Nature-Related Financial Risks in Brazil
Biodiversity loss and associated economic costs are increasingly recognized as a source of financial risks. This paper explores how and to what extent Brazilian banks are exposed to the loss of biodiversity through their lending to non-financial co...
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/en/105041629893776228/Nature-Related-Financial-Risks-in-Brazil http://hdl.handle.net/10986/36201 |
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okr-10986-362012022-01-28T05:10:34Z Nature-Related Financial Risks in Brazil Calice, Pietro Diaz Kalan, Federico Miguel, Faruk BIODIVERSITY FINANCE FINANCIAL RISK NATURAL DISASTER ECOSYSTEM SERVICES CORPORATE BORROWING Biodiversity loss and associated economic costs are increasingly recognized as a source of financial risks. This paper explores how and to what extent Brazilian banks are exposed to the loss of biodiversity through their lending to non-financial corporates. The results suggest that such exposures are material. Forty-six percent of Brazilian banks’ non-financial corporate loan portfolio is concentrated in sectors highly or very highly dependent on one or more ecosystem services. Output losses associated with the collapse in ecosystem services could translate into a cumulative long-term increase in corporate nonperforming loans of 9 percentage points. Moreover, 15 percent of Brazilian banks’ corporate loan portfolio is to firms potentially operating in protected areas, which could increase to 25 percent should conservation gaps close, and 38 percent should all priority areas become protected. Finally, 7 percent of corporate loans are to firms for which environmental controversies have been recorded. While preliminary, the results have important policy implications for both Brazilian banks and Banco Central do Brasil. 2021-08-26T18:55:28Z 2021-08-26T18:55:28Z 2021-08 Working Paper http://documents.worldbank.org/curated/en/105041629893776228/Nature-Related-Financial-Risks-in-Brazil http://hdl.handle.net/10986/36201 English Policy Research Working Paper;No. 9759 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Brazil |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
BIODIVERSITY FINANCE FINANCIAL RISK NATURAL DISASTER ECOSYSTEM SERVICES CORPORATE BORROWING |
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BIODIVERSITY FINANCE FINANCIAL RISK NATURAL DISASTER ECOSYSTEM SERVICES CORPORATE BORROWING Calice, Pietro Diaz Kalan, Federico Miguel, Faruk Nature-Related Financial Risks in Brazil |
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Latin America & Caribbean Brazil |
| relation |
Policy Research Working Paper;No. 9759 |
| description |
Biodiversity loss and associated
economic costs are increasingly recognized as a source of
financial risks. This paper explores how and to what extent
Brazilian banks are exposed to the loss of biodiversity
through their lending to non-financial corporates. The
results suggest that such exposures are material. Forty-six
percent of Brazilian banks’ non-financial corporate loan
portfolio is concentrated in sectors highly or very highly
dependent on one or more ecosystem services. Output losses
associated with the collapse in ecosystem services could
translate into a cumulative long-term increase in corporate
nonperforming loans of 9 percentage points. Moreover, 15
percent of Brazilian banks’ corporate loan portfolio is to
firms potentially operating in protected areas, which could
increase to 25 percent should conservation gaps close, and
38 percent should all priority areas become protected.
Finally, 7 percent of corporate loans are to firms for which
environmental controversies have been recorded. While
preliminary, the results have important policy implications
for both Brazilian banks and Banco Central do Brasil. |
| format |
Working Paper |
| author |
Calice, Pietro Diaz Kalan, Federico Miguel, Faruk |
| author_facet |
Calice, Pietro Diaz Kalan, Federico Miguel, Faruk |
| author_sort |
Calice, Pietro |
| title |
Nature-Related Financial Risks in Brazil |
| title_short |
Nature-Related Financial Risks in Brazil |
| title_full |
Nature-Related Financial Risks in Brazil |
| title_fullStr |
Nature-Related Financial Risks in Brazil |
| title_full_unstemmed |
Nature-Related Financial Risks in Brazil |
| title_sort |
nature-related financial risks in brazil |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/en/105041629893776228/Nature-Related-Financial-Risks-in-Brazil http://hdl.handle.net/10986/36201 |
| _version_ |
1764484773513789440 |