As awareness of biodiversity loss grows, financial institutions are under increasing pressure to consider the environmental impact of their activities. For Danske Bank, Denmark’s leading bank, the challenge was to understand the nature-related financial risks and impacts on biodiversity within its lending and investment portfolios.

As one of the first of its kind in the Danish financial sector, Danske Bank has conducted a comprehensive analysis to map the potential biodiversity impact of their lending and investment portfolios. The analysis focused on how companies impact biodiversity, examining factors like energy use, land consumption, and resource management. This mapping exercise allows Danske Bank to assess the nature-related risks and dependencies within their lending and investment portfolio. By integrating these insights into their strategy, they can engage more effectively with companies and stakeholders on crucial biodiversity issues and emphasises the importance of sustainable practices, such as increasing recycling and reducing resource consumption.

The analysis identified three sectors in the lending portfolio with the highest potential negative impact on nature and biodiversity which are 1) agriculture including food products and fisheries, 2) forestry, pulp and paper and 3) shipping. For investments, around two-thirds of the investments have a high potential impact on ecosystems and biodiversity, mainly due to CO2 emissions, pollution, and resource overexploitation. Additionally, one-third of the investments depend on natural resources like water, plants, and animals, as well as ecosystem services such as protection against storms and floods.

Insights from the analysis will guide Danske Bank’s engagements with customers and investee companies, supporting activities that benefit nature and helping manage nature-related impacts and dependencies.