This will require them to invest more into nature, to offset the impact on biodiversity loss or land clearance from activities within their lending portfolios.to determine the boundaries of properties they are funding, and to see the impact of land clearing or water use on their customers’ land – a movement known as “spatial finance”. This is expected to drive demand for geospatial data and analytics, as banks seek to reduce the risk of greenwashing.
“Already, leading banks are working to understand how well different agricultural clients are managing nature and biodiversity – from soil to water to broader biodiversity – and as part of this, better understanding of the location of clients will be a critical element of understanding those risks.”The Australian Conservation Foundation said banks had not adequately geolocated their loan books, which will be a needed under the TNFD’s “LEAP” framework, where the L stands for location.
“We are observing investors rapidly lifting their expectations of top ASX companies across the board on sustainability issues, and what is clear is that nature is the next big issue that investors will want better disclosures on from banks, insurers and other large ASX listed companies,” Mr O’Connor said.