Menu

Global Survey of Nature Risk Management
at Financial Firms


2024: A Discipline in Its Infancy

 

April 16, 2024

Nature loss has a profound impact on the economy and is a source of significant risk for financial institutions. Moreover, nature’s resilience is vital in the battle against climate change. With nature risk management in its very early stages there is still significant work that needs to be done. 

To better understand how the risks and opportunities are being managed in today's economic landscape, GARP undertook its first-ever global study of nature-related financial risk management across financial firms. Surveying a total of 48 firms, GARP’s new report offers a useful snapshot of current risk management practices across the financial services industry, while also helping firms prioritize areas to improve upon along their nature risk journey.

 

Key Takeaways:

  • There is a growing regulatory focus on nature risks, with 31% of firms reporting that their regulators have published formal expectations for nature risk management and another 13% expecting their regulators to do so.
  • Nearly half of the boards in our sample have oversight of nature-related risks and opportunities, with most of the remaining firms working or intending to work on this.
  • Nature risk is relatively new for many firms and levels of expertise are far lower than for climate risk, with over 40% of firms still currently investigating whether it should even be treated as a risk.
  • Just 17% of firms are using metrics, targets, or limits to assess drivers of nature-related risks, with another 13% implementing them now.
  • Nature-risk staffing and training is on the rise, with around half of firms offering nature-risk training to some functions and 13% of firms offering it to their entire staff.

 

About the authors

Jo Paisley, President, GARP Risk Institute, has worked on a variety of risk areas at GARP Risk Institute, including stress testing, operational resilience, model risk management, and climate and environmental risk. Her career prior to joining GARP spanned public and private sectors, including working as the Director of the Supervisory Risk Specialist Division within the Prudential Regulation Authority and as Global Head of Stress Testing at HSBC.

Dr Maxine Nelson, Senior Vice President, GARP Risk Institute, currently focuses on climate and environmental risk management. She has extensive experience in risk, capital, and regulations gained from a wide variety of roles across firms including Head of Capital Planning at HSBC. She also previously worked at the UK Financial Services Authority, where she was responsible for counterparty credit risk during the last financial crisis.

GRI_SurveyThumb

Want to read more?

Download the Full Report Now!

We are a not-for-profit organization and the leading globally recognized membership association for risk managers.

weChat QR code.
red QR code.

BylawsCode of ConductPrivacy NoticeTerms of Use © 2024 Global Association of Risk Professionals