Nature-related Financial Risks: a Conceptual Framework to guide Action by Central Banks and Supervisors

This technical document and conceptual framework from the Network for Greening the Financial System (NGFS) was created to help central banks and supervisors establish a common understanding of nature-related financial risks so as to advance collective efforts to navigate their complexities and challenges. It provides a brief overview of nature-related financial risks and introduces a principle-based risk assessment framework consisting of three phases: identifying sources of physical and transition, assessing economic risks, and assessing risks to, from, and within the financial system. It also provides a pair of illustrative cases to support the use of the framework.

Although created with central banks and their supervisors in mind, this guidance will also benefit corporate investors and financial institutions.