Nature-related Financial Risks: a Conceptual Framework to guide Action by Central Banks and Supervisors

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Network for Greening the Financial System | July 2024

The NGFS Conceptual Framework on nature-related financial risks provides a comprehensive guide for central banks and supervisors to navigate the complex challenges posed by the interaction between nature, climate, and the economy. This framework emphasises the critical need for policies that address both climate change and nature degradation in conjunction with each other, recognizing that actions to address climate change will fall short without considering nature. The report aims to enhance the understanding of nature-related risks and their implications for the economy and financial system, urging central banks and supervisors to assess and address nature degradation proactively. By offering a common understanding of these risks and providing illustrative cases on freshwater and forest ecosystems, the NGFS Conceptual Framework sets the stage for continuous knowledge development and experience in this vital field.

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