Africa’s economy and the livelihoods of its people are intertwined with the vitality of its natural ecosystems—some of the most biodiverse in the world. The continent is also reliant on sectors that depend heavily on natural ecosystem services, such as agriculture and tourism. These sectors are critical to economic development as they provide employment and livelihoods for a large share of the population.

Yet, the health of these ecosystems is declining rapidly. For example, 3 percent of Africa’s GDP is lost annually due to soil and nutrient depletion of croplands.¹ Deforestation, pollution, and water abstraction all affect the ability of these ecosystems to support the economy in the future.

Halting and reversing nature loss will require coordinated, ambitious, and immediate action across the public and private sectors, as well as civil society. The financial sector can work in partnership with businesses across the real economy to benefit from the opportunities created by a nature-positive transition and to minimize its risks. Deploying sustainable finance instruments could support businesses in shifting to practices that reduce damage to nature, restore nature, and incorporate nature into their commercial strategies. The financial sector could also use capacity building, lending conditions, and engagement to support businesses in robustly managing nature-related risks.

This report aims to provide a fact base for how nature-related risks are relevant and material to financial regulators and private financial institutions. It covers both microeconomic and macroeconomic considerations and explores how an enabling environment could accelerate action from the private financial sector to manage nature-related risks and opportunities.