From Nature Loss to Economic Risk: Finance Ministries and Central Banks Advance Joint Action 

At a joint workshop hosted during London Climate Action Week, the Network for Greening the Financial System (NGFS) and the Coalition of Finance Ministers for Climate Action (CFMCA) brought together finance ministries, central banks, supervisors, and international partners to examine how nature loss is increasingly affecting economic growth, fiscal sustainability, and financial stability. Participants underscored that biodiversity loss, water scarcity, and ecosystem degradation are no longer solely environmental concerns but material macroeconomic and fiscal risks. 

Speakers highlighted growing evidence that economies and financial systems are highly dependent on healthy ecosystems. The European Central Bank presented research showing that millions of companies across the euro area depend on ecosystem services, while water scarcity alone could place a significant share of economic output and bank lending at risk. Water emerged as a recurring priority throughout the discussions, given its links to economic productivity, energy production, agriculture, and financial stability. 

A central theme of the workshop was how to move from analysis to implementation. Participants explored the need for better data, metrics, and nature-related risk assessments, while also emphasizing stronger collaboration between finance ministries and central banks. Discussions highlighted the importance of integrating nature considerations into fiscal planning, financial supervision, investment decisions, and public policy frameworks.  

The event also showcased emerging country experiences and analytical tools, including nature stress testing, biodiversity risk assessments, and natural capital accounting. While significant progress has been made in understanding nature-related risks, participants agreed that the next challenge is translating this knowledge into policies and investments that strengthen resilience and support sustainable economic development.  

Event: NGFS-CFMCA Platform event on Scaling Credible Transition Finance  

Investors expect credible transition plans and sustainable business models; businesses need clear regulatory signals and sectoral transition pathways.  

Jurisdictions are developing different models, which reflect national priorities; collaboration should aim to minimise unnecessary regulatory frictions that could hinder cross-border investment.