Biodiversity and extinction accounting in the financial sector. Evidence from an Italian bank

A sixth period of mass extinction, i.e. Anthropocene Extinction, with extinction of flora and fauna is currently affecting the world. This event is caused by multiple factors due to industrial activity, growing human populations, global warming, climate change, habitat loss, air and land pollution. Industrial and business activities are affecting natural capital and species extinctions either directly or indirectly.Biodiversity loss and ecosystems crisis are material issues for private sector. This research aims to find out from industry experts details about the biodiversity loss and species extinction crisis, better understand risk management practices and accounting frameworks for natural capital preservation by collecting suitable data on sustainable business and finance and investment products to address this key issues. The finance sector and mostly the banking industry has to define and improve its contribution to preserve our planet and ecosystems. In spite of an increasing development of guidelines and reports to support banks in implementing and reporting actions for climate change, reporting of biodiversity issues has not been defined in appropriate way. Investment funds and ESG ratings are including biodiversity issues, in their methodologies. In addition, the topic of biodiversity finance is becoming well-known in the finance context. As climate change has been recognized as the most important driver of the biodiversity loss, the association between these two issues leads to an enhancement of the biodiversity issues. In this perspective, few banks are committing to improve their practices for instance by developing environmental policies to obtain specific environmental certifications (i.e. EMAS). In the Italian context, we selected one of the most important bank, i.e. FinecoBank, as an example of best practices in managing environmental actions and policies. FinecoBank puts forth a very broad concept of sustainability by linking ESG issues to one of the most important key value, namely the respect of customers. As a network bank, the Fineco Group plays an active and proactive role in disclosing its commitment to environmental issues and in raising awareness into its network of financial advisors. Despite of the poor impact on biodiversity loss, Fineco Bank acknowledges the relevance of these topics for the financial industry and it strongly supports several initiative to preserve directly and indireclty biodiversity crisis, in Italy.