More than just supporting individuals and businesses in the current pandemic, banks and other financial institutions have an effective role to play in preventing the next one, according to the World Wide Fund for Nature.
Changes and destruction of the natural habitat over land use account for at least half of emerging zoonotic diseases – defined as those transmittable from animals to humans. In contrast, forests can act as an «anti-virus» as rich biodiversity can resist the spread of diseases, according to a previous WWF Italy report.
Interestingly, Southeast Asia’s biodiversity ranks high but ongoing deforestation could make the region vulnerable to another outbreak. Despite this, a 2019 WWF report on sustainable banking found that only 9 percent of lenders in the region had «no-deforestation» policies – Singapore’s «big three» banks DBS, OCBC and UOB.
«It could be even more important for other regional banks to follow this example and introduce no-deforestation policies in light of the COVID-19 pandemic,» said Helena Wright, WWF’s vice president of sustainable infrastructure and energy finance, in a blog post. «Moreover, it will be important for COVID-19 recovery processes to not lead to a watering down of policies that prevent deforestation.»
Sustainable Infrastructure
Alongside the de-funding of projects harmful to biodiversity such as deforestation, Wright suggested increased funding into sustainable infrastructure investments as a means to increase resilience in the next crisis.
«Sustainable infrastructure investments such as energy efficiency, clean energy and sustainable transport investments lower air pollution, which is a risk factor for death during the coronavirus pandemic,» Wright said.
While measures such as remote working have proven effective in maintaining business continuity, issues such as building energy efficiency need to be considered to lower carbon footprint. Wright also highlighted other potential developments to consider such as green spaces for improving air pollution or a shift towards a circular economy to improve resilience against future supply shocks.
Win-Win
Aside from the health and environmental benefits, Wright notes that there are a plethora of economic and financial benefits to be had from sustainable financing such as job creation or protection of low-income communities.
«Investments in sustainable infrastructure are not only sensible to avoid pandemics, they are also more resilient from the perspective of financial stability,» Wright said.
«Governments and development banks can explore these win-wins to maximize the benefits of economic stimulus packages. A ‘green’ and resilient recovery can help to address the causes of the pandemic and make our lives better and healthier.»
«Dangerous Tipping Point»
The issue of maintaining biodiversity is not limited to health crises but also the urgent issue of climate change. Nature-based solutions are expected to deliver at least one-third of cost-effective carbon dioxide reductions required through 2030, according to WWF research.
«We now urgently need bold policies to protect nature in 2020. An ambitious global deal to tackle the extinction crisis will help address one of the root causes of the health risks we face today,» Wright added.
«As we edge towards dangerous tipping points in the climate system, we do not have time to waste.»
