On 2 July 2024, the Network for Greening the Financial System (NGFS) published two complementary reports on nature-related risks:

This report covers key emerging trends related to nature-related litigation, including cases concerning biodiversity loss, deforestation, ocean degradation, carbon sinks and plastic pollution, and explores the potential relevance for central banks, supervisors and the financial system.

Among other things the report identifies the growth of strategic nature-related litigation. Strategic litigation is aimed at achieving the protection of nature itself, and of the planetary boundaries which safeguard human existence on Earth, rather than focusing on a narrow issue or single site. In other words, such litigation seeks to safeguard nature’s ability to provide the ecosystem services on which humanity depends. It is being used by litigants as a tool to influence policy and regulatory outcomes, as well as to change broader corporate and societal behaviour.

This report presents a final version of the Conceptual Framework for nature-related financial risks, which aims to guide policies and action by central banks and financial supervisors. It includes two illustrative cases which demonstrate how this framework can be applied in practice.  

The Conceptual Framework is also complemented by the NGFS Technical Document on Nature Scenarios. This document contains further information on methodologies to identify relevant forward-looking physical and transition shocks, as well as detailed information on models that can be used to assess the economic and financial risks that stem from them. The recommendations in that Technical Document, as well as examples provided in the Conceptual Framework and tools highlighted in supplementary frameworks produced by the Organization for Economic Co-operation and Development and the Taskforce on Nature-related Financial Disclosures, provide relevant data sources, methods and tools that may help central banks and supervisors move from a conceptual understanding to a data driven assessment of nature-related financial risk. The NGFS notes that these documents will not have all the relevant answers and tools but by taking first steps, central banks and supervisors can provide important methodological contributions to help refine those data and methods over time. In the meantime, the Conceptual Framework may be used to facilitate a dialogue with the financial sector about the identification, assessment, management and disclosure of nature-related financial risks.