Devising Nature-Aligned Finance

Authors: Jose Luis Resendiz (University of Oxford), Fran├žois Cohen (University of Barcelona)
Presenter: Jose Luis Resendiz (University of Oxford)
Abstract: This paper presents a novel approach, Natural-Aligned Finance, to foster Natural Capital Accounting (NCA) adoption in decision-making, driving financial flows towards nature recovery targets following NCA standards. Addressing obstacles and research gaps in NCA implementation in the financial sector, the study assesses public and private institutions’ readiness via a comprehensive global expert survey on nature-related impacts, dependencies, and data analytics experience. A total of 613 responses were gathered, and we utilized a sample selection model in the survey design to correct self-selection bias and mitigate potential disparities in opinion between respondents and non-respondents. Findings indicate stakeholder willingness to adopt this approach, particularly with regional or national nature positive target support. Three critical factors for promoting Natural-Aligned Finance adoption are identified: government stewardship of public and private data provision, corporate nature recovery plans, and increased sustainability-linked finance issuance. This research provides valuable insights for policymakers, financial institutions, and corporations aiming to incorporate environmental sustainability in their decision-making processes.
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