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ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) “the world’s first comprehensive tool” linking environmental change with its consequences for the economy.

ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) is a web-based tool that will help global banks, investors and insurance firms assess the risks that environmental degradation poses for financial institutions.

The Natural Capital Finance Alliance (NCFA) launched “the world’s first comprehensive tool” linking environmental change with its consequences for the economy. ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) is a web-based tool that will help global banks, investors and insurance firms assess the risks that environmental degradation, such as the pollution of oceans or destruction of forests, poses for financial institutions.

ENCORE was launched at the UN Environment Programme Finance Initiative (UNEP FI) Global Roundtable on 26 November 2018, in Paris, France. The tool is managed by the NCFA, which is a partnership between UNEP FI and Global Canopy, in collaboration with UNEP World Conservation Monitoring Centre (UNEP-WCMC).

ENCORE’s database covers 167 economic sectors and 21 ecosystem services. The tool enables users to visualize how the economy depends on nature and how environmental change creates risks for businesses. These natural capital risks can then be explored further to understand location-specific risks through maps of natural capital assets and drivers of environmental change.

As an illustration, an assessment of the FTSE 100, one of the world’s most high-profile indices, using information in ENCORE, found that in 13 of the 18 sectors that make up the index, totaling US$1.6 trillion in net market capitalization, are associated with production processes that have high or very high material dependence on nature. Examples include the harvesting of cereals and its reliance on pollination, or metal processing and its reliance on ground water provision.

The tool identified three sectors that are most materially dependent on nature to be agriculture, aquaculture and fisheries, and forest products. Sectors such as utilities, oil and gas, and mining were also found to have a very high dependence on ecosystem services.

The three most important ecosystem services for the global economy were identified as water provision, climate regulation, and flood protection. Explore Natural Capital Risks - Select from a Sector, Sub-Industry or Production Process below (based on the Global Industry Classification Standard) to explore natural capital risks.