EU banks and nature-related risk management: from awareness to action

Nature degradation is increasingly recognised as a source of prudential and macrofinancial risk. This has prompted regulators and banks in the European Union to move beyond climate-only approaches to assess broader environmental exposures. An analysis of 15 EU banks’ public disclosure documents reveals a developing approach to nature-risk mitigation but a gap between ambition and implementation. Banks, financial supervisors and regulators should build on emerging good practices even in the face of regulatory rollbacks. They should treat nature-related risks as material prudential concerns, strengthen monitoring and assessment frameworks, and address environmental risks in their entirety rather than through a climate lens alone.