ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) is a comprehensive tool developed by UNEP FI that helps financial institutions understand and assess nature-related risks and opportunities.
This tool enables users to explore how different economic sectors depend on and impact biodiversity and ecosystem services, making it essential for financial risk assessment and sustainable investment decisions.
Key Features
- Sector Analysis: Examine how 167 economic sub-sectors depend on and impact nature
- Biodiversity Module: Assess biodiversity-related risks and opportunities in financial portfolios
- Ecosystem Services Mapping: Understand dependencies on 21 ecosystem services
- Environmental Impact Assessment: Evaluate impacts on air, water, soil, and biodiversity
- Interactive Interface: User-friendly platform for exploring complex environmental data
- Geographic Analysis: Location-specific environmental risk assessment
Applications
- Financial Risk Assessment: Identify nature-related financial risks in investment portfolios
- Due Diligence: Screen investments for environmental dependencies and impacts
- Portfolio Alignment: Align financial activities with biodiversity conservation goals
- Regulatory Compliance: Support environmental reporting and disclosure requirements
- Investment Strategy: Inform sustainable investment decisions and ESG integration
- Client Engagement: Help financial institutions engage clients on environmental risks
How It Works
- Select Economic Sectors: Choose from 167 sub-sectors to analyze
- Explore Dependencies: Understand how sectors depend on ecosystem services like water regulation, pollination, or climate regulation
- Assess Impacts: Review potential negative impacts on biodiversity, water, soil, and air quality
- Geographic Context: Consider location-specific environmental conditions and risks
- Portfolio Analysis: Apply insights to financial portfolios and investment decisions
Use Cases
- Commercial Banks: Assess environmental risks in lending portfolios
- Asset Managers: Screen investments for nature-related dependencies
- Insurance Companies: Evaluate environmental risks for underwriting decisions
- Development Finance: Support sustainable development project assessment
- Corporate Finance: Help companies understand their environmental footprint
- Policy Development: Inform financial regulations related to environmental risks
ENCORE provides financial institutions with the tools they need to integrate nature considerations into their risk management and investment processes, supporting the transition to a more sustainable financial system.
