Research on Risk Management Reported by Researchers at Columbia University (Nature Finance: Bridging Natural and Financial Capital Through Robust Impact Measurement): Insurance – Risk Management

Insurance Daily News

2025 DEC 09 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Current study results on risk management have been published. According to news reporting originating from New York City, New York, by NewsRx correspondents, research stated, “Global biodiversity decreased by 69% from 1970 to 2022, representing a key risk to economic activity. However, the link between nature, biodiversity and finance has received little attention within the field of sustainable finance.”

The news editors obtained a quote from the research from Columbia University: “This paper attempts to fill this gap. Nature finance aims to avoid biodiversity loss and promote nature-positive activities, such as the conservation and protection of biodiversity through market-based solutions with the proper measurement of impact. Measuring biodiversity impact remains a challenge for most companies and banks, with a fragmented landscape of nature frameworks. We conduct a bibliometric analysis of the literature on biodiversity finance and analyze a unique market dataset of five global investment funds as well as all corporate bonds issued in Brazil, the country with the largest biodiversity assets. First, we find that the literature on nature finance is recent with a tipping point in 2020, with the three most common concepts being ecosystem services, nature-based solutions and circular economy. Second, we find that sovereigns and two corporate sectors (food production, pulp & paper) represent the vast majority of issuers that currently incorporate biodiversity considerations into funding structures, suggesting an opportunity to expand accountability for biodiversity impacts across a greater number of sectors. Third, we find a disconnect between science and finance. Out of a catalogue of 158 biodiversity metrics proposed by the IFC, just 33 have been used in bond issuances and 32 by fund managers, suggesting an opportunity for technical assistance for companies and to simplify catalogs to create a common language. Lack of consensus around metrics, complexity, and cost explain this gap. Fourth, we identify a distinction between liquid markets and illiquid markets in their application of biodiversity impact management and measurement.”

According to the news editors, the research concluded: “Illiquid markets, such as private equity, bilateral lending, voluntary carbon markets or investment funds can develop complex bespoke mechanisms to measure nature, leveraging detailed catalogues of metrics. Liquid markets, including bonds, exhibit a preference for simpler metrics such as preserved areas or forest cover.”

For more information on this research see: Nature Finance: Bridging Natural and Financial Capital Through Robust Impact Measurement. Risks, 2025,13(11):213. (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks13110213.

Our news journalists report that additional information may be obtained by contacting Friedrich Sayn-Wittgenstein, School of International and Public Affairs, Columbia University, New York, NY 10027, United States. Additional authors for this research include Frederic de Mariz, Christina Leijonhufvud.