Assessing the Materiality of Nature-Related Financial Risks for the UK

Gfi Report

Green Finance Insitute, April 2024

This report presents the first quantitative evidence of the economic risk posed by nature degradation and the erosion of ecosystem services, both domestically and internationally, to the UK economy. Publicly available Bank of England data was used as the basis for the analysis in addition to publicly available Pillar 3 reporting from the seven largest UK banks. The analysis aimed to investigate whether nature degradation and the erosion of ecosystem services poses a material risk to the UK economy and UK financial stability, and, where possible, to also capture transition risk in addition to physical risk.

The project was developed by the Green Finance Institute (GFI), with analysis undertaken by the Environmental Change Institute at the University of Oxford, the University of Reading, the UN Environment Programme World Conservation Monitoring Centre (UNEP-WCMC) and the National Institute of Economic
and Social Research (NIESR). The analysis benefited from the direction of an Advisory Committee that included representatives from the
Department for Environment, Food and Rural Affairs (DEFRA), the Financial Conduct Authority (FCA), HM
Treasury, and the Taskforce for Nature–related Financial Disclosures (TNFD).

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