part in a voting session on EU nature restoration law during a plenary session at the European Parliament in Strasbourg, eastern France, on July 12, 2023. Campaigners exploded with joy when EU ministers finally agreed to pass the controversial ‘Nature Restoration Law’ this month.
Healthy soils and trees absorb carbon, while those in poor health release it, which contributes to global warming. Restoring damaged rivers, lakes, wetlands, forests, grasslands, marine habitats and other ecosystems will improve the overall resilience and quality of nature in Europe, but is also critical for long-term food security and climate change mitigation.
Its supporters hope this momentum will continue. While it took the TCFD around five years to become mandatory, the assumption is that companies will have to comply with TNFD rather more quickly. Indeed, 320 organisations pledged to be early TNFD adopters at the World Economic Forum’s annual According to the December 2023 UN State of Finance for Nature report, global finance flows to nature-based solutions of around $200 billion are massively outweighed by finance flows with direct negative impacts on nature of almost $7 trillion.
On the risk side, it is important for them to have a better understanding of nature-related financial risks and a better system in place to measure them. On the opportunity side, given the emphasis on nature restoration, there will be many chances for private financing. Further, restored ecosystems represent a big risk mitigation asset as deteriorated nature is more vulnerable to climate disaster, leading to more damage and higher costs to repair.