• F4B

The Dasgupta Review published


F4B welcomes the publication of the final report of Professor Sir Partha Dasgupta "Review on the Economics of Biodiversity".


The Review argues that biodiversity destruction puts economies, livelihoods and well-being at risk.


The report highlights the role of public and private finance in determining the stock of natural capital and the extent of human demands on the biosphere.


Its findings support the opportunity and imperatives that Finance for Biodiversity's argues for in Aligning Global Finance with Nature’s Needs.



It highlights the problem of unsustainable financial decision-making, noting that the world’s largest financial institutions provided more than US$2.6 trillion worth of loans and underwriting services to sectors which have been identified as primary drivers of biodiversity loss. Market prices of natural capital are far from their accounting prices.

there is little evidence that the financial capital allocation decisions of sustainable investors have led to significant positive environmental impacts to date



The report concentrates on the major public drivers of the economics of biodiversity; government subsidies, laws, regulations and fiscal systems. It also identifies three barriers within the financial system itself:


  • Biodiversity is not seen as material: Investment frameworks that if they are concerned with the environment at all are primarily concerned with the impact of the environment on financial returns, as opposed to the investment’s impact on the environment.

  • Damage to nature is not reflected in investment exclusion criteria: Exclusionary screening practices based on norms or specific ESG criteria have not included consideration of nature. In 2015, WWF set out the case that investors should exclude potential financial investments that may damage natural World Heritage Sites.

  • Lack of harmonisation and standardisation create barriers to investment aligned with nature:. There are currently no harmonised or standardised metrics for ESG factors which has led to a range of competing firms providing ratings and data on various indicators. A taxonomy approach has the potential to bring consistency to the way private and public financial actors assess environmental impacts


A focus only on ESG factors that may have a material financial impact does not systematically ensure that there is consideration of environmental impacts in all investment decisions.

It highlights opportunities to shift the financial system including:


  • Taxes, subsidies, regulations and prohibitions to Nature-specific mechanisms, such as payment for ecosystem services and biodiversity offsetting schemes.

  • Integrating nature into development finance and debt forgiveness

  • The creation of binding targets on public investments in natural capital to ensure that globally agreed objectives are met

  • Enhancing the understanding and awareness among financial institutions of nature-related financial risks, learning and building on the advances on climate-related financial risks.

  • Central banks and financial supervisors assessing the systemic extent of Nature-related financial risks underpinned by global standards

  • Development of standards for data that are both credible and useful for decision-making.

  • Businesses and financial institutions to integrate Nature-related considerations within their objectives and to assess and disclose their use of natural capital.

  • Integrating the protection of biodiversity with the fiduciary duties of institutional investors and asset managers.

  • Financial regulators and supervisors changing their own assessment horizons and using their regulatory powers.

  • Development of global, regional and national insurance funds for environmental disasters and a global risk pool to help protect vulnerable countries.

  • Empowering consumers to signal their distaste for investments that are rapacious in the use of Nature’s goods and services.

In response to the review WWF has called for the UK government to take the following actions:

  • Announce the UK’s support for the establishment of a new Global Commission on Economy and Nature (GCEN) at the G7 summit in June 2021, to provide a mechanism to drive forward a coordinated global response to the review, and to champion it internationally.

  • Incorporate climate and nature goals into economic, fiscal and budgetary policy, by announcing the introduction of a new sustainability and resilience-oriented UK fiscal policy goal in the 2021 budget. Steps should also be taken to reduce the UK’s environmental impacts, by applying a ‘net zero test’ to the 2021 public spending package.

  • Align financial sector regulation with climate and nature goals. The UK must start by making it mandatory for financial institutions to publish a plan for how they will align investment/lending activities with the Paris Agreement goals (net zero), and by supporting the development of frameworks to encourage the private sector to incorporate nature-related issues/risks into decision-making. 

  • Promote the greening of sovereign debt markets in a way that helps protect biodiversity and support a green and just recovery from the pandemic, including by championing nature-performance bonds at the G7 in June 2021 and supporting a facility to promote their implementation globally.