New guide to empower banks to assess natural capital risk in South Africa
Johannesburg will see the African launch of the world’s first step-by-step guide to help banks conduct a rapid natural capital risk assessment by the Natural Capital Finance Alliance (NCFA). The guide is produced in collaboration with global audit firm PricewaterhouseCoopers.
The guide has already been piloted by five banks, including FirstRand Group and the Development Bank of Southern Africa and promotes the use of the recently launched ENCORE tool (Exploring Natural Capital Opportunities, Risks and Exposure), which enables financial institutions to understand and assess their exposure to natural capital risks. For example, it highlights how sectors such as agriculture rely on pollination, or how metal processing depends on maintaining ground water provision.
The guide aims to fully unlock the power of ENCORE and, as part of the Advancing Environmental Risk Management (AERM) project, help global banks to better predict how the degradation of nature might affect their financial future. AERM is a wider project by NCFA to help financial institutions understand and integrate the risks they face because of environmental degradation in their risk assessment methods and decision-making tools.
The guide also includes case studies of how financial institutions globally are using the power of ENCORE to assess their dependence on nature.