Ahead of the International Women´s Day next week, we looked at the gender pay gap in our feature story in our weekly. Furthermore, we analyzed the effects of the Windsor Framework, the development of US monetary aggregates and the semiconductor market. In our second publication earlier this week, we took a closer look at the topic biodiversity loss. Financial institutions may face financial, market, reputational and legal risks when they invest in economic activities that cause adverse effects on biodiversity or are highly dependent on natural capital. As a first step, our study focuses on the risk aspect by analyzing the economic losses caused by a degradation in so-called ‘ecosystem services’. With a deep-dive into pollination loss as an example of an ecosystem service we quantify the associated sectoral changes in value added.
- In the EU, women get paid 13% less than men in terms of average gross hourly earnings. Although this is smaller than the global gender pay gap (20% according to the ILO), it does not necessarily reflect more gender equality; for some countries, it merely depicts lower participation rates in paid employment.
- Increasing female labor participation rates in developed economies makes economic sense. We estimate that life expectancy, tertiary education attainment and government expenditure in policies that support families and children have the strongest effect on female labor supply. However, the effects of labor costs (wages) and the unadjusted pay gap are more muted.
- According to our calculations, if invested, the income gap between men and women could represent almost 11 times the annual female retirement income in France, 10 times the annual retirement income for women in Italy, 6 times that of women in Germany, and 3 times the annual female retirement income in Spain.
- Windsor Framework to the economic rescue – The lifted uncertainty could be sparing the UK economy 2.5% of business investment and a third of a GDP point in 2023-24.
- US monetary aggregates – The Swan song? Since March 2022, US money supply has contracted; the last time this happened was during the Great Depression.
- Semiconductors – The end of the great chip shortage? The good and the bad of the 2023 semiconductor recession
You’ll find the complete ‘hot’ topic report including the feature story here.
- Biodiversity matters for the finance sector. Financial institutions may face financial, market, reputational and legal risks when they invest in economic activities that cause adverse effects on biodiversity or are highly dependent on natural capital. Protecting biodiversity, on the other hand, provides huge opportunities for investments: The financing gap to restore biodiversity until 2030 is estimated at USD711bn per year. As a first step, this study focuses on the risk aspect.
- Measuring biodiversity loss is challenging, to put it mildly. There is a plethora of different methods and indicators, but no consensus. The highly local nature of biodiversity adds another layer of complication. In contrast to climate change, where local emissions have global consequences, impacts on biodiversity stay mainly local, leading to a very heterogenous map of biodiversity losses and resulting risks.
- The assessments of biodiversity loss in finance are so far limited to qualitative and exposure-based metrics. This report provides a quantitative approach that measures actual impact, focusing on the risk of reduced pollination. As a result, rather than simply categorizing economic activity into low, medium or high risk, we can concretely establish, for example, that a -20% loss in pollination activity would cut US agricultural production by -1.3%.
- A complete elimination of pollination would cut agricultural output by between -2.0% in the UK to -7.9% in Belgium. We estimate this would reduce annual gross domestic product by between -0.04% (the UK) to -0.4%(Portugal). In absolute terms, this would be equivalent to between USD1bn (Portugal) and USD28bn (US) annually.
- On the other hand, the industrial and services sector could indirectly benefit. Reduced pollination can increase the production of sectors that benefit from the land, capital and labor released by the contracting agricultural sector, notably the industrial and services sector. In France and Italy, for instance, the positive impact could exceed USD4bn per year.
- These monetary results go a long way in helping the financial sector to quantify possible portfolio impacts of biodiversity loss. Furthermore, they set the frame for a cost-benefit analysis of abatement measures and their financing mechanism. Such detailed analysis forms the foundation for the battle for a nature-positive economy as it can stir the financial sector into action. In that respect, the present report is just the first step of a long journey.
The complete report for you here.
Experte relations presse, communication et réputation
1yPowerful illustration too!