A supervisory framework for assessing nature-related financial risks

About this Report

OECD | September 2023

Better assessing biodiversity-related financial risks is particularly timely in the context of the goals and targets (for 2050 and 2030 respectively) adopted under the Global Biodiversity Framework. In particular, Target 15 calls on governments to take measures “to encourage large and transnational companies and financial institutions to regularly monitor, assess and transparently disclose their risks, dependencies and impacts on biodiversity.”

This paper presents a methodological supervisory framework to help central banks and financial supervisors assess biodiversity-related financial risks, impacts and dependencies in the financial sector, including transmission channels for physical and transition risks. This framework is designed to translate biodiversity risks into financial risks. It draws on a previous mapping of existing approaches, while also accounting for broader nature-related financial risks. While acknowledging different national circumstances, this methodological framework is designed to be applicable broadly for central banks, supervisors and commercial banks across different countries.

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