What is NatureAlign?
NatureAlign is a suite of analytical modules developed by NatureFinance to support
stakeholders within the financial system in aligning their financial flows with nature positive
outcomes.
Launching on 6th November, the first module of NatureAlign, will be a free web app for
private financial institutions. The app will be released as a beta version as it is still being
developed and improved, with further steps and features on the way. It uses existing
biophysical, spatial and financial datasets to provide financial institutions with a baseline
analysis of their investments and loans with respect to nature. Its main aim is to arm
institutions that fuel economies with the knowledge and tools to account for their reliance
and impacts on nature.
This is because financial institutions are key to the nature transition. With nearly $7 trillion, or
about 7% of global GDP, invested each year in activities that harm nature, there is an urgent need for financial institutions to shift finance towards activities and sectors that protect, manage and restore the natural world.
Demands on financial institutions to demonstrate the alignment of financial flows with net
zero and nature-positive outcomes are growing, driven by the need to meet climate and
nature goals. For nature, this is highlighted by regulations such as the EU Corporate
Sustainability Reporting Directive (CSRD), global frameworks such as the Biodiversity Plan (the
Kunming-Montreal Global Biodiversity Framework), and recommendations from the
Taskforce on Nature-related Financial Disclosures (TNFD).
Who should use NatureAlign?
The first module of NatureAlign is designed for private financial institutions including asset
managers, asset owners and commercial banks. NatureAlign helps you kick-start your nature
alignment journey by understanding your current position with respect to nature – from
interfaces with nature and sensitive locations to exposure to nature-related dependencies
and impacts. This is an essential step to take further action to channel financial flows away
from activities that harm nature and towards activities that deliver nature positive
outcomes. The app will be particularly helpful for professionals with the sustainability, risk
management and investment management functions in these institutions. With time, we
hope to also make the app and future modules of NatureAlign available to governments and
development finance institutions.
How will NatureAlign work?
The app will combine data you provide on your investments or loans with spatial datasets
and sector-level information. It produces baseline analysis, statistics and visualisations
which can help you:
- Build a portfolio-level overview of key interfaces with nature, including exposure to sensitive locations. This is based on analysis of the state of biodiversity, the extent of water risk, the presence of critical natural assets and the extent of ecosystem protection in countries where your investments or loans are located.
- Estimate metrics that are recommended by the TNFD for financial institutions.
- Identify locations and sectors you invest in or lend to that are worth assessing in future modules of NatureAlign, which could include providing structured recommendations in the context of setting targets and allowing you to consider the impact of changing your investments or loans on nature.
The analytics are intended to ultimately support you with reporting, risk assessments and
strategic planning, including transition planning and investment planning. The app is
especially helpful at the start of your nature journey, with links to the CSRD’s requirements
and the TNFD’s framework.