NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

The report by Vivid Economics by McKinsey and the financial sector development agency FSD Africa underscores the importance for financial institutions to unlock the potential benefits of investing in nature-positive businesses.

Analysing three private banks and the financial systems of six African countries, the report shows that for the most exposed lending portfolios, for example, in Zambia and Ghana, nature-related risks in agriculture and extractives could almost double expected losses by 2030, wiping millions of dollars off the value of their loan books. These nature-related risks are comparable with climate-related risks seen in similar sectors.

Researchers also found that action to protect and grow nature and changes in consumer demand could likely create high-growth opportunities in agricultural commodities such as alternative proteins. The report estimates that demand for crops relevant to alternative proteins cultivated in Africa, such as sugar cane and pulses, could be 15 to 36 percent higher by 2030.

Photo courtesy of Eberhard.