About the Nature-Finance Alignment Tool

NatureFinance has built a quantitative tool that allows private and public financial institutions, and governments to assess the alignment of their underlying financial flows with nature.

The Tool is capable of assessing all financial flows from corporate investments to public expenditures and provides a score based on country and sector exposure. 
Leveraging both existing frameworks such as SBTN and GGGI as well as NatureFinance’s own proprietary scoring system, the Tool provides a score from 0-10 on the alignment of financial data with net zero and nature positive goals. 
The ability to differentiate between nature negative and nature positive financial allows for the realignment of financial flows whilst maintaining investments into specific sectors and countries and avoiding the risk of capital flight from biodiverse rich countries and sectors traditionally considered nature negative. 

The Methodology

  • Financial data is categorised by Country, Sector, Type of Flow and Amount.
  • These are then fed into the Tool and scored simultaneously through a country framework and sector framework.
  • Country alignment is assessed in our initial prototype analysis on a normative framework which includes policy, species intactness, efficiency of resource use, social outcomes and ecological deficit.
  • Sector alignment is based on activities not just at the operations level but also upstream and downstream.
  • Users are able to analyse aggregate scores for entire portfolios as well as do a deep dive into specific countries or sectors they are exposed to. The result is an Index score on the alignment of the financial data with nature positive outcomes.

Our alignment score allows users to compare their portfolios against each alternatives and industry standards. It also allows users to identify where they have exposure to activities that are not aligned with nature positive outcomes and to take action to reduce that exposure. In addition, the score can be used to inform decision making on where to invest in order to achieve nature positive outcomes. 

By understanding the alignment of their financial data with nature positive outcomes, users are able to take steps to ensure their investments are contributing to a net zero and nature positive transition. 

 

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