Identifying Nature-Related Risks in Financial Portfolios

This case study presents the Biodiversity Risk Metrics developed by MSCI and WWF to identify nature-related risks in financial portfolios. The document outlines the integration of the World Wide Fund for Nature Biodiversity Risk Filter (WWF BRF) indicators with MSCI GeoSpatial Asset Intelligence, aimed at providing a detailed dataset of physical assets and their attributes. It explains how the WWF BRF tool assists corporate actors and financial institutions in recognizing both physical and reputational risks associated with their operations. The study details a step-wise approach to analyze nature-related risks, starting from portfolio screening to identifying individual companies for engagement. It highlights the significance of geospatial analysis in evaluating risk exposure at specific locations, contrasting it with traditional methods that rely on broader averages. The findings underscore the importance of accurate risk assessment and the potential misestimations that can arise from using less granular data, ultimately guiding investors in their decision-making processes.