A significant portion of UNEP FI’s work under this thematic is implemented through the Natural Capital Finance Alliance (NCFA). The NCFA was launched at the UN Conference on Sustainable Development (Rio+ 20 Earth Summit) in 2012 by UNEP FI and the UK-based non-governmental organisation, Global Canopy Programme (GCP). It is a worldwide finance led initiative to integrate natural capital considerations into financial products and services, and to work towards their inclusion in financial accounting, disclosure and reporting. Signatory financial institutions are working towards implementing the commitments in the Natural Capital Declaration through NCFA projects. These are overseen by a steering committee of signatories and supporters and supported by a secretariat formed of the UNEP FI and GCP.

What is Natural Capital?

The Natural Capital Finance Alliance defines natural capital as the stock of ecosystems that yields a renewable flow of goods and services that underpin the economy and provide inputs and direct and indirect benefits to businesses and society. From the perspective of the financial sector, natural capital is a subset of environmental, social and governance (ESG) factors that can be material to financial institutions, mainly through their allocations of capital to companies through loans and investments or premiums as part of insurance contracts.

What the NCFA is working towards?

The NCFA is an initiative that goes beyond ‘sustainability’. It is about the materiality of natural capital to the health of financial institutions and the finance sector. The NCFA proposes that natural capital-related risks are included in the financial metrics used by the private sector, where appropriate. We are not suggesting monetising or putting a monetary value on a hectare of tropical rainforest or a coral reef. We are looking to clarify how financial institutions are exposed to material natural capital risks through companies, and to encourage financial institutions to allocate capital to ‘natural capital positive’ business opportunities.


The initiative is governed by the NCFA Steering Committee.

Visit the Natural Capital Finance Alliance website.

  • Join a breakfast briefing in London to find out more about the new natural capital risk assessment guide

    Human activities are causing accelerating environmental change, notably in the form of climate change, pollution, and habitat loss. These changes are increasingly disrupting businesses’ operations and bottom line, with real implications for financial institutions’ portfolios. Join us for a breakfast briefing in London to discover why natural capital risk is a material concern for financial institutions as we launch our natural capital risk assessment guide developed under the Natural Capital Finance Alliance, in collaboration with PwC.

  • Launch of Natural Capital Credit Risk Assessment in Agricultural Lending Report

    The Natural Capital Finance Alliance will launch a new report: Natural Capital Credit Risk Assessment in Agricultural Lending on the first day of the Third Oxford Meeting on Food System Impact Valuation.

  • New Guide to Empower Banks To Assess Natural Capital Risk Launching in South Africa

    Johannesburg will see the African launch of the world’s first step-by-step guide to help banks conduct a rapid natural capital risk assessment by the Natural Capital Finance Alliance (NCFA).  The guide is produced in collaboration with global audit firm PricewaterhouseCoopers. The guide has already been piloted by five banks, including FirstRand Group and the Development Bank of Southern Africa and promotes the use of the […]

  • Webinar: Launch of natural capital risk tool and framework for financial institutions

    The Natural Capital Finance Alliance, funded by the Swiss State Secretariat for Economic Affairs (SECO) and the MAVA Foundation, has come up with tools and insights to help practitioners identify material natural capital risks and opportunities within their portfolios and integrate these considerations into financial decision making. The webinar will provide an overview of the recently launched ENCORE tool (Exploring Natural Capital Opportunities, Risks and Exposure). It also marks the official online launch of the NCFA’s latest report produced by PwC, which applies the ENCORE tool to develop a natural capital assessment framework for enhanced portfolio risk management in banks.

  • Join us for the launch of the Advancing Environmental Risk Management project

    Join us for the official launch of the Advancing Environmental Risk Management (AERM) project in Zurich. Find out more about practical tools and methodologies to incorporate natural capital assessment into existing finance sector risk management frameworks.

  • Making Financial Institutions more Resilient to Environmental Risks: Launch of Drought Stress Testing Tool

    In a pilot project on Environmental Stress Testing, the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the Natural Capital Finance Alliance (NCFA), have developed an analytical framework and tool that allows banks to quantify and assess the potential impact of drought events on the performance of their corporate loan portfolio. The project has been funded by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ).

    The tool will be launched at a series of events: 7th March in Mexico City, 10th March in Sao Paulo, Brazil, 14th March in Beijing, China, 17th March in New York, USA and 5th April in London, UK.

  • Beyond ‘Business as Usual’: Biodiversity Targets and Finance

    Download our report providing a pathway for financial institutions to start setting biodiversity targets in 9 critical sectors, and contribute to halting and reversing the biodiversity crisis.

  • Natural Capital Credit Risk Assessment in Agricultural Lending

    The report, ‘Natural Capital Credit Risk Assessment in Agricultural Lending’ is a new template that enables financial institutions to conduct natural capital credit risk assessment across different agricultural sectors and geographies, taking into account factors such as water availability, use and quality; soil health; biodiversity; energy use and greenhouse gas emissions. The new sector-specific guide […]

  • Integrating Natural Capital in Risk Assessments

    The report, ‘Integrating Natural Capital in Risk Assessments’ is a step-by-step guide to help financial institutions conduct a rapid natural capital risk assessment. The guide has already been piloted by five banks, and complements the recently launched ENCORE tool (Exploring Natural Capital Opportunities, Risks and Exposure), which enables financial institutions to understand and assess their exposure to natural capital risks. The guide helps banks […]

  • Exploring Natural Capital Opportunities, Risks and Exposure: A practical guide for financial institutions

    The world’s first comprehensive tool linking environmental change with its consequences for the economy has been launched by the Natural Capital Finance Alliance (NCFA). The web-based tool, called ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure), will help global banks, investors and insurance firms assess the risks that environmental degradation, such as the pollution of oceans or destruction of […]

  • Natural Capital Protocol – Finance Sector Supplement

    Launched in April, in Hong Kong, ‘Connecting Finance and Natural Capital: A Supplement to the Natural Capital Protocol’ is a tool for financial institutions to assess how their business is impacted by, and depends upon the natural world. The Natural Capital Protocol has created a globally recognized and standardized framework for business. This supplement to […]

  • Drought Stress Testing Tool

    The ‘Drought Stress Testing Tool’ enables banks to assess if a client may be at risk from drought and how drought can affect a sector or region. A clearer understanding of the risk associated with droughts can help build more resilient financial institutions, and by shifting finance to less vulnerable sectors and regions, economies can become […]