Nature loss, such as biodiversity decline, water stress, and soil degradation, creates material financial risks that directly affect the performance, asset values, and long-term financial stability of financial institutions’ clients. Managing nature-related risks therefore goes beyond reputational or regulatory considerations; it is essential to ensuring the long-term resilience of financial institutions. 

This guidance, co-developed with Equator Principles, supports project-related financing teams as well as risk professionals within financial institutions, particularly banks, by outlining how to conduct nature-based risk assessments at the corporate, portfolio and project levels using existing frameworks and tools. It highlights how nature-based risk assessments can improve risk identification, strengthen due diligence, enhance collaboration with clients, and enable better decision-making across project finance and portfolios.

This guidance contributes to UNEP FI’s work by helping financial institutions align with emerging global frameworks, such as the Kunming–Montreal Global Biodiversity Framework, Taskforce on Nature-related Financial Disclosures, and Science Based Targets Network. It complements UNEP FI’s initiatives such as the Risk Centre and the Principles for Responsible Banking by providing a practical, step-by-step approach that enables institutions to develop credible nature-based risk assessments and implement them over time, leading to meaningful action for business resilience and positive nature outcomes.