The agricultural sector is one of the sectors most exposed to environmental risk caused by climate change and human degradation of ecosystems. To enable 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 Natural Capital Finance Alliance has developed a template. The new sector-specific guide is consistent with the leading international standard for including natural capital in business decision-making, the Natural Capital Protocol and complements the Natural Capital Finance Alliance’s new ENCORE tool and step-by-step guide to incorporating natural capital into bank’s risk management processes.

The approach was developed by Dr Francisco Ascui (Senior Lecturer in Business and Climate Change at the University of Edinburgh Business School) and Theodor Cojoianu (Marie Curie and IRC Fellow at the Michael Smurfit Graduate Business School, University College Dublin) in response to growing demand for better frameworks to assess natural capital risks in key sectors of the economy.

A healthy environment is the best foundation for economic prosperity, human health and well‐being. Food production already uses 50 per cent of the world’s total habitable land, and adequately feeding 10 billion people by 2050 will require a further 50 per cent increase in food production. Land degradation and desertification have increased, with land degradation affecting approximately 29 per cent of global land, where some 3.2 billion people reside. Agriculture is therefore both fundamentally dependent on the environment, and a leading driver of environmental impacts.

Download the guide here.


About NCFA

The Natural Capital Finance Alliance (NCFA) is a finance sector-led initiative, providing expertise, information and tools on material aspects of natural capital for financial institutions. It works to support these institutions in integrating natural capital considerations into their risk management processes and products as well as helping them to discover new opportunities. The NCFA secretariat is run jointly by the UN Environment Finance Initiative and Global Canopy.