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August 11, 2023

7 ways to include nature in financial markets

Amazon rainforest waterfall
Amazon rainforest: the Taskforce on Nature Markets has proposed seven actions through which nature and equity goals can be incorporated into financial activity (Photo: Patrick Fort/AFP via Getty Images)

The Taskforce on Nature Markets has released a series of recommendations on how to account for nature and equity goals in financial activities, including the creation of an Opec-like structure.

As leaders of the eight countries sharing the Amazon forest met in Belém, Brazil, to discuss deforestation and the future of the region this week, the Taskforce on Nature Markets added an item to their summit’s agenda: finance.

In particular, the task force, which is supported by former US Treasury secretary Hank Paulson, indigenous leader Chief Almir Narayamoga Surui, and a number of other influential names, proposed seven actions through which nature and equity goals can be incorporated into financial activity.

These include a recommendation that central banks and financial supervisors “ensure that actions by financial actors, markets and systems are aligned with relevant government and international policy commitments on nature and climate”, and addressing nature crimes — which the task force says are the third largest source of illegal financial flows — “by establishing a requirement for investors and financiers to demonstrate a nature-crime free value chain”.

The task force also suggests the creation of “nature sellers’ clubs” to correct “the historic unsustainable extraction of under-priced nature from nature rich countries and from Indigenous Peoples and local communities”.

These coalitions would cooperate to “establish higher prices in return for guaranteed high integrity nature/ecosystem services in terms of equity and sustainability”, mirroring the structure of the Organization of the Petroleum Exporting Countries and a recent attempt by the Democratic Republic of the Congo to establish a sellers’ club for cobalt.

You can find out more about these and the other recommendations in the report, here.

A service from the Financial Times