terms of natural capital, that could affect how viable they are.
“For example, coal-fired power plants need water, and we’re seeing risks to power supplies because of the impact on ecosystem services such as the supply of water. Agribusiness is also vulnerable to the decline of natural capital, and it gets that – it’s intuitive. Consideration of natural capital is important for our and our customers’ business.”
Bissett reported that NAB will be ‘immersing’ its managers in experiences that will help them understand natural capital, as part of a range of measures to implement the concepts highlighted within the Declaration.
Kookie Habtegaber, Project Management Coordinator for the Natural Capital Declaration, announced the first ten financial institutions to endorse the Declaration, the first two of which were NAB and Rabobank.
Ivo Mulder of UNEP Finance Initiative, one of the Declaration’s three convenors, said: “It’s becoming clearer and clearer that natural capital underpins economic growth. And being at the top of the corporate food chain, financial institutions have significant natural capital footprints, for example through purchasing decisions.”
Andrew Mitchell, Executive Director of the Global Canopy Programme, another NCD convenor, described the relevance of natural capital to financial institutions, citing some of the reputational and regulatory risks of not taking account of natural capital.
Mitchell said: “Natural Capital means everything from clean air to clean water – products and services provided by nature that we’ve taken for granted throughout history. But our use of natural capital is not priced into the goods we buy, including financial goods and services – instead it’s called an ‘externality’. The Declaration is saying: let’s work out the methodology to include natural capital in investment and lending decisions, and let’s set up the enabling framework to implement it.
“There is a lot of investment in major agricultural expansion of soy, beef, palm oil and other commodities, and the financial industry plays a role in that. There needs to be greater consideration of natural capital in investment and lending decisions.
“Not doing so leaves the financial industry vulnerable to risks, for example the risk of restrictions on the use of illegally produced commodities such as timber, and reputational risks – you could end up with Greenpeace hanging off your building.”
There will be a repeat webinar tomorrow (7 March) at 15:00 CET, this time featuring a presentation from Rabobank on why it signed the Natural Capital Declaration. Participants can ask questions during the session. To register, click here.
Follow the seminars and the Natural Capital Declaration on Twitter: @NCDeclaration
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